Amazon is eagerly awaited Prime Day The event will take place on June 21st and 22nd. And unlike in previous years, this rate of annual sales coincides with a reopening of the economy and rising inflation.
In May, the consumer price index – which measures the change in the prices consumers pay for goods and services – rose 5% for all items over the past 12 months, according to the US Bureau of Labor Statistics. This is the strongest year-on-year increase since 2008.
How will this affect the Prime Day deals? Buyers should know that.
Will Inflation Affect Prime Day Deals?
The short answer is yes. Consumer dollars don’t go that far while Inflation periods. Buyers will inevitably see higher prices (or smaller discounts) from retailers this year. For example, Amazon has an early deal on the Echo Show 5 smart display for $ 44.99 (usually $ 79.99). The same deal was offered last year, but the list price back then was $ 89.99 so the discount was bigger.
The longer answer, “It depends a lot on what you buy,” says Aaron Cheris, director of America’s retail practice at Bain & Company, a management consulting firm.
Demand has increased as the country’s COVID outlook has improved.
“Due to missing spending during the pandemic and receiving tax incentive checks, consumers are sitting on huge savings,” Michelle Connell, a chartered financial analyst and owner of Portia Capital Management, said in an email.
Now consumers are starting to spend again, which is contributing to rising prices for certain goods. So what is in demand and possibly becoming more expensive? Categories that consumers have largely ignored over the past year, like beauty, shoes, and outdoor recreation, Cheris says. But there is still an appetite for some popular pandemic purchases, including pet care and household products.
Inflation has also hit some categories harder than others as the supply chain gets stuck and it incurs raw material costs like aluminum and lumber. A shortage of semiconductor chips, which are used in large appliances, computers, and other technical products, is driving the price of these items up.
But cost isn’t the only thing to watch out for on Prime Day. Cheris suspects that due to the high demand and delivery bottlenecks for many items, buyers will encounter more storage bottlenecks and longer delivery times.
Is it worth shopping on Prime Day?
Amazon’s Prime Day and sales from competing retailers still have their value. These shopping events usually offer some of the most The biggest discounts of the year ‘ on personal electronics, kitchen appliances, and more. Amazon is known for significantly devaluing its own products, including Echo and Kindle devices.
While new technology deals may be harder to find right now, Prime Day and similar sales can be great opportunities to find significant savings on older products.
“One strategy brands are pursuing is to liquidate inventory because they’re launching a new model,” said Nich Weinheimer, general manager of Commerce Strategy and Retail Media at Skai, a global marketing platform. “It’s very common, especially in consumer electronics, where the next new TV is coming out for the big TV maker.”
It’s also possible that retailers may have better deals later in the year. Big sales will return as we near back to school and Black Friday, a shopping holiday that sees far more retailers than Prime Day attending. However, the Federal Reserve recently forecast that inflation will rise faster than previously expected through the end of 2021, and many experts believe that consumers will have long-term effects.
“There’s a high likelihood that inflation isn’t the ‘passing’ beast the Federal Reserve keeps claiming,” Connell said, citing persistent factors like higher shipping and labor costs.
While there are supply and demand issues, Cheris warns that buyers who wait run the risk of missing the boat in inventory, like a bike shortage that occurred in 2020.
“If you waited until Christmas to buy little Timmy a bike last year, you probably don’t have a bike, or at least not what he wanted,” says Cheris.
So if you have something in mind, holding back may not be in your favor.
How do you get the best deals?
Prepare your wish list (and budget) and start your price research now. Price tracking and comparison tools like Honey and CamelCamelCamel can help you determine if you’re getting a good deal.
While Prime Day doesn’t officially begin until midnight Pacific Time on June 21, Amazon is introducing early deals. To purchase the limited-time discounts, you need a Prime membership.
Copycat events from competing retailers are also popping up. Among the sales already announced:
Best Buy’s The Bigger Deal sale, which is ongoing now, ends June 22nd. It includes reduced prices on headphones, Apple products, and more.
The Kohl’s Wow Deals event will take place in stores and online on June 21-22. The sale will offer discounts on hundreds of items in household, toys, beauty, and apparel categories, according to the retailer.
Target is hosting a three-day, online-only Target Deal Days sale June 20-22. The retailer promises hundreds of thousands of discounts across all categories.
Walmart’s Deals for Days sale runs June 20-23. The retail giant plans to offer “Black Friday-like savings” in electronics, home, fashion and other departments online and in stores. Some offers are exclusive to shoppers or online buyers.
Look for additional sales at other retailers around or on June 21st and 22nd.