Amazon Prime Day Will Face Aggressive Rivals, Inflation-Weary Consumers

(Update: adds Target Deal Days announcement)

With Amazon announcing the latest iteration of its annual Prime Day event, it didn’t take long before rival retailers began to unveil their own sales and promotional events, at a time when the industry is bulging with inventory and in need of a bump.

In fact, it took less than a day, as Target has now matched Prime Day via what it is calling the “biggest Deal Days ever” that will start one day earlier than the annual markdown campaign just unveiled by the e-commerce giant.

While more clone sales will surely emerge in the coming days, the question now is how consumers will react to an abundance of sales, especially when they discover that Amazon’s two-day event, which is officially slated to run July 12 and 13, is actually kicking-off next week.

Furthermore, sweeping changes in consumer behavior will also be a major new factor in this year’s swirl of mid-summer sales, as PYMNTS research has already shown belt-tightening and “paycheck-to-paycheck” budgetary constraints are now impacting households earnings up to $250,000 per year. And with record gasoline prices soaking up more and more of consumer spending, other findings show a major shift is underway that is seeing shoppers turn from discretionary items and goods and more towards services and basic essentials.

Whether Prime Day, or one of the many other clone events, is able to adjust to this new reality and bring consumers the value they want on the products they need remains to be seen but the expected string of clearance sales could be in for underwhelming results. If so, a lackluster response would only add further bloat to already heavy inventory levels and serve as a reflection of a consumer base that has become numb in the face of what often seems like endless sales.

To that point, prior to Target announcing its concurrent sales event to match Amazon’s offering, the Minnesota-based retailer had already embarked on a process of aggressive cost control and right-sizing its inventory via a mix of markdowns and order cancellations, a move that is expected to heighten competition to capture the minds and wallets of value-minded consumers.

So far, short of a date that has become increasingly more fluid than it was in the past, this year’s Prime Day is being comparably promoted as in years past, with a stream of electronics, fashion, toys and home furnishings being specially priced and available in 18 different countries as well as Poland and Sweden for the first time.

There’s also the fact that the two announcements come just one day after a pair of troubling economic developments, as U.S. Retail Sales fell 0.3% in May and the Federal Reserve approved a 0.75% increase in its benchmark rate — the biggest single day increase in nearly 30 years — in an attempt to rein in inflation that has ticked up to 8.6%.

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