As summer heats up, so do the bargains, offering some relief amid rising consumer prices.
Since Amazon launched Prime Day in 2015, July has become a pivotal sales month for the retail industry. While the allure of “can’t-miss” savings is strong, personal finance experts urge caution to avoid falling for misleading marketing or impulsive purchases.
Amazon is gearing up for its 10th Prime Day event, set for Tuesday and Wednesday, exclusively for its Prime members, who pay $14.99 monthly or $139 annually for perks like free shipping. Rivals like Walmart, Target, Kohl’s, and newcomers TikTok Shop and Temu have also launched summer promotions, aiming to capture some of Amazon’s deal-hungry shoppers. Macy’s will join the fray with an eight-day discount event starting Tuesday.
Why So Many Summer Discounts?
July sales help retailers attract early back-to-school shoppers, the second most crucial shopping season after the winter holidays. These discounts also entice discretionary spending on gadgets, household items, and seasonal products like bikinis or summer dresses. John Mercer, head of global research at Coresight Research, notes that discounts help counteract the “summer lull” in retail spending as consumers focus more on vacations and dining out.
Amazon doesn’t disclose Prime Day revenue but noted that last year’s event was the “single largest sales day” in its history, with over 375 million items sold. Market research firm Emarketer estimated Amazon’s global Prime Day sales at $12.5 billion in 2023, forecasting a 7% increase this year.
Are the Deals Genuine?
The quality of Prime Day deals is a mixed bag. Retailers heavily promote their sales, but Wirecutter, a product review site, recently criticized Amazon’s early deals. However, Kirthi Kalyanam, a business professor at Santa Clara University, argues that Prime Day historically offered good deals, thanks to discounts from top brands and incentivized third-party sellers.
Yet, the competitive landscape has shifted with ultra-cheap products from Chinese competitors Shein and Temu. Kalyanam notes that many Prime Day deals may not match up to these competitors, but rival retailers like Best Buy often adjust prices in response to Amazon’s deals.
Consumer data company Numerator reported that most Prime Day shoppers saw discounts of up to 40%, with a quarter seeing discounts of 60% or more. However, some experts caution that past Prime discounts were not always as significant as they seemed.
Smart Shopping Tips
To avoid overspending, personal finance experts advise being strategic. Mark Elliot, chief customer officer at LendingClub, warns against the false urgency of manufactured shopping holidays. Dan Egan, a vice president at Betterment, recommends making a list of needed items to stay focused and avoid late-night or boredom-driven shopping.
Shoppers should also remember that any perceived savings can be negated by credit card interest if not paid off promptly. Erin Witte, director of consumer protection at the Consumer Federation of America, advises setting reminders to cancel free trial memberships to avoid unexpected charges.
Consumer Reports suggests using Amazon’s app, signing up for invite-only deals, and joining waitlists for sold-out offers. Importantly, always compare prices across multiple websites before finalizing a purchase.
While Amazon Prime members might be tempted to fill up their carts, it’s wise to shop around. Walmart, for instance, offers its discount event to everyone, with early access for Walmart+ members. Target’s discounts are available through its Target Circle loyalty program, and TikTok Shop’s summer sales are open to all.
In summary, while Prime Day offers potential savings, a careful, informed approach can ensure you truly benefit from the deals.
