The Halo Effect: Prime Day Success Leads to Retail Boom
It works. That’s the main takeaway from the latest round of Prime Day data from Criteo, which shows that sales during Amazon’s annual promotional event were hotter than ever in 2023.
The role of Prime Day as one of the premiere shopping events of the year, led only by Black Friday and Super Saturday, in late December, remains intact, despite the fact that Prime Day isn’t centered around a true holiday or a time when consumers are typically shopping for gifts. This year’s Prime Day also came in the midst of a difficult macroeconomic environment, when many consumers have shown concern about rising interest rates and inflation.
Product sales increased 99% within the first 24 hours of Amazon’s Prime Day event on July 11th this year, peaking around 2 pm. By noon of July 12th, the second day of the event, participating retailers saw another increase in products sold — this time up 77%, compared to July 10th, according to Criteo’s data.
“Prime Day is always a major shopping event, but this year it has been an early indicator for holiday shopping amidst high inflation and rising interest rates that have consumers more cautious of their spending,” says Michael Greene, senior vice president of global vertical strategy at Criteo.
Prime Day’s halo effect—where retailers that offered deals during the event experienced an increase in product sales—was greater in 2023 than in 2022, when Criteo tracked a 30% increase over the baseline for retailers that also offered specific deals around Prime Day. In 2021, Criteo’s retail partners saw a 67% increase.
“During Amazon Prime Day, consumers can significantly save when it comes to back-to-school shopping, getting household necessities or even getting a head start on holiday shopping, which is more meaningful than other years given the difficult macroeconomic environment,” says Greene. “This is creating a higher halo effect compared to previous years.”
Greene cites pent-up consumer demand as one potential reason for the success of this year’s Prime Day.
According to Amazon, Prime members bought more than 375 million items during the two-day event, making 2023 the biggest Prime Day event in the promotion’s eight year history.
Amazon Prime Day was first held in 2015, and has since become one of the largest shopping events of the year. Shoppers who pay for Amazon Prime, a paid subscription service, can find deals on millions of products across all categories, including electronics, home goods, and fashion, during the two-day event.
Average order size during Prime Day increased from $52.26 in 2022 to $54.05 in 2023, according to data from Numerator.
Greene sees a connection between the success of this year’s Prime Day and recent growth in the retail media space, particularly as it has to do with the way consumers can quickly go from click to conversion.
“Promotional periods like Prime Day are exceptionally difficult times for any brand or marketplace seller to get its products to stand out, especially as those items with the steepest discounts garner naturally high shopper attention,” Greene says. “Retail media has emerged as a critical tactic for brands and sellers to cut through the noise and get their products in a strong position on the digital shelf.”
Just as other retailers are now running their own version of Prime Day, they’re also providing robust Sponsored Products, display, and programmatic media offerings to give brands and sellers a similar set of tools to those they have historically applied on Amazon.
“Through the rise retail media, retailers are competing with Amazon’s sponsored products playbook Amazon may be an early leader in this $100+ billion retail media market, but there’s plenty of retail media ad dollars to go around from retailers that have launched their own media networks to activate first-party shopper data to deliver relevant ads near the point of purchase,” Greene says.
Any questions about whether Prime Day would be successful in the midst of a difficult economic environment have been answered in a big way, and Greene says retailers have plenty of reason to be optimistic about holiday sales and the year ahead.
“We’ve seen that sales offered by Prime Day and other competing retailers have incentivized cost-conscious consumers to shop, despite the difficult economic environment,” he says. “The sales results we’ve seen this week all point to Prime Day being a bellwether for early holiday shopping.”