Amazon’s Prime Day Was Good, But Not Good Enough

tech.hindustantimes.com:

For years now, Amazon.com Inc.'s seminal Prime Day has turned historically slow July spending into a Black Friday-esque sales event. But this year sales fell short of forecasts, which says more about Amazon than the state of consumers. This year's event, actually spread over July 11 and 12, set another sales record at $12.7 billion. That's about 6% more than last year but less than the 9.5% gain forecast by the Adobe Digital Economic Index, which expected steep discounts would drive higher demand. So what gives?

One read is that elevated levels of inflation are curbing demand at the same time shoppers are hearing about economists assigning a 65% chance of a recession over the next year. However, about 40% of Amazon shoppers earn more than $100,000 a year, compared with the $73,500 median household income of a Walmart Inc. shopper, and are less likely to be as sensitive to inflation. But then again, inflation has cooled, slowing for 12 months, going from 9.1% to 3%.

Perhaps a better read is that this year's results expose Amazon's struggle to become not just a great delivery company but a great retailer. The struggle is more urgent than ever as Amazon's cloud computing business suffers from a demand slowdown of its own. Although the company's shares are up 60% this year, they are down 28% since peaking in July 2021 while the S&P 500 Index has gained almost 5%. Analysts have steadily lowered their 12-month price targets for the company's stock, from an average of around $200 early last year to a current $144, according to data compiled by Bloomberg. The shares closed at $134.30 on Thursday.

The signs leading into Prime Day all pointed toward Amazon flexing its tech muscle to spur spending. It ramped up how it uses artificial