Amazon is reportedly postponing its summer blowout sales event, Prime Day, until at least August due to the ongoing coronavirus crisis.
According to internal Amazon executive meeting notes obtained by Reuters, pushing back Prime Day by about two months could result in a $100 million loss from the roughly 5 million devices it may now be forced to sell at a discount. The worst case scenario would be $300 million hit, according to Amazon’s general counsel, David Zapolsky.
Prime Day, billed as Amazon’s premier sales and marketing event, started in 2015 as a one-day mega promotion for reduced-price products that also rakes in Amazon Prime membership subscriptions. Salesforce found that digital commerce revenue outside Amazon grew 60% on Prime Day 2018 compared to Prime Day 2017.
In July 2019, Amazon’s fifth Prime Day was a 48-hour shopping extravaganza, its longest Prime Day yet (and the first to also host a popstar-studded concert livestream).
By the end of the first 24 hours, Adobe Analytics told Adweek, Prime Day 2019 had already established itself as the third occasion outside of the holiday season to reach $2 billion in online sales, following Labor Day 2018 and Memorial Day 2019. Per Amazon, 175 million items were sold over those two days.
Nevertheless, the COVID-19 outbreak, which has disrupted daily life throughout the world and redefined our definition of normal, has negatively affected nearly every business and market.
Between protests and strikes, employees testing positive for the virus and an incapacitated supply chain that many people rely on for the delivery of essential items, Amazon has been no exception when it comes to the challenges posed by the pandemic.
On March 22, Amazon CEO Jeff Bezos wrote in a blog post that “stocking and delivering essential items like household staples, sanitizers, baby formula and medical supplies” are Amazon’s priority. In order to fulfill those promises, Bezos added, the company would be making changes to logistics, transportation, supply chain, purchasing and third-party seller processes (such as hiring 100,000 temporary workers to keep up with supply chain strain and ordering face masks for contractors who cannot work from home).
Not only would it have been difficult for Amazon to hold Prime Day under the current circumstances, but a major ecommerce event in the midst of a pandemic that has caused physical and financial suffering for millions of Americans could have resulted in criticism and, potentially, a loss of brand trust.
Amazon declined to comment on its decision.