A stainless steel water bottle with a straw lid, a portable balloon pump machine, a clay modelling kit and a women’s sports bra are currently trending as the most popular sale items in the UK, as Amazon’s annual Prime Day event begins.
What they all have in common is a price under £20, and this straw lid poll suggests buyers are tightening belts, as the cost of living soars, and are not interested so much in “big ticket” items.
But then, this year’s Prime Day is harder to read than others in assessing the state of ecommerce. We have had the distortions of pandemic binge buying, supply chain problems and now rising inflation putting a squeeze on household budgets. Research firm Insider Intelligence suggests sales could climb over the two-day event to about $7.76bn in the US, up 17 per cent on last year, but that would be helped by a date shift from June to mid-July and more consumers doing back-to-school shopping.
As well as driving sales, Prime Day is a big advert for the benefits of Prime membership at a time when consumers are considering cutting back on subscriptions to save money. Amazon had around 172mn Prime members at the half year, but that was flat on six months earlier. The company did itself no favours in February when it raised US prices to $139 from $119 a year and to $14.99 from $12.99 for a monthly subscription.
Dave Lee in San Francisco reports Amazon’s stock is down more than 30 per cent this year and overall revenue growth has slowed to its lowest rate for two decades. In its most recently reported quarter, sales in the company’s online store had fallen, year on year, by 3.4 per cent.
“I’m putting my bet on [Prime Day sales] being lower than expected,” said Guru Hariharan, a former Amazon executive and now chief executive of ecommerce management software CommerceIQ. “And that will indicate a lower consumer sentiment. That will then give a bellwether for total retail, and in turn a bellwether for the entire economy. This is the tip of the spear.”
The current uncertainties mean Amazon has been laying the groundwork for what could be a second Prime Day-like event in the fourth quarter — the first time it would hold two in the same year. Consumers tend to like two-for-one deals, but a second event suggests Amazon is desperately seeking solutions to its slowing sales.
The Internet of (Five) Things
1. Twitter attacks Musk withdrawal
Twitter has hit back at Elon Musk’s attempt to walk away from his $44bn acquisition of the social media company, calling it “invalid and wrongful” and accusing him of breaching the merger agreement, according to a letter sent to the billionaire’s lawyers. Lex says Twitter’s ambitious goal of increasing annual revenue to $7.5bn and reaching 315mn daily users by the end of 2023 — growth of about 50 per cent from 2021 levels — looks less realistic by the day.
2. Peloton halts in-house bike production
Cash-strapped Peloton is ending in-house production of the exercise bikes that earned the connected fitness company a fanatical following, in the latest strategic rethink to follow the sharp reversal in its financial fortunes. The New York-based group said it would suspend operations at Tonic Fitness Technology, the Taiwanese manufacturing facility it acquired for about $45mn, less than three years ago.
3. Indian tycoons battle over 5G
Gautam Adani’s Adani Data Networks became the first to bid in India’s upcoming 5G spectrum auction, marking his entry into the sector where he will go head to head against fellow tycoon Mukesh Ambani. India’s telecommunications department said other bidders were Ambani’s Jio, Vodafone Idea and Bharti Airtel, the survivors of a data pricing war launched by Jio when it entered the fast-growing market in 2016.
4. Spotify buys Heardle
Spotify has acquired music trivia game Heardle. In a blog post published on Tuesday, Spotify described the game — which launched earlier this year amid the rising popularity of Wordle — as a “tool for musical discovery.” The game gives players six chances each day to identify a different song based on short audio clips.
5. Netflix coming soon to a cinema near you
“I think you’ll see that Netflix is going to start incorporating much larger theatrical windows into a couple of their bigger projects every year because they see the tremendous value in the pop culture impression that makes,” Joe Russo, co-director of the streaming service’s latest action-thriller The Gray Man, tells Chris Grimes.
Tech tools — Nokia’s latest line-up
HMD Global, the exclusive licensee of the Nokia brand, has announced a new tablet and three feature phones today that maintain its reputation for durability and affordability. The 8in T10 tablet can be an entertainment and communications device as well as having a second-screen function to expand your PC or laptop’s display. It will be available in the UK from August, starting at £129 for a 32GB version. The non-smartphones are the 8210 4G, the 5710 XpressAudio and 2660 Flip, available in late July for £64.99, £74.99 and £64.99 respectively. The 8210 is a throwback to the original 1999 model, but with a large 2.8in display and weeks of standby battery life. The 5710 has dedicated audio control keys and earbuds housed in a slider on the back of the phone. The 2660 flips open and has a large display, big buttons and long battery life. It has a special charging cradle as a £20 accessory.
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