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Morning Brief: How retailers are competing with Amazon Prime Day

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Retailers like Target, Walmart and Best Buy are rolling out discounts to compete with Amazon's Prime Day. Yahoo Finance’s Myles Udland shares the details.

Video Transcript

JULIE HYMAN: [INAUDIBLE] wrote about Prime Day, perhaps surprising us all. [CHUCKLES] Myles, you talked about sort of the significance of Prime Day. What it signifies for Amazon itself, the legacy of Jeff Bezos, what it means for other retailers. Sort of big picture thoughts on Prime Day. Why don't you walk us through it?

MYLES UDLAND: Yeah, I mean, so, look. Jeff Bezos' last day as the CEO of Amazon is fast approaching. After that, he's going to be launched into almost space. We can leave that conversation for a time. I'm sure we'll discuss his Blue Origin flight as it gets closer. I think it's in mid-July.

But really, the thing with Prime Day is it fits within this architecture of how I think Amazon became Amazon, right? Amazon is a culture of experimentation. They launch a lot of different products. They take a lot of different chances. And that's why they have several businesses within the Amazon kind of structure here that on their own would likely be S&P 500 companies. Amazon Web Services the obvious one among them. They also own Whole Foods, huge grocery business. Their third party business, their third party sellers growing faster than the overall enterprise at this point.

And Prime Day, which they launched in 2015 to commemorate the 20th anniversary of the website. It's, I mean, as you mentioned, Julie, it is an invented day. And there's going to be part of it, which is Amazon clearing out inventory, or them telling their third party partners, here's a chance for you to clear out your inventory. Amazon certainly has their own products featured very prominently as a part of the promotions during the Prime Day event.

But what I also think is notable is that go around the web right now Best Buy's running a sale. And when's it run through? Runs through tonight. Target has a sale that runs through tonight. Walmart has a sale that runs through tomorrow. These are Amazon's chief competitors that are all looking at the Prime Day holiday as a chance for them to also sell product. And you know what? Some of those companies might have faster growth over these two days than Amazon themselves has.

And I think on the one hand, this certainly shows Amazon being a force that the retail industry must bend itself around. Amazon launches promotions, we follow with them. And I think Amazon is fine with that. It's not that they're necessarily trying to make Walmart hurt on margins, or crush Target. But it's that if Amazon can condition every customer in the world to shop on the internet, shop anywhere over Prime Day, the company's basic bet is that it will capture a decent and growing proportion of that activity, and thus make both the Prime membership and Amazon's mind share with consumers continue to go up over time.

And it just, to me, speaks to the center of really the Bezos strategy playbook, and the playbook that I think investors should hope the company keeps in mind as they go through the next 25 years of their corporate history. The reason Amazon is Amazon is because the quote that I pulled out of Bezos' letter is as much as they're creating a problem for Target, Walmart and others, they're creating an opportunity for them. But Bezos' view is that if you create opportunity for everybody, you too will succeed.

And so I think the creation of Prime, the Prime Day event, and so many other elements of the Amazon infrastructure are all about this culture that Bezos set. And I think as we watch him transition into the Executive Chair role, this is really, to me, the biggest thing that investors should be thinking about. Will Andy Jassy and future management teams over at Amazon keep this kind of culture in place? If they do, it's going to be a very successful company. If they don't, I think it's going to be a very different future for the business.

JULIE HYMAN: Yeah, it will be very, very interesting to watch. Of course, you get that sort of inertia in the early days, right? You get that sort of momentum from his leadership at the company and the culture as it remains. So we'll see how long it takes for them to change things, if they are going to change them, and what that's going to mean for Amazon.

One other note. What's funny to me about the whole Amazon Prime Day phenomenon. It's not on a set day, right? It changes every year at this point. They kind of have it when they want to have it, when they want to get a little juice, I guess? I don't know.