• Retail Dive

Amazon joins other retailers in pushing early holiday deals

Dive Brief:

  • Amazon on Monday launched "Black Friday-worthy deals," following close on Target's heels in pushing holiday discounts.

  • The e-commerce giant announced a tweak to its lists feature that allows customers to "share gift ideas for everyone in their household with relatives and friends, conveniently organized by recipient." Customers can also "send gifts with just an email or mobile phone number — no need to know the recipient's address," per the release.

  • The timing is similar to last year's Prime Day, which was delayed as the pandemic disrupted both supply and demand. This year, Amazon moved the sales event back to its more typical early summer timeframe.

Dive Insight:

Timing a holiday sale didn't used to be tricky. For decades, the post-Thanksgiving "Black Friday" was the day to head to the shops, fresh off a holiday meal with friends and family.

E-commerce, and Amazon in particular, has blurred the lines around that, though the general timing has mostly stuck. Several retailers hopped onto last year's delayed Prime Day timing, which had the effect of jump-starting and elongating Black Friday.

That early timing is back this year. Thanks mostly to vaccination, many consumers have been out and about since the spring, but retailers are contending with supply chain issues that not even Amazon can avoid. Port congestion, manufacturing and shipping disruptions, rising freight costs, labor shortages and rising labor costs have introduced uncertainties and expenses just as retailers prepare for the holiday selling season.

Amazon in its release on Monday noted that it will "invest more than $1 billion in higher pay for front-line teams" and that it recently announced 125,000 full- and part-time jobs in the U.S., with average starting hourly wage of more than $18.

Aspects of this late stage of the pandemic do also have their upsides, however.

"The tailwinds include pent-up demand for discretionary goods, the strength of consumer spending, full-price selling due to lean inventory levels leading to an increase in margins, enhanced profitability from the digital channel, and a rationalized expense base," Telsey Advisory Group analysts led by Dana Telsey said in emailed comments Monday. "Our view is that the tailwinds have a slight edge at the moment, but the supply chain and cost pressures may get worse before they get better, which could impact the latter part of the holiday season."

That has many retailers jump-starting the season in order to ensure that goods get into customers' hands by the Dec. 25 holiday deadline.

Retailers are likely to be grappling with these challenges after the holidays, Telsey warned. "Our bigger concern relates to [the first half of next year] when comparisons will be difficult, there won't be U.S. government stimulus like a year ago, and profit pressures are likely to persist," Telsey wrote.