The Amazon Prime journey

The arrival of Summer doesn’t just welcome in unsettled weather and the need to elope domestically or overseas. June and July also signify some milestones in the Amazon Prime journey.

Turning the clock back to June 2021, Amazon introduced additional service levels for Seller Fulfilled Prime, in essence making it harder for many sellers to fulfil the requirements of the programme. Longer cut-off hours for same day dispatch, coupled with the requirement to support either a collection or drop off of ordered items over a weekend, became prohibitive service levels to achieve for many. Established Amazon sellers together with new entrants to the world of selling on Amazon equally felt the impact of these service programme changes. Amazon positioned the changes as merely being in the best interests of customers – however, many sellers felt that they were making successful selling on Amazon simply far more difficult to operate.

So in the past year, Prime has changed operationally as a result. There are fewer merchants/sellers offering Seller Fulfilled Prime. And of course that means that there are more merchants/sellers sending products in for Amazon to pick, pack and dispatch with Amazon Fulfilled Prime. It must also be noted that Amazon have been increasing selling fees over this timespan too – keeping an inexorable squeeze on product margins.

Entering into July, the summer usually heralds a flagship Prime event mid-month – Amazon Prime Day, which this year falls on 12th and 13th of July. In true Amazon shopping event style, it’s an unabashed elongation of a one day event. We remember when Black Friday was one day, too – now it’s a weekend, and, once, spanned more than a week. Now that’s a new definition of ‘the longest day’ by anyone’s view!

Prime Days tend to offer decent discounts on a number of items, although we note that typically these are top-heavy with electronics and Amazon devices such as Echo, Fire Sticks and such like. Successful participation in Prime events, including Black Friday, again exerts its toll on product margins and requires a discount interesting enough to satisfy Amazon into providing the highlighting of participating products.

The sales results of these events are notoriously difficult to gauge, and it will be fascinating to see if this online retail shot in the arm of discounting holds enough sway with 2022’s increasingly spend-cautious consumers. For many retailers viewing from the beleaguered high street, it may be another nail in the coffin and catalyst for the continued consumer behavioural migration online.

At this moment in time and with many turning focus to the summer, how to best navigate airport check-in and security queues, and with people yearning to want away for a break, it would be a fair assessment to suggest that trading may be soft. We shall certainly see, but with Amazon investing heavily elsewhere within its entertainment division of Prime, and Prime Video, the Prime proposition continues to spearhead the battle for customers which is continuing its shift towards the digital.

Photo by David Ballew