00:00Amazon kicks off its annual Prime Day sales event this week, one month earlier than usual.
00:05The world's fifth largest company trying to compete for fewer discretionary dollars from consumers as AI takes a larger role
00:11in the shopping process.
00:13With us now is Poonam Goyle, senior e-commerce and retail analyst for Bloomberg Intelligence.
00:17Great to have you with us. Let me play the role of the cynic here who thinks this is a
00:21silly, made-up holiday that I guess many millions of people participate in.
00:25But how critical is it to Amazon's bottom line and why the move in date here? Why move this up
00:30in the way in which Amazon has?
00:32Sure. So it is very important for Amazon. It's a time where they can offer deals through their own products
00:38and their third-party products and really drive consumer spend.
00:41It's about pulling spend forward, right? If you think about the holiday calendar year, there really isn't such an event
00:47in the summer outside of back to school.
00:49So when they launched this in the summer, it was just to pull forward much of the spend to try
00:55to grab the consumers' wallets and dollar share earlier.
00:58Do they do that? Yes. And how important is it to answer your question? It's very important.
01:04They don't disclose how much they capture on Prime Day, but we do know that it's a meaningful driver to
01:09their top line.
01:10When it comes to the bottom line, because it is deal-driven, I would think that a lot of it
01:15doesn't flow to the bottom line as there are deep discounts placed in here, just like they are on Black
01:20Friday.
01:21So then what is the point of this? If they're not really making a bottom line profit off of this,
01:25is it just to get consumers in the door?
01:28It is to get consumers in the door, but more than that, it's to get Prime members.
01:32If you think about the Prime ecosystem, over 200 million Prime members around the globe, what this day does, and
01:38based on our survey that we ran for the last five years, is it attracts more Prime signups.
01:45So you can only shop on Prime Day, Prime deals, if you are a Prime member.
01:49And in our survey, we ask this every year, if you don't own Prime, why? And do you plan to
01:55sign up for Prime?
01:56And what we found is the younger generations, the millennials, the Gen Zs, are very likely, if they don't have
02:02it, to sign up for Prime Day and then keep the subscription indefinitely.
02:06So that's where the value add is.
02:08Thank you for including millennials and the younger generation. We appreciate that here at the table. David, go ahead.
02:13You and your colleagues have done this survey of consumers who are going to maybe avail themselves of these discounts,
02:19and you look at kind of spending during Prime Day.
02:21That's one of the questions that you asked, how much consumers intend to spend when these Prime Day celebrations are
02:27underway.
02:28And I'm curious what those numbers tell you. Maybe we have a screenshot that we can put on the screen.
02:32It seems like it's mostly in the middle there, between $101 and $200, so not an extremely large amount of
02:37money that people plan to spend.
02:38What does it tell you about the health of the consumer more broadly, their appetite to spend more, their capacity
02:43to spend more right now?
02:44And we see kind of the economic constraints at play that we do.
02:47Yeah, so consumers are definitely pulling back, which is what makes this day important.
02:51As you mentioned, you know, when you look at the sweet spot or that mid-range here between $100, $200,
02:56it's about the same, really, as last year.
02:59But when you look at the higher band here, the $500 or above, you can see that there's a slight
03:04pullback.
03:05So there is some pullback that we are expecting this year based on higher gas prices, just inflation from tariffs,
03:12et cetera.
03:13And we do think that consumers are going to be deal savvy.
03:16In fact, you know, in our survey, we had asked, how many of you have a list before going into
03:22Prime Day and what you want to buy?
03:23And it was over 50% said that they have a list of what they intend to buy on Prime
03:29Day.
03:30And not only that, when we look at the categories that they're buying on Prime Day, it's not your big
03:35ticket items.
03:36I mean, it is, but it isn't all of it.
03:38There's a lot of everyday items that they're planning to buy.
03:41And that just kind of goes to show you that Prime Day is important because they're looking to buy what
03:48they wanted for maybe the last three months or into the next three months on Prime Day to really take
03:53advantage of those deep deals.
03:55You also found in your research that agentic sales are increasing to $500 billion by 2030.
04:03And I turned to our producer this morning, Patrick, and I said, what does that mean?
04:06Does that mean like AI is procuring things for companies?
04:09And he said, no, that can include a lot of things.
04:11So can you explain to us what you mean in a retail setting by agentic sales and agentic agents and
04:16why this is going to be such a big thing and already is becoming such a big thing so quickly?
04:21Absolutely. So when you think about e-commerce sales today, most of them happen through your mobile app, you browsing
04:27and buying them directly.
04:29Agentic has a few different ways you could look at it.
04:31One is fully agentic and one is semi-agentic.
04:34So the $500 billion number that you refer to is fully agentic.
04:38That means you go into an agent and you say, I'd like to buy a black dress for prom.
04:45Let's just say that that's your query.
04:47That's all you have to say. One prompt and it knows where you want to buy it.
04:51It knows how much you want to spend and it knows how soon you need it and it just ships
04:55to your door.
04:56Now, is that going to happen for that black dress for prom?
05:00Probably not.
05:01But will it happen for your laundry detergent, for your gallon of milk, for your tools, for your tires?
05:07Sure.
05:07So replenishment items are a big part of the fully agentic equation, but semi-agentic, which is when you use
05:14an AI agent to talk back and forth to like Amazon, Alexa for shopping.
05:20It's when you engage the agent to search for something.
05:24For example, when you use Alexa for shopping, you go ahead and say, I want this power washer, for example,
05:29and find me the best power washer.
05:32It needs to wash this many square feet.
05:34It needs to have AI abilities, et cetera.
05:37And it needs to be under $500.
05:40Today, it's $650.
05:42When it drops to $500, I should have it.
05:45And it just happens.
05:46In three weeks, when it drops, you'll have it at your door.
05:48So that's semi-agentic.
05:49And we think over 60% of transactions in e-commerce in 2030 will have an agent involved in one
05:56way or another.
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