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Amazon Prime Day kicks off

Yahoo Finance’s On the Move panel discuss what to expect from 2020 Amazon Prime Day.

Video Transcript

ADAM SHAPIRO: But we want to talk about Amazon because it is Prime Day. Those shares are up about 1.1, almost 1.2%. And to help us talk about the Prime Day deals, let's bring into the discussion our team of experts. We've got Dan Roberts, Melody Hahm. Who wants to go first on this? Julie Hyman, you buying anything?

JULIE HYMAN: Um, no yet. I don't know if I will. I'm always amazed at how much attention Amazon Prime Day gets, right? It's a made-up holiday that the company concocted in order to drive sales. Usually it gives it a bump in the middle of the summer, but it's not just about what it sells on the day, right? It's about getting a membership boost to Amazon Prime members because those members tend to be more lucrative for the company.

But I mentioned this for perspective in the first hour, and I want to mention it again, that JPMorgan estimates that this two-day Prime event is going to bring in about $7.5 billion for Amazon. Last year its revenue was more than $280 billion. So on a sort of perspective basis, it's not that these two days are so important from a revenue perspective. It's the future membership, perhaps, that it's going to drive, and it's also the attention it gets as we all talk about all of the deals that are on Amazon over these couple of days.

MELODY HAHM: And, Julie, Adam, I actually think the biggest winners inadvertently are the other retailers that aren't Amazon, so whether that's the Chewy, the Walmart, Best Buy, Target-- all of those retailers who are the competitive peers, right, of Amazon also offer these kind of price-cut deals. And as people have become more cynical of whether the deals on Amazon Prime are actually worthwhile or if they're even deals at all, there's a lot more browsing that's happening among global customers.

I do want to point out that a lot of folks are saying the MSPR, the quote, unquote, sticker price that is listed for a lot of these Prime Day deals, they're much higher than they are during a normal time when it's not Prime Day. So I think consumers have to be a little bit cautious. Of course, there are some select deals. I know Dan Howley rattled off some really great tech deals, but at the same time, we have to sort of be discerning and just don't assume that whatever the price is listed is actually going to mirror a good deal.

And one last note on that point-- I think the best way for consumers to shop is to track specific items that they want, right? If you really have your eye on a vacuum, if you have an eye on a TV, then just do price alerts for that one product and use an extension like Honey, like RetailMeNot to see how the pricing has changed over a period of time. Don't just rely on these sorts of gimmicky marketing schemes, I would say, that Amazon has really been masterful at.

DAN ROBERTS: Of course, what's interesting about Melody's point there, you guys, the idea that you should track a specific item you're looking to buy, well that would make a lot of sense. But I think the reason Amazon Prime Day is so successful is because a lot of people do not do that. Instead they see that the event is coming, and they choose to go and check out what's available. I mean, there's, you know, an age-old adage about sales that the danger is it gets you to buy things that you wouldn't necessarily need or otherwise have bought. You say, oh, OK, and it convinces you. It's going to be a blowout sales event.

I'm more interested largely in the idea of the effect this will have on this year's holiday shopping season. I think we've already talked about how amid the pandemic with e-commerce surging for so many retailers, it already would have been a very strange holiday shopping season online-- the idea being, you know, is a Black Friday and a Cyber Monday really as appealing and meaningful as it was in the past when we're home anyway and probably we're already doing a lot of online shopping?

Now you have Prime Day at a time when usually it doesn't happen. I mean, it's in the fall. You know, how much is it going to cannibalize other retailers for the holiday shopping season? How many people now will buy something on Prime Day from Amazon that maybe they would have waited until Black Friday or Cyber Monday and looked around more and shopped more widely online for?