While Amazon.com turned a corner in its third quarter in a very rough year, the good news of profits came with a lump of coal in the stocking: A forecast of slowing sales in the critical fourth quarter, which encompasses the holiday shopping season.
Amazon is facing the same headwinds as other retailers (and shoppers, for that matter): Inflation-buffeted prices. Those same whipped-up prices are also causing consumers to batten down the spending.
“We are seeing signs all around that people’s budgets are tight, inflation is still high, energy costs are an additional layer,” Brian Olsavsky, Amazon’s finance chief, said on a call with reporters, according to the New York Times. “We are preparing for what could be a slower growth period.”
What Amazon’s Slowing Sales Mean for Holiday Shoppers
Shoppers, including those who paid for an Amazon Prime membership, tightening their belts this holiday season may take solace in Amazon’s cautiousness. Here are some key takeaways:
Possible lower prices? Keep an eye out for Amazon to get aggressive on pricing. While it may not be able to squeeze vendors, who are already discounting as they shed overstock, Amazon has other discount avenues. It will likely have jaw-dropping deals on its proprietary items. That means deeply discounted Kindles, Firesticks, Fire TVs, Ring home-security products, Audible, etc.
But could supply and delivery be an issue? We all know about the supply chain issues retail has been having the last couple of years. Supply-related out-of-stocks could also be an issue in 2022, and maybe even with Amazon and its celebrated rapid delivery (two days or less, typically). In the past year, Amazon has tightened its belt in building new distribution centers, which could put pressure on its distribution system.
Look for alternatives. Amazon’s increase in Amazon Prime membership fees earlier this year had many people considering alternatives. We provided you with some options, but you may want to consider them again as you compare Amazon’s prices, particularly if there are some wild holiday-shopping-inspired discounts.
Reconsider your Amazon Prime membership. It’s fairly easy to quit Amazon Prime, if you’re belt-tightening or just frustrated with the service and its pricing. You might want to temper that decision to see how pricing plays out for the holiday shopping season. Not a Prime member? You could sign up for 30 days, then bow out. After all, Andy Jassy, Amazon’s CEO, promises Amazon this holiday shopping season will have a “maniacal focus on the customer experience, and we feel confident that we’re ready to deliver a great experience for customers this holiday shopping season.”
Get your holiday shopping done early. A Bank of America survey found 51% of shoppers are aiming to get their holiday shopping done before Black Friday and Cyber Monday. If that’s you, be on the lookout for deals, including Bank of America’s More Rewards Day Nov. 5. That could put more rewards points in your pocket if you’re a Bank of America rewards credit card user. Heck, you could even rack -up those points shopping on Amazon.
Bob was Senior Editor at Kiplinger.com for seven years and is now a contributor to the website. He has more than 40 years of experience in online, print and visual journalism. Bob has worked as an award-winning writer and editor in the Washington, D.C., market as well as at news organizations in New York, Michigan and California. Bob joined Kiplinger in 2016, bringing a wealth of expertise covering retail, entertainment, and money-saving trends and topics. He was one of the first journalists at a daily news organization to aggressively cover retail as a specialty and has been lauded in the retail industry for his expertise. Bob has also been an adjunct and associate professor of print, online and visual journalism at Syracuse University and Ithaca College. He has a master’s degree from Syracuse University’s S.I. Newhouse School of Public Communications and a bachelor’s degree in communications and theater from Hope College.
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