Amazon on Monday morning confirmed that its annual Prime Day shopping bacchanal will take place on Oct. 13 and 14 in what will be a major test of its ability to handle the surge in spending ahead of a holiday shopping season that will start earlier than ever.
For the second straight year, Amazon’s Prime Day sales event will last two days. But this year, Amazon is taking on brick-and-mortar rivals that are more formidable than last year’s—notably Walmart, Target, and Best Buy—which have deftly made use of their networks of stores and strong websites to win shoppers over. Target, for instance, saw its online sales nearly quadruple last quarter and also announced on Monday that it, too, is holding a two-day event on Oct. 13 and 14.
Yet for all their prowess, those retailers remain far behind Amazon; the online retailer took in nearly $90 billion in revenue in the second quarter. Last year, Prime Day generated at least $7 billion in sales over two days, according to some estimates—levels worthy of Black Friday and Cyber Monday.
Prime Day, a shopping holiday invented in 2015 with no link to any larger social occasion, typically takes place in summer at a slow time for shopping. But it was delayed this year given the surge in online shopping that has strained Amazon’s supply chain.
The event aims to help Amazon reach a more important goal: getting people to sign up for Prime, its 150 million-member service that offers unlimited faster shipping for an annual fee and entertainment like music and movies, thus making Amazon the default e-commerce site for consumers. That’s all the more crucial at a time when Walmart has launched its own program.
As Amazon looks to maintain its dominance over rivals, Prime Day will serve as a “test run” to manage yet another surge in demand ahead of an unprecedented holiday season, Wall Street firm Cowen wrote in a research note. The company has hired 100,000 more workers this year to help it manage the higher sales volume during the holidays.
Further out, Bloomberg this month reported Amazon was planning to build at least 1,000 smaller distribution hubs to counter Walmart’s edge with its thousands of stores. Prime, which costs $119 a year, gives shoppers access to free shipping on many items, entertainment, and deals at Whole Foods Market. In the spring, Amazon struggled to meet its shipping deadlines, something it hopes to avoid during the holidays by working out any kinks during Prime Day.
For now, it will allow Amazon to get a jump on holiday season shopping, something that both industry analysts and the CEOs of rivals like Target and Kohl’s agree will start much earlier in 2020 than in previous years.
