Salesforce: Despite soft sales, Prime Day ‘halo effect’ holds up

In the U.S., online sales during the June 21-22 Amazon Prime Day shrank 1% from Prime Day 2020, according to Salesforce Shopping Index data.

However, Salesforce analysis indicates there was a still a positive “halo effect” on overall June 2021 online sales from Prime Day. Shopping Index data shows that online sales in the second quarter of 2021 started off soft, which Salesforce attributes to the large COVID-19-fueled surge in e-commerce during most of 2020. 

While June 2021 has seen a slight rebound from the early days of the second quarter, Salesforce says the month still has not performed much differently than April and May, exhibiting 8% growth in year-over-year sales so far. However, Prime Day outperformed the month’s average and pushed online sales growth to 12% over the same two days in 2020 – a halo effect of four percentage points.

While Prime Day 2021 inflated a softer month, Salesforce says it didn’t outperform Prime Day 2020, when consumers were largely stuck in their homes with few alternatives for spending their money. Currently, consumers are transitioning to other priorities with rising vaccination rates, falling COVID-19 infection rates and improving weather.

According to Salesforce, inflation, inventory issues, and logistics challenges contributed to average discount rates falling 13% from Prime Day 2020 (from an average discount rate of 18% to 15%). The average order value also increased by 7%, while the number of orders decreased by 8% over 2020. 

Meanwhile, the number of units purchased per order remained flat, which Salesforce says suggests that despite softer discounting, retailers are raising prices to compensate for the current market environment. Salesforce also advises that early indicators point to reduced buying power for consumers as retailers raise prices and temper discounting.

Interestingly, Salesforce’s findings contradict some Prime Day analysis provided by Adobe and Numerator. According to Adobe Digital Economy Index data, total U.S. online spend surpassed $11 billion during the 48 hours of Prime Day 2021, representing 6.1% growth compared to $10.4 billion in total Prime Day 2020 online revenue. And Numerator data indicates average order value dropped 18% from 2020, but a large number of multiple household orders helped push up sales totals.

The fastest-growing product segment for Prime Day shoppers was handbags and luggage, with spend growing 74% over Prime Day 2020. Furniture sites saw a 67% increase in total share of wallet during Prime Day 2021, leading to furniture spending capturing the largest share of spend across the 18 consumer product segments that Salesforce tracks.

Shopping Index data also shows that general and active apparel saw large decreases (-16%) from Prime Day 2021, although active footwear climbed 11% from 2020, despite active apparel seeing a big drop in spend. Luxury and mid-priced handbag and luggage segments also had increased sales from the previous Prime Day event.

Salesforce analyzed Prime Day performance using its proprietary Shopping Index data, a collection of retail insights from over 1 billion shoppers worldwide.