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Amazon (AMZN) -0.30% as two-day Prime Day event gets underway
Amazon (AMZN) traded down 0.3% on Monday as the online retailer’s two-day Prime Day event got underway with discounts on a range of products for its subscribers.
Now in its seventh year, Prime Day has become a vehicle for Amazon to drive revenue during what is traditionally a slower month for the sale of goods.
However, the world’s biggest e-commerce site may find it more challenging this year due to a recent pullback in retail, especially in the US, and competition from rivals including Walmart (WMT) and Target (TGT).
Data shows that there was a 1.3% decline in retail sales of $620.2bn in the US last month, while job growth has also slackened.
Despite that, JP Morgan analysts believe that Amazon’s brand power will pull in more customers and lead to a 10.4% uptick in gross merchandise revenue (GMV) of $11.6bn.
That would be enough to increase the Seattle-based company’s revenue by $6bn for the current quarter, and there may be other more wide-reaching benefits.
“Prime Day’s financial benefit also extends far beyond the 2-day period through the conversion of new Prime subs & addition of third-party sellers to the platform,” JP Morgan’s Doug Anmuth noted.
Anmuth said that the extension of third-party delivery networks is important for Amazon due to additional pressures around shipments caused by the pandemic.
Amazon has brought in 75,000 new workers in fulfilment and transportation and increased pay rates for all of its staff to prepare for the two-day extravaganza, which will end on Tuesday (22nd June).
On Monday, AMZN shares were modestly lower, falling 0.30% to $3,476.43 by around midday on the Nasdaq.
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