Amazon's latest sales event demonstrates 'the power of the Prime subscription'

Amazon ‘s (AMZN) strong execution at its fall sales event this week again showed the deep value of the Prime subscription model and suggested the ecommerce giant should see a robust holiday shopping season, driving retail revenue through the rest of the year. Amazon’s two-day Prime Big Deal Days on Tuesday and Wednesday “outpaced” last year’s inaugural “holiday kickoff” event , the company said Thursday. The event is a follow-up to Amazon’s main Prime Day sale held in July. The Club holding said Prime members, who pay $139 per year for a subscription that includes fast shipping, ordered more than 150 million items from third-party sellers during the 48-hour event, up from about 100 million items in 2022. “Another solid Amazon shopping event shows the power of the Prime subscription and the market share gains it has over its retail competition,” said Jeff Marks, director of portfolio analysis at the Investing Club. Moreover, the “deals and savings Amazon offers is a reason we think the U.S. Federal Trade Commission’s antitrust lawsuit against the e-commerce giant is misguided and won’t have a material impact,” he added. The average spend per order during this week’s event was $53.47, down from Amazon’s July Prime Day sale, but up slightly from last year’s fall sale, according to market research firm Numerator . Amazon currently maintains about a 39% share in the overall ecommerce retail market, according to Andrew Lipsman, a retail analyst at market research firm Insider Intelligence. So while the company’s Prime growth has matured, there’s significant room for Amazon to gain further share, Lipsman argued. “Amazon has consistently gained share year-in and year-out until the last couple of years. In the last two years, however, its market share has flatlined,” Lipsman said. That’s largely because Amazon has heavy exposure to electronics, an underperforming category that has “become a drag on overall gains,” according to Lipsman. Still, Amazon’s latest Prime event is “a strong indicator of consumer demand heading into the holiday season,” he said. In September, Amazon announced plans to hire 250,000 workers in preparation for the holiday season, a 100,000 increase on the company’s holiday hires in 2022. And that “incremental hiring could be a positive read-across on Amazon’s internal demand forecast into the holidays,” according to Goldman Sachs. (Jim Cramer’s Charitable Trust is long AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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An Amazon worker moves boxes on Amazon Prime Day in the East Village of New York City, July 11, 2023.

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