The following is an excerpt from Emily Bary | July 10, 2017 | Barrons.com |
Amazon shoppers are excited about the company’s upcoming Prime Day sale, but perhaps it’s investors who should be celebrating.
In a note Monday, Guggenheim analyst Robert Drbul argues that Prime Day has historically been a good way for Amazon.com to drive purchases “in an otherwise relatively quiet period for retail,” test out its ability to process large order volumes before the holidays, and attract new sellers and Prime members. He predicts this year's event could “once again yield impressive returns for the Amazon platform/ecosystem.”
Amazon, which doesn’t disclose its Prime membership count, said it picked up “hundreds of thousands” of new members after its 2015 Prime Day event, and Drbul estimates that the company saw similar results last year. For Amazon, attracting new Prime members goes beyond collecting the $99 annual fee, since subscribers tend to spend more on the site and engage more with Amazon’s ecosystem of services.
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