Amazon's Big Deal Days Signals Reality - Cautious Consumer Spending

Amazon.com Inc AMZN has initiated its fall sale for Prime members, offering a plethora of deals that purchases of low-cost items like kitchen gadgets and apparel have so far dominated. 

The trend of focusing on smaller ticket items is notable, marking a shift in consumer behavior.

Also Read: Amazon's Holiday Hiring Spree Signals Strong Consumer Demand, Expects Strong Q4 Growth: BofA Analyst

During the first eight hours of the sale, customers spent an average of $38, a 2% increase from the previous year, as per data from Attain. 

The research firm, which gathers insights from credit card transactions, highlighted a cautious approach by consumers, possibly influenced by the ongoing inflation and financial uncertainties. 

This trend is expected to evolve as the holiday season strategies, with Amazon and other retailers keenly observing consumer browsing patterns to tailor personalized offers, Bloomberg reports.

The data reveals a consumer focus on affordability, with about 60% of items sold costing less than $20, and only 3% exceeding $100, according to Numerator. 

The firm analyzed data from 890 shoppers who placed 1,379 orders, underscoring a trend of budget-conscious spending.

Brian Mandelbaum, CEO of Attain, praised Amazon's strategy of monitoring customer behavior to offer customized deals later in the season. 

The cautious spending can be attributed to persistent inflation and increasing debt obligations, the report said. 

With the resumption of student loan payments and dwindling savings, consumers are grappling with financial constraints, the report pointed to a possibility.

However, Adobe Inc ADBE projects a 4.8% rise in U.S. online sales to $222 billion during November and December.

Consumer readiness to begin holiday spending early is evident, with 64% of shoppers indicating a willingness to shop in October, a significant increase from 53% the previous year, according to a RetailMeNot survey. However, the average spending expectation for Amazon's Big Deal Days is $154, approximately $100 less than the anticipated spending during July's Prime Day sale.

Price Action: AMZN shares traded higher by 0.95% at $130.71 on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.