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Amazon Prime Day will put its one-day delivery promise to the test in event that could break records – CNBC


All eyes are on Amazon as its annual Prime Day begins in just three days, testing its promise to provide one-day shipping for more than 10 million products on what may be a record-breaking sales event.

Last month, the company began rolling out free one-day delivery to Prime members, and those goals will be stress-tested during an event that is expected to generate between $5 billion and $6 billion in gross merchandise value, according to an analyst at Bank of America. 

“Prime Day may act as an important test of Amazon’s expanding Free Prime One-Day Delivery capabilities (which is now available on more than ten million products nationwide,)” said Bank of America analyst Justin Post in a note to clients on Thursday.

Sucharita Kodali, an analyst at market research company Forrester, also said that Amazon will be using this day to see if its distribution centers can execute deliveries, especially when orders ramp up during the holiday season this winter.

“For them to be able to deliver the volume of transactions, it will likely be hundreds of millions, in a short compressed period of time,” she said on CNBC’s “Squawk Box. ” “This really is about giving them practice for doing this later in the year.”

This year’s Prime “Day” will actually be two days long. The event will last a full 48 hours, the longest since it began the mid-summer sales event in 2015 to celebrate its 20th anniversary.

Shoppers will be able to browse “over one million” deals starting 3 a.m. ET on July 15 and continuing until 2:59 a.m. ET on Tuesday, July 16. But shoppers should expect to see Amazon using the event as an opportunity to promote its own properties, including its electronic devices, private-label products and Amazon-owned Whole Foods. 

Consumers can pick up a Toshiba Fire TV for $179.99, a Ring Video doorbell for $169 or  a Fire TV DVR for $129.99. Prime members who shop at Whole Foods will get a $10 Amazon.com credit after spending $10. The company’s private labels such as AmazonBasics, modern furniture label Stone & Beam, and its apparel labels were top-selling brands last year, and will also see deep discounts.

The event might also be a way that Amazon manages to push consumers into signing up for its Prime membership, since only members will receive discounts.

“Prime Day remains a strong branding event that can also drive strong Prime subscriber additions and device sales, ultimately increasing customer lock for Alexa and Prime,” Post said.

The event will not only be a holiday for Amazon. Competing retailers such as Walmart and Target are also using the opportunity to offer its own deal strategies. Target is offering a two-day sale in tandem with Prime Day — and is advertising the fact that no membership is required. Walmart’s “Google Week,” which began on July 8, has been offering savings on Google products including the Nest Hub, Google Home Mini, and Google Home Smart Speaker for almost 50% off. And shoppers can find discounts on electronics such as LG, Samsung, and Apple during eBay’s “Crash Day.”

The approach has proven successful. Last year, Target logged its “biggest online shopping day” during its one-day sale in tandem with Prime Day.

According to Adobe Analytics, U.S. retailers could see sales surge 79% compared to the average Monday and Tuesday in July. Last year, average sales grew 54% on Prime Day compared to the average Tuesday in July.

But recent news that Amazon workers in Minnesota are planning a protest during the event could detract from its sales. Workers say that even though the company is promoting faster delivery options, it isn’t giving its workers enough credit, and are not acknowledging the religious practices of East African Muslim workers.

Some consumers have said they are planning to boycott the company on Prime Day, in a stance against crossing the digital picket line.

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