Amazon Prime Day has entered a new era

It's a new era for Amazon (AMZN) Prime Day in more ways than one.

This year's Prime Day has been considered to be muted, as macroeconomic events have roiled the marketplace. Inflation, cooled consumer spending, and years-long supply chain crises have made merchants less likely to go all-in on those deep discounts.

Additionally, the past few years of supply chain issues mean that fewer sellers have excess inventory — in fact, they’ve grown used to having not enough inventory, making merchants less likely to cut prices all that deeply, according to Kannan Srinivasan, a professor of management, marketing and business technologies at Carnegie Mellon University.

The competitive landscape on this Prime Day is also different, as other retailers aren't necessarily holding their own rival events. This year, Walmart (WMT) even opted out.

“Amazon is a bit more on convenience than on price," said Srinivasan. “[When it comes to pricing] slowly but surely, Walmart's getting its act together. So, strategically it makes sense for Amazon to focus on convenience since other retailers are getting more competitive in terms of prices.”

In 2015, when Amazon Prime Day first launched, the event served as a way for Amazon to attract and retain Prime members, building increasingly deep relationships with users. It was also a way for Amazon and the merchants on its platform to offload extra inventory.

Now, in 2022, times have changed, at least in some ways. On top of macroeconomic challenges, Amazon itself has also been through a number of changes at its highest levels. CEO Andy Jassy only took the helm last year, and recently long-serving consumer chief Dave Clark resigned to join Flexport.

It's all about Prime members— and always has been

In the end, Prime Day’s role is the same — to attract and retain moderate to heavy users of Amazon. Additionally, these are situations where consumers buy what they would have bought anyway — they’re just buying it sooner and at a lower price, said Srinivasan.

“Within the context of Amazon, I always thought of it as a way to retain membership," he told Yahoo Finance.

It's also not an accident that many of Prime Day's top deals are Amazon-branded products.

“I've seen an evolution in Amazon," said Srinivasan. "Recently, some of the Amazon ecosystem products have sold really well, so from that perspective Prime Day is a win-win. So that’s interesting strategically.”

Srinivasan also thinks that it makes sense for Amazon to make Prime Day multiple events, which it will start doing this year. If the goal is to lock in existing and prospective Prime members, it tracks that offering more savings, more frequently, would benefit both customers and the company. Additionally, Amazon's been looking to expand Prime Day internationally, though right now an outsized portion of the event's sales still are likely to come out of the U.S., data suggests.

Though Prime Day focuses on Prime members, it's investors who will be watching the results especially closely, Nicholas Jones, an analyst at Citizens-owned JMP Securities, wrote in a July 12 note.

"As Prime Day unfolds this week, investors will be focused on the impact it can have on AMZN's retail sales," he wrote. "We expect a low- to mid-single-digit benefit in 3Q revenue... We see AMZN as well positioned to navigate a tough macro backdrop."

Allie Garfinkle is a senior tech reporter at Yahoo Finance. Find her on twitter @agarfinks.

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