Amazon's Prime Day discounts are bigger – because everybody's poorer now
Frederic J. Brown/AFP via Getty Images
- Amazon is offering its deepest discounts in years this Prime Day.
- It's trying to coax customers into spending more during its 48-hour shopping extravaganza.
- Inflation and high interest rates have made nearly everyone in the US poorer over the past year.
Amazon is slashing prices even more than usual this Prime Day.
From basic necessities to high-end tech, the online retailer is offering its steepest discounts in years, research by CFRA shows.
The reason? It knows it'll have to work harder than ever before to persuade customers to spend.
Tuesday's 48-hour shopping extravaganza comes in the middle of a difficult period for the economy, with most Americans probably feeling much poorer than they did last July.
(Although not Jeff Bezos, who's seen his personal fortune balloon by $44 billion over the past year thanks to Amazon's soaring share price).
Inflation has run way clear of policymakers' 2% target over the past year, with basic necessities like food, gas, and toiletries becoming far more expensive.
The Federal Reserve responded by aggressively raising interest rates, and while soaring prices have finally started to cool, their tightening campaign has pushed up mortgage and credit card repayment rates.
Red-hot inflation and higher borrowing costs have combined to hammer shoppers' wallets – and that explains why Amazon is offering so many discounts this year, according to Bank of America.
"Multiple retailers, including Amazon, have noted consumers are more cost-conscious in 2023," analysts said in a research note Tuesday, pointing out that the e-commerce giant is offering 60% off Gap clothing, 50% off Sony headphones, and 40% off Peloton Bikes.
If all that economic doom and gloom wasn't too off-putting, check out our list of the best 2023 Prime Day deals.