Some Thoughts (Just) Ahead of Prime Day 2017

Prime Day mark III kicks off at 9 p.m. EDT today, running for 30 hours (Prime Day plus?), with the sales wave rolling through 13 countries instead of 10 as in 2016. Amazon, of course, has been priming the pump with advance deals (especially via its voice-directed Alexa) and tons of earned media (here’s some more!).

As the engine revs up, a few interesting wrinkles to bear in mind:

Yeah, I’m the taxman: this is the first Prime Day in which sales tax will be collected on products sold in 45 of the 50 states; the only exemptions being New Hampshire, Delaware, Montana, Oregon and Alaska, which don’t charge a sales tax. Late last year, Amazon threw in the towel on its protracted tax battle and began collecting sales tax in states where it didn’t have a nexus, i.e. a physical presence; as of April 1, the tally was 45 states plus the District of Columbia. Thus, nearly all state governments will be partial beneficiaries of the Prime Day bonanza.

Deep discounting is the counter-punch: several outlets are reporting that unlike in past years, retailers have been responding to Prime Day’s tsunami of deals by offering deep discounts ahead of the event to try to steal some thunder. According to data from retail analytics firm EDITED as reported in 24/7 Wall Street, average discounts at chains such as Lord & Taylor, Neiman Marcus, ASOS, Bluefly and Bon-Ton have been nearly 40%. Also the number of products first discounted over the Fourth of July holiday weekend grew by 32% vs. 2016. Prices on 51% of these items were cut by 50% or more.

Who’s in and who’s out: as retailers and brands weigh the pros and cons of making Amazon a frenemy or foe – such as Nike’s recent decision to start a pilot program of direct selling on Amazon.com – it’s interesting to note which players are taking part in Prime Day and which have chosen to sit on the sidelines. According to USA Today, Walmart, Target and Lowe’s are among the major retailers opting out of this year’s event, while companies like JCPenney, Kohl’s and Macy’s have created exclusive discounts both before and during Prime Day.

It’s a Fire sale – literally: As it did in 2016, Amazon will again be discounting its Fire devices, including the Fire Stick device for streaming content – a competitor with Google’s Chromecast, Roku and Apple TV – and the Fire Tablet. According to analysis from Seeking Alpha, Amazon nearly doubled its sale of Fire Tablets between Q2 and Q3 of 2016 – the latter being the quarter in which Prime Day was held – from 1.6 million units to 3.1 million units. The first Prime Day in 2015 helped Amazon clear out a huge backlog of Fire Tablets and reversed a poor sales trend, according to Seeking Alpha. Fire devices are also seen as a key element of the Amazon “flywheel” of growth, along with Prime memberships.

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