Amazon Prime Day Deals Are Almost Here

NEW YORK — It’s summer and deals seem easy, especially since prices on many consumer products are high.

July sales events have become a seasonal revenue driver for the retail industry since Amazon launched its first Prime Day in 2015. While consumers may be enticed by touted can’t-miss savings on certain products, personal finance experts say shoppers should be careful not to fall for potentially misleading marketing or succumb to impulsive purchases.

Amazon has been building anticipation in recent weeks for its 10th Prime Day event, which will take place Tuesday and Wednesday, and is exclusive to customers who pay $14.99 per month or $139 per year to receive free shipping and other benefits as Prime members.

Rival retailers have tried to capitalize on some of the excitement of Prime Day in the past by offering their own discounts during the two-day event. This year, Walmart, Target, Kohl’s and TikTok newcomers Shop and Temu all launched summer promotions ahead of Amazon, hoping to siphon off some of the e-commerce giant’s savings-hungry customers. Macy’s, meanwhile, will roll out what it calls its “best summer deals” during an eight-day discount event that kicks off Tuesday.

Why do retailers offer so many summer discounts?

July sales help retailers attract customers looking to start back-to-school shopping, the industry’s second-biggest shopping season after the winter holidays. Price cuts also draw some discretionary spending from shoppers who have their eye on gadgets, household items and seasonal items like a bikini or a new summer dress.

Discounts can help retailers combat the “summer retail spending lull” as consumers shift their spending toward summer vacations and services like dining out, according to John Mercer, global head of research at Coresight Research.

“It’s a little bit of excitement for this time of the year,” when retailers can struggle to generate more revenue, Mercer said. Companies have also relied on discounts to fuel consumer spending during the recent period of inflation and high interest rates, he said.

Amazon doesn’t disclose how much revenue it’s making from Prime Day, but it has given some hints that it’s been a success. The company said last year’s event ended up being the “biggest single day of sales” in the company’s history, with customers purchasing more than 375 million items.

Research firm Emarketer estimates that Amazon’s global Prime Day sales will grow to $12.5 billion in 2023. The company forecasts that sales will grow by about 7% this year.

Are the prices offered actually promotions or something else?

It depends on who you ask.

Retailers are hyping up their promotions to draw people in. But the New York Times-owned product review website Wirecutter published an article this month saying that most of Amazon’s early bird deals this year “stink.”

Santa Clara University business professor Kirthi Kalyanam, who is writing a book about Amazon, said Prime Day deals have historically been good. That’s because the company has been able to pull discounts from big-name brands like Apple and entice third-party sellers to lower their prices by promising to feature them on Amandon’s website, according to Halyanam.

But Prime Day discounts may be less relevant these days as shoppers become more accustomed to the ultra-cheap products offered by Amazon competitors Shein and Temu, which were founded in China.

“A lot of these deals may not be as competitive compared to Temu and Shien,” Kalyanam said.

At the same time, he noted that competing retailers will likely look at Amazon’s prices and try to match them on a day-to-day basis. Last week, he said he saw Best Buy lower prices on two products after Amazon revealed some of its early deals.

Consumer data firm Numerator said most of the roughly 5,000 Prime Day shoppers surveyed after last year’s event saw product discounts of up to 40%. Survey respondents said a quarter of items were discounted by 60% or more.

Some shopping experts say some past Prime discounts weren’t as big as they seemed.

What are some tips for bargain hunting and budgeting?

Personal finance experts advise being careful when budgeting before making a purchase.

“Avoid the false sense of urgency of manufactured holidays,” advises Mark Elliot, chief customer officer at financial services firm LendingClub. “The idea that, ‘The more you spend, the more you save’ is simply not true.”

Dan Egan, vice president of financial and investment advisory firm Betterment, says shoppers should make a list of things they need before the sales start so they can make informed purchases. He also encourages consumers to avoid shopping late at night or when they’re bored.

“Once you have a list, you’re less likely to be distracted by things you don’t need,” Egan said. “If that list contains almost nothing, I’d say delete the (retailer) apps from your phone for the next week or two. Otherwise, you’re going to get a ton of notifications.”

Anyone who already has credit card debt should remember that the interest paid on that debt could wipe out any savings made from shopping in the summer sale, he added.

“A contract is not a contract if you have to pay interest on it,” Egan said.

As Erin Witte, director of consumer protection at the Consumer Federation of America, points out, while it may seem reasonable for shoppers to try out a free or temporary membership to get access to the best deals during summer sales, such programs typically charge the customer’s credit card a fee after a short period of time.

“Set a reminder on your calendar to cancel if you don’t want to continue your subscription,” Witte said. “Think about that right at the beginning. And remember, these companies design their product to be easy to sign up for but hard to cancel.”

Consumer Reports also offers some tips: download the Amazon app, sign up for invite-only deals available to a select group of shoppers, and join the waitlist for limited-time deals that have already sold out.

Don’t forget to look around

Filling your Amazon cart online is tempting for Prime members because they pay for access to Prime Day deals. However, it’s always a good idea to compare prices on multiple websites before making a purchase.

Unlike Prime Day deals, Walmart’s discount event this month was open to everyone. However, the company sweetened the deal for its Walmart+ members by offering them early access.

Target offered discounts exclusively to customers enrolled in its Target Circle loyalty program and used the week-long event to promote a new membership program designed to drive sales and store traffic.

TikTok Shop, the e-commerce arm of the popular video-sharing app, has opened its summer sale event to the public. The event kicked off July 9 and will run through Wednesday.