Is Prime Day still worth it?

0:09Melissa Daniels:Hello and welcome to the Modern Retail Podcast, our show that covers the ways the retail industry is changing and modernizing. I'm Special Projects Editor Melissa Daniels. Today's conversation is going to get into the ins and outs of how brands navigate Prime Day, the 11-year-old sales event from Amazon. It's really become a new tentpole sales season event across the ecosystem. You know, it started as a 24-hour event back in 2015. Now it's a four-day sale. Now we've got big summer sales from the likes of Target and Best Buy and Walmart that compete with the event. But as it gets bigger and bigger, we've also heard from some brands here at Modern Retail who are questioning whether they even want to participate.

0:52Melissa Daniels:Some brands aren't that excited about a potential bump in sales because there's so many marketing costs associated with participation, but others still see it as a really big opportunity to get people in their summer spending. Here with me today to unpack all this is Catherine McKee. She's the fractional head of growth at Morphology Consulting, and she's advised on digital go-to-market strategies for more than 50 brands, and she's shepherded companies through many a prime day, through the good, the bad, and the ugly. Catherine, welcome to the show. Thank you so much for having me. It's a pleasure to be here.

1:23Melissa Daniels:I can't wait to get into this with you. It's been a topic that I've talked to casually with sources and companies over the last few weeks. And the attitude is not like super rosy and excited. You know, some people are kind of like, man, Prime Day, we got to figure it out. And, you know, this is the first year they're doing it in June. So the first thing I want to get your take on is just how big of a deal Prime Day is for brands right now, right here in 2026. That's a really fair question because I, as you mentioned, it shifted a lot. I think it used to be a huge deal and over time it has sort of softened.

2:02So across categories, it is a little different, right? I think beauty and wellness are performing incredibly well at Amazon. And so this does feel like a big opportunity for them. There are other categories that are performing maybe less well or flattening. So I think over time by category, it's changed a lot. I think I'm hearing some of the things that you are, that a lot of brands are feeling that it's a lot of work. It's kind of expensive, and they're not sure if the juice is worth the squeeze. So I think from a brand perspective, is Prime Day worth it has a lot of different components in it versus from Amazon's perspective.

2:34Prime Day used to be about getting people to sign up for a Prime account, right? And now that almost everyone on Earth has one, so good job, Amazon. We're in kind of a place where, you know, what is your goal for Prime Day? And I think that has a lot to do with how you view your performance or what you get out of it.

2:48Melissa Daniels:Yeah, I like this notion, too, that for some sectors, it's going to be a great get, for others, might not be so much, even if it once was. Curious what you're hearing about moving this up to June. I talked to some brands who had to do some different logistics and supply chain operations. They had to adjust their forecast a little bit based on what demand looks like in June versus July. But for some companies, it's like a huge get. My colleague Allison Smith interviewed an outdoors brand, for example, that's like, yeah, this is still peak patio furniture time versus July. So they're thinking they're going to outperform.

3:24Yeah, I mean, I think that's amazing. And that is very true. A lot of categories are very seasonally dependent in a way that I think Amazon probably doesn't think about it. They want to be the everything store. They want people in there reading reviews, looking for things, whether or not they purchase all year round. So I think from a brand perspective, if moving it up a month puts you in a much better selling space, that's amazing. And that is true for some categories. I think for the rest of them, it does land on some logistical problems. If we've gotten kind of used to getting your extra shipment in, and so you're shipping it to Amazon storefronts or to Amazon DCs in June for sell-through in July, then that's probably how you timed your boats.

4:03It's how you timed your inventory coming in. It's how you timed your forecasting models. And so moving it up and not really telling people when or where, I think, was a difficult hurdle for people operationally because that does mess up your supply chain. That does make it more difficult. And I think, you know, Amazon sometimes misses those operational things that need to be true for a brand. You can't necessarily pull a ship forward four weeks. You're not necessarily making it go faster. And you don't necessarily want to airship it. I mean, that's going to eat into your margin. So, like, do you want to hit Prime Day now on these days?

4:35Again, maybe. It depends on your category. And maybe not. There's also the other element of July is close to back to school, which is close to PBDD, which is close to T12. So I think for some brands, there's also an element of like this does even it out a little more, like pulling it up into Q2 is better in terms of their margins, in terms of their sales patterns where like the promo times aren't sitting on top of each other. But I will say a lot of people reacted not great in my client set from a, well, this is going to be a scramble to kind of get ready.

5:06Melissa Daniels:Yeah, that's a very diplomatic way to describe what I heard from some brands about their response. I think, too, it was that sort of weight of seeing the news break, hey, it's going to move up to June. And then really waiting for that date to come out felt kind of difficult. You mentioned back to school. I want to stay on that for a second because when you think about people's shopping patterns, I don't know how many parents are quite in back to school mode yet. They're still adjusting to summer camp. Yeah. So I'm not sure if, you know, you're going to see that same like stocking up on sweaters, school supplies.

5:44Melissa Daniels:Maybe it's still the tablets and electronics. I can see that still maybe being strong. Maybe. And I think, too, I'm obviously not working at Amazon, but I think like over the years, seeing the way they've moved their promotional calendar around, the last couple years have been real heavy in the back end. And I think you could see that through sales were flattening. You weren't buying on Prime Day and PBDD and back to school and T12. You were buying your one big thing, like, in whichever one of those you liked. And the rest, like, maybe you participated as a consumer and maybe you didn't. And so I do sort of think if you move Prime Day into June, that does separate out, like, the time periods of when you would buy things, which could make back to school more impactful if they're going to try and make that a bigger deal.

6:27And I do think it separates the categories a little bit. But I do also think as a brand, it would have been nice to have a slightly more firm heads up so you can plan. Because you have to do months of planning, right? To get the product in and get your forecasting right and your pricing right. You need months to set it up correctly.

6:43Melissa Daniels:Right, right. We're going to get into that in a second. But I just want to see if you can define for our uninitiated listeners T12 and PDD. What do you mean by those events? Oh, yes. Sorry, I hate when people do acronyms. So Amazon has what they call high value events. It's a learning opportunity. It's all good. You're right. You're right. I always get somewhere. I'm like, what is she saying? So they have what they call HVEs, which are high value events, and they have four of them a year. The first one is the March big spring sale. The second one is prime day now in June, usually July. PBDD is prime big deal days.

7:17It was basically prime day two. It's the one they put in October. And T12 used to be Black Friday, Cyber Monday, which is two days. And then it was it last year, it was 12 days with a two-week lead and a two-week lead out. So T12, they call Turkey 12 internally, and it's essentially like around Thanksgiving through the first week or two of December.

7:34Melissa Daniels:Right, right, right. Yes, redefining what Black Friday is and how long it goes on and what kind of sales event it is. Thank you for outlining that for us, just to make sure folks are riding along with us. You mentioned forecasts and the decisions that brands have to make around pricing and inventory. And all that feeds into something that I really find fascinating. And that's the overall cost of participating in Prime Day. Because I think, you know, initially, and maybe it felt this way in years past to brands where they knew there was going to be this rush of customers to Amazon, this big opportunity to get in front of new customers or win back loyal customers with a great deal, help them stock up, and it would be this really big boost to business.

8:23Melissa Daniels:But now I think the math has changed for some brands because they are anticipating that level of demand. So curious if you can break down the different buckets of spend that a brand has to do in order to participate in Prime Day. Yeah, absolutely. I think in a vacuum, the first one that you need to know about is just the redemption on the discount. You're paying Amazon whatever the discount is. So if you say it's 25 % off per unit, you're going to get that back on an invoice that you're going to pay them for the redemption of the coupon, so to speak, for the discount. So that is like bare minimum of any promo, you're paying for the promo.

8:58So that's what it has always been. You're welcome customer.

9:01Melissa Daniels:That's the sale. Right, we would love to have you. So we're going to pay ourselves back on some of the price. And like that's, you know, standard promo. The next tier of it, which has been truer more recently, is that to get your fair share of traffic, you're going to have to pay for some of it. So you're going to want to increase your media spend in search and probably display around the time of the event. So a couple weeks before and a couple weeks after. That wasn't a big deal seven, eight years ago. But now that everyone on earth is able to do Prime Day, because that wasn't always true, like Seller Central couldn't do it for a long time.

9:35And everyone can buy media, which also wasn't true. It used to be very specific what you could promote when very aggressive guardrails. Most of that's gone now. So to the victor go the spoils, if you're willing to spend a ton of money, you can buy that traffic. That does behoove a lot of people around Prime Day. So your spend went from just the redemptions into search to get people in, to search and display to get people in. And the cost per click is through the roof. This is an incredibly expensive time to promote because everyone's doing it. So everyone is feeling really firm about the traffic.

10:06You have more traffic also. So bear in mind that the clicks will increase as well as the cost per click. So you do really need to like double slash triple your budget for the month of the promo. So the week of the promo, but then the weeks before and the weeks after are when you want to kind of get that traffic distribution. So really the media costs of what have increased quite a bit in terms of where Amazon's coming from. And I think too, depending on the type of account you have, you may have to pay extra for extra inventory to be held. So Seller Central is like this. You can't go over a certain amount of inventory.

10:36So you would need to buy, pay sort of like the holding fee for that. And I think too in Vendor Central, you needed to buy more inventory. You needed to submit it two-ish months ago to make sure that it was approved. You have to have the floor price built in. And you have to have a rubric for bringing that product back. So you can also be dinged for being out of stock, being low in stock, not shipping on time when they order it. Any kind of operational snafu that comes in. And I think that is often considered a hidden cost of Amazon. that that's the one that drives people crazy. You look at it and you're like, I got it.

11:08I'm paying you 25 % on the redemption and I'm gonna put more media in. But then you're getting these 3 % invoice dings back because you were short a size or you didn't have all of the colors or the microphones that you were selling, you only had half the stock that you thought you had when Amazon decided to stock up for the sale. So there is also an operational element that I think gets quite expensive for brands that brands get a little frustrated by.

11:34Melissa Daniels:Yeah, that's a really, really great breakdown. I want to return to this idea of CPCs really skyrocketing and the effect that that has because I feel like here in 2026, we're already hearing that CPCs are through the roof. So for this to be compounded with the extra demand and rush to spend that brands are making for Prime Day, it cannot be feeling affordable, I imagine. I think you bring up a really good point that the unit economics of what you're selling need to support however you're promoting it. And that is going to get tight. Retail media, you know, God bless it for my job, but retail media has really taken off in the last couple of years.

12:18So budgets are both tighter and they're more focused. And Amazon is very efficient. So people were already allocating a lot of dollars into Amazon that they maybe wouldn't have before. And that makes it more expensive for everyone else, right? If we're bidding and you're like, I'll just increase these bids, then I have to also. So we're moving from things that should be$0.08 a click to like$2 a click. That's an enormous increase. And that's before we get into a sale period. And that's before we increase clicks, right? So like you're making a really good point that budgets are getting squeezed in a maybe kind of unnatural way.

12:50And I think from a brand's perspective, you really need to have that built into your unit economics. You really need to be aware of how much it's going to cost you to turn that unit and if it's worth it or not. And it might be later. Like, you know, the math might not make sense on one unit, but maybe the halo will later. Like there's different ways you can slice it. But I do think that you bring up a really good point that we're getting to a point where it may not be worth it or may not be profitable for you to participate.

13:15Melissa Daniels:Yeah, you mentioned, too, this idea of having to ramp up your marketing a couple weeks before the sales event itself. I mean, I imagine that's because it's ramping up your visibility among shoppers. it's going to help you out in the algorithm as a result of that because hey this is a popular item that people are seeing and clicking on so you know that's sort of the the the snowball effect of the amazon algorithm i suppose um but if i'm the brand who who's selling that you know i have to take that into account in the forecasting and the inventory as as well because some of those eyes are going to turn into conversions, right?

13:56Melissa Daniels:Just kind of curious if you have any anecdotes or examples to share of like why that time before Prime Day is like kind of just as critical as the event itself. Yeah. Amazon's algorithm, which is how they rank products and how they serve the product back, is very similar to Google in a lot of ways. It's are you what the person is looking for? Is your page good? Is it clear? Is it scrappable? Is it indexable? But a really big component of it is also off-site search. So are people Googling your thing randomly without Amazon? Are they just interested in lip gloss right now? Are they interested in a microphone?

14:35Then where would they go? Are they reading reviews? Are they coming into Amazon to do anything? That is critically, crucially important on Amazon. Outside traffic in is crucially important. But what also matters an enormous amount is could they get there once they were on Amazon. So increasing your spend is truthfully sort of a way to fake this out. You want to have a really good organic rank, which is without any spend, did the algorithm, read your page, understand it, and serve you back to the person. That's your organic rank. You can kind of game the system in buying ads for that, which moves people out of sort of the awareness set into the consideration set because they've seen you.

15:14So that will bring more traffic to your page, even if they don't buy. Amazon very much values a person who came to your page, read a review, and left. They want people engaging with the pages even outside of shopping. So if you can prime your page by having more search and usually more display before the event so people are aware, they're looking for your brand specifically, they're looking for your thing specifically, or they've just come to your page, it boosts the page's value because it's increased quality score. Someone came here, they got what they wanted. Even if they didn't buy anything, they got the information they wanted, they saw the pictures, they watched a video, whatever it was.

15:48So it really behooves you prior to the event to increase your spend. One, more people are coming in, right? Like if everyone knows that like it's in June, people are probably adding to basket. They're probably looking through what they might want and they're going to wait and see if your thing goes on sale. If you get that, you land some of those people. Those are very high value targets that Amazon values very much. So you do want to increase spend for the people, but you also want to increase it so the algorithm gets it so that when the event turns on and a million people who have never heard of your brand are like, hmm, maybe I do want tablets for my kids' school.

16:21Maybe I should think about that now. Then they're ready to be like, oh, hey, did you know that Melissa sells tablets? Like, have you seen hers over here? So it does really behoove you to increase that spend so that you're not missing the consideration set or the awareness set of people as they come in, which makes it cheaper when you're getting them to convert later, right? So your cost per click will come down the more valuable your page is.

16:43Melissa Daniels:I feel like that also speaks to why we've seen shop pages and product pages just get so much more multidimensional. And you do have so many more videos. You do have so many more graphics, things that really encourage the viewer to spend time on the page and engage with it. I think that's just become an art in and of itself. And if I was a brand participating in Prime Day, you know, I guess I'd make sure that stuff is really ready to go as soon as Q2 comes around. Like, really make sure it's in great shape. Oh, 100%. And that, we touched on it a little bit earlier, but the amount of time you need to prep for Prime Day is probably triple what people think it is.

17:25Because you do want to get your pages right in January so that they have been ranked for a long time, they're performative, they're doing well by the time you turn spend on in June or July. and you're right. Gone are the days where you could just sort of put your title up and a couple of photos and call it a day. Like it's very important that you're giving good, useful, actionable information to the consumer in all the ways they view it. So in physical copy, in the titles, in the images, in the videos, but also with the rise of all the AI shoppers as well. So like Rufus needs to know what you're talking about.

17:55Outside, Claude needs to know what you're talking about. And I will say that the business I've been in for a long time is sort of talking to brands and getting them to make the pages more informative. And that seems a little unbranded. It seems a little, you know, like you sell expensive skincare. You want the page to be sleek and like no copy and pretty. And you're like, oh no, no, those robots need to be able to read exactly what's happening. You need this page to be, use every character you can to explain it. So even more important with the rise of the various LLMs is that they need the context of everything that you're writing to be able to read it.

18:25And that also is very important to PageRank.

18:29Melissa Daniels:Yeah, I really like this idea you bring up of the way that AI is changing the shopper journey, right? Because it just makes me think about how the motivations of what's bringing people to a page has changed. The way they get there has changed. You know, at the top of the conversation, you mentioned how Prime Day was started as a way to get people to sign up for Prime. That was the motivation. That was where we started. And now it's like, no, you have to really make sure this is a product people want. What are some of the other ways that you're seeing brands use AI to help solve for that? That is a sticky wicket.

19:08I think as like a data person.

19:10Melissa Daniels:Well, some is working, some isn't, right? I think from a brand side, the feeling that you can churn out a lot of content because content's hard. Content is hard to do. It takes forever. It's so many iterations. There's always some tension. Louder for the people in the back. Truly, truly. I mean, you know. You know best. It takes forever. And I, you know, it's a process that I think a lot of brands would love to cut down on. It's also a process where part of the sticking point is that brands love branded content and, sorry brands, consumers hate it. So there's always this tension between like, please stop telling me how beautiful the packaging is on this deodorant.

19:49I just want to know what the ingredients are. Like the only thing that I care about about this deodorant is this thing that the brand considers kind of boring. So with AI, there has been a lot of like, great, we can turn out a million videos. That is great. You do need to control if they're good or not. So like sometimes there's AI slot, but sometimes there's just, I love this beautiful video. We shot a thousand of them and the consumers are like, I don't know what this is. Like, what am I looking at? So similar with when you're looking at copy, when you're looking at titles, I think that's, truthfully, I think that's making it harder for brands right now, that there's a lot of extra work going into churning out a lot of stuff you can't use.

20:26The flip side, though, is that you can use AI to scan your reviews really quickly. That is a huge, huge, huge important part of synthesizing data. What did the customers tell you in customer service logs? What did they tell you on your ratings and reviews? What did they say on competitors' rating and reviews? And what were the key components and takeaways? That helps a ton in solving for a customer journey. I think similarly with things like promotions and price changes. You get a much better idea much faster of what the market price is for any kind of good. And I think that has been phenomenal for brands.