The United States had its biggest online spending day of the year this week with the launch of Amazon’s 48-hour “Prime Day” sales event.
Total online sales topped $6 billion, up 7.8% from a year ago, according to the Adobe Digital Economy Index, which tracks online sales.
The amount also exceeded last year’s Thanksgiving spending, according to data from Adobe, which indicates that this week’s big spending was heavily influenced by discounts on offer. But that doesn’t mean consumers are spending recklessly. They remain price sensitive in the current economic environment.
With inflation levels hitting a four-decade high in June, consumers are looking for bargains wherever they can get them, said Vivek Pandya, digital insights manager at Adobe.
Even as prices rise for basic necessities like food and gasoline, they are starting to fall for so-called durable goods like clothing, appliances and electronics. And consumers are taking notice.
“Buyers saw an opportunity to stretch their purchasing power a bit more and do some spending here,” Pandya said, referring to the types of consumer goods whose prices have leveled off. “This is very focused on the level of discount that started around this Prime Day event. Consumers are responding because they have the opportunity (to save).”
Adobe found that in June, online prices were down 1% month over month. Pandya said that after the frenzy of buying items such as exercise equipment and home office supplies at the start of the pandemic, retailers found themselves with larger stocks of these products, as consumers have now redirected some of their spending to services, such as travel.
“Retailers are looking to maintain growth, but with demand starting to drop a bit, that’s when (they) need to reintroduce discounts to entice consumers to buy again,” he said. -he declares.
Following Wednesday’s inflation report, Bank of America economists said the United States is likely to enter a mild recession as consumers cut back on spending. Economists note that spending on services like travel has not been as robust as they hoped.
“Lower spending on goods has been part of our outlook for some time, but the weakness in services was a surprise; we expected household spending to rotate from goods to services upon reopening, leading to more robust services spending,” Bank of America said.
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Post expires at 12:13am on Friday July 22nd, 2022