RANCHO CUCAMONGA, Calf. – Saying it is a reflection of the broader slowdown in consumer spending nationally, Amazon Prime Day stimulated only a small uptick in spending on credit union-issued cards for online purchases over the two-day shopping holiday, according to Co-op Solutions.
In fact, Co-op Solutions said the number of debit transactions made on Amazon was actually down .05% on the first day of Amazon Prime Day, and up just .62% on Day two (July 12-13, 2022, compared to June 20-21, 2021), the company said.
“Past year-over-year increases in Amazon Prime Day debit purchases within the Co-op portfolio have been as high as 271%,” the company said. “That result was experienced in 2020 when COVID stimulus funds and pre-holiday timing sparked unprecedented volume.”
Co-op noted 2020’s Amazon Prime Day also took place on Oct. 13-14 versus the more typical summer months.
“In terms of purchase amounts, Prime Day online shopping sales figures are less impressive when you consider inflation’s influence on the value of today’s dollar,” said Beth Phillips, director of strategic portfolio growth. “Co-op’s transaction data shows disproportionate growth in money spent online versus goods purchased online during the two-day event.”
Inflation’s Impact
In releasing its analysis, Co-op said common household and food purchases, especially, are “significantly more expensive” than a year ago. June 2022’s Consumer Price Index inflation report showed the biggest yearly increase in prices since November 1981, according to Co-op.
“Higher prices may also explain the return to credit card spending seen within Co-op transaction data,” the company said. “Prime Day credit purchases showed gains of 12.97% and 14.12% on Day 1 and Day 2, respectively. At the same time, dollars spent rose 17% and 25% on Days 1 and 2.”
Added Phillips, “Credit outperformed debit during the 2022 Amazon Prime Day, by more than double on each day. This marks a comeback of credit as the payment method of choice over last year’s declines. This is not surprising, as we’re seeing credit outperform debit in most categories recently, particularly with online and more costly purchases. Now is the time for credit unions to lean in on their cardholder experiences strategies to capture more of the rebounding volume.”
Possible E-Commerce Burnout?
Co-op said that while inflation seems to have affected online spending, “e-commerce burnout” is another possible trend. A June 2022 survey of 2,000 working-age consumers found 25% spent less money online in the last six months than they did in comparable periods during the pandemic. According to data from Salesforce, global online sales for non-Amazon sites during this year’s Prime Day were down 12% compared to Prime Day 2021. Co-op transaction data, too, shows only slight gains in non-Amazon online purchases, at just 2.25% and 6.82% across Day 1 and Day 2 of the shopping event.
Stitching Things Together
“Since the pandemic, we’ve seen consumers get even more comfortable stitching together fintechs and mainstream financial institutions to curate their own mix of financial services,” said Phillips. “The same appears to be true when it comes to their shopping, which requires some creativity now to stick within a budget. Regardless of where the transaction is happening – be it on Amazon, another marketplace site or e-tailer, on the phone, between friends or over the counter – members expect it to be safe, smooth and seamlessly connected to their overall financial picture.”
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