Instant Pots and Roombas are usually hot selling items during Amazon’s Prime Day event. But this year consumers were more interested in dishwasher pads, diapers and snacks.
A look at some of the most popular items during Amazon’s two-day discount campaign, which ended late Wednesday, offers a glimpse of how record-high inflation is changing consumer spending habits.
The consumer price index, a broad measure of the prices of goods and services, rose 9.1% in June, a 41-year high. Amid rising prices, consumers have tightened their wallets and cut discretionary spending.
Analysts had warned that inflation could dampen consumers’ willingness to buy a new TV or Echo smart speaker during Prime Day.
JP Morgan wrote in a note to clients on Monday that it forecast “slower growth in Prime Day incremental earnings given the challenging macroeconomic backdrop.” Analysts at the company are forecasting total Prime Day sales of $5.6 billion, up just 5% year over year, compared to 50% year-over-year growth in 2020 and 9% year-over-year growth in 2021.
So far, Prime Day results have been better than feared. The company announced Thursday that it sold 300 million items during Prime Day, up from 250 million last year, making it the “biggest ever” in Amazon history.
Total US online retail sales during Amazon’s Prime Day event surpassed $11.9 billion. That’s 8.5% more than the total e-commerce transactions generated during last year’s event, according to data from Adobe Analytics. Other retailers like Best Buy and Target tried to capitalize on the Prime Day frenzy by launching their own competing events.
While inflation didn’t appear to have hurt sales, it may have affected which products consumers bought. Shoppers chose consumer goods over indulgence, reaching for household products like Amazon Basics garbage bags and Cascade dishwasher capsules, said Melissa Burdick, president of Pacvue, which helps companies advertise on Amazon and other e-commerce platforms.
“Sales are still very strong, but the mix of shifts in the category is related to inflation, particularly in groceries,” Burdick said. “If they figured out how to give gas away, it would have been the best Prime Day ever.”
Rising grocery prices remain a major concern for many people across the country. According to a recent Harris poll in partnership with Alpha Foods, about 90% of Americans are concerned about food prices.
Frito-Lay snack packs were among the best sellers during Prime Day, according to Numerator, which tracked Prime Day spend. But Prime Day shoppers didn’t just stick to the essentials. Amazon-branded devices continued to top the list of hottest items during the event, Numerator found. Amazon tends to discount its Echo smart speakers and Fire TV sticks heavily on Prime Day.
Consumers also avoided large items for smaller purchases. About 58% of Prime Day items sold for under $20, according to Numerator, while just 5% sold for over $100. About 34% of shoppers surveyed said they were waiting for Prime Day to buy something at a discount, and 28% passed on a good deal because they didn’t think it was necessary, Numerator found.
Prime Day and the other discount events that ran alongside it are a good “litmus test” of consumer confidence amid fears of a looming recession, said Daniel Newman, principal analyst at Futurum Research.
“It sounds to me like most people still feel like their home balance sheets are good, that they’re still willing to do some stuff on a whim on a day like Prime Day buy,” Newman said.
Many consumers likely argued that it made more sense to buy “15 packs of Kind Bars and three new Echos” when they’re offered at a discount rather than wait, he added.
“Will I spend the $300 today or $500 tomorrow?” said Newman. “I think a lot of people rationalize that way. If we’re going to buy this stuff in the next few months anyway, I might as well do it now.”
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