Why Prime Day is important to Amazon

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Amazon has successfully invented a new shopping holiday, and it’s set to capitalize on the rewards.

The fourth Prime Day (and a half) will begin noon PT (3 p.m. ET) Monday, extending for 36 hours. The savings event this year is running longer than prior years, available for shoppers in more countries, and Amazon is promising a million deals — the most yet — for Prime members.

It’s also the first Prime Day with Whole Foods, Amazon’s most expensive acquisition, integrated under the Jeff Bezos umbrella.Prime Day means far more to Amazon than a one-day annual marketing play. Sure, Amazon gets to flex its muscles over the retail industry and juice sales numbers.

But, more importantly, Amazon uses the savings event to spotlight its own products and hook new members on a subscription program that more than 100 million people around the world count as an indispensable part of their shopping lives.

Amazon doesn’t disclose revenue from previous Prime Days, but it’s predicted to reach $3.4 billion this year, according to retail think tank Coresight Research.

Sales for the event are projected to shatter last year’s total by 40% and become Amazon’s new single day record, breaking its 2017 Cyber Monday haul.

But Monday will be trivial to Amazon’s financial picture, noted Michael Pachter, an analyst at Wedbush Securities. Sales are projected to be only six times a normal day, or around 2% of Amazon’s annual retail revenue, he said. The company brought in a total of $177.9 billion in sales last year across its retail and web services division.

 

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