The massive four-day shopping event for Amazon Prime members kicked off Tuesday and runs through the end of the week, but early survey data suggest the sales event is off to a sluggish start, with average household spending on day one tracking below last year's pace.
Bloomberg cited high-frequency data from market research firm Numerator, which surveyed thousands of Prime members and found that the average household had spent about $89 as of 4 p.m. Tuesday, the first day of Prime Day.
That average total sales ticket was down about 16% from the same point during last year's event, suggesting Amazon's Prime Day is off to a softer start as cash-strapped consumers are still reeling from months of soaring gasoline and diesel prices, despite the latest pullback in pump prices following an interim US-Iran peace deal.
Another reason for the softer activity on day one of Prime Day could be that cash-strapped consumers are simply not seeing the deals they expected. That was echoed by marketing firm PMG, which said Prime Day discounts would be lighter this year. Some of that is because merchants face higher costs and tariff uncertainty, both of which are pressuring margins.
According to Numerator, about half of shoppers said inflation and higher living costs have driven them to Prime Day. Throughout the four-day shopping period, the survey found that households plan to spend about $187.
Ohio retiree Patrice Kihlken told Bloomberg that discounts on summer dresses and jewelry-making supplies were rather disappointing.
"It's just underwhelming to me," said Kihlken, 65. "Most of the things that I looked at, they're 5%, 10%, maybe 15% off. Anything that's really nice is not on sale."
Prime Day's slow start should be seen as a proxy for consumer sentiment, as it shows household willingness to spend outside normal weekly purchases, as well as tests discount elasticity, or the willingness of households to respond to deals.
The takeaway so far is that the soft start is an ominous sign, but there are several days left in the big sale.
Analysts from UBS to Piper Sandler have pointed out incoming tailwinds for consumers with plunging fuel prices:
Yet there might be a lag period before consumer sentiment finally shifts higher and translates into higher spending.