Monday, July 10, 2017

Amazon Prime Day

Black Friday (the day after Thanksgiving) has traditionally been considered to be the biggest retail shopping day of the year.

Amazon seems to be intent on giving Black Friday a run for its money with its Prime Day (July 11). However, it actually begins at 9pm EDT tonight to make it a 30 hour Prime Day.

Prime Day is basically a Cyber-Monday-in-July sale that promises extra savings over and above Amazon's usual discount prices. There are many special deals throughout the day so you are best advised to check back to the site often during the day.

In order to take advantage of Prime Day deals, you must be an Amazon Prime subscriber.

At one time that might have been an obstacle for many American shoppers. That is no longer the case.

79 million American households now have an Amazon Prime membership. It is expected to reach 85 million by year-end.

Let's put that in context. There are only 90 million households that are hooked up to cable tv. Total U.S. households are 125 million. That means about two out of three U.S. households have an Amazon Prime membership today.

Credit: 13D Research

Consider that in 2010 Amazon Prime membership was a mere 10 million households. Two years ago it was about half of what it is today.

The regular cost of a Prime Membership is $99 per year. That means that Amazon is bringing in around $8 billion in revenues just from its membership fees! That pays for a lot of free shipping.

Those memberships also translate into more sales. GeekWire reports that the average Prime members spends $1,300 per year on the Amazon site compared to $700 for non-members.

What effect is this having on retail in the United States?

A lot.

Credit: MKM Partners

And it is sure to get much worse for bricks and mortars retailers.

In particular, it is going to get much, much worse for the owners of the real estate of those retail stores.

There is no place that the risk of owning retail commercial real estate is higher than in the United States. It has more than 3 times the square feet per capita of retail space than countries like the U.K or Japan, 15 times what Germany has and 60 times what China has.

Credit: Zero Hedge

Happy Shopping!

Go here for your Amazon Prime Insider Guide for all you need to know about shopping on Prime Day including how to initiate a 30-day free trial if you are one of the disadvantaged 1/3 of all U.S. households (like me) who does not have a Prime membership.

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