Here's How Much Money Amazon Will Make on Black Friday
It's one of the company's busiest days.
Amazon is the undisputed ruler of e-commerce. The site is all but synonymous with online shopping, and chances are good that many gifts exchanged during the winter holidays will have shipped in one of the company’s brown boxes. Given the general frenzy around buying things during Thanksgiving weekend, most of those gifts probably will be purchased over the next couple of days.
In fact, they might as well rename it the Holiday Shopping Extravaganza with a Big Meal Beforehand. Adobe reported in 2015 that more than $11.1 billion was spent between Thanksgiving and Cyber Monday. That was a 17 percent year-over-year increase, and if the trend continues, 2016 could be another record-breaking year for retailers that embrace the madness.
Amazon is prepared. The company announced last year that the weekend is its busiest time of year, and while Black Friday isn’t quite as frantic as Cyber Monday, many people will still be shopping online throughout the day. The question is how much Amazon will make from all those discount-seekers.
Slice Intelligence — an e-commerce tracking firm that collects data from receipts linked to its Slice app — analyzes emailed receipts to learn more about shopping trends. It revealed a few interesting tidbits in 2015: that Amazon accounted for 36 percent of online Black Friday sales; that the average spend was around $48; and that 80 million people shopped online throughout the holiday season.
There are some arguments over Black Friday’s relevance. Retail analytics outfit ShopperTrak anticipated a 2.4 percent growth in Black Friday Weekend shopping in 2015, but the $10.21 billion in sales represented an 11.9 percent decrease from 2014. This could be caused by shopping online instead of in-store, but it might also show that Black Friday is waning.
Amazon’s own data shows that Black Friday isn’t as big a deal as it used to be. Prime Day, the company’s one-day sale exclusively for Prime members, was even busier than Black Friday despite technical hiccups and lackluster sales in both 2015 and 2016.
The data might as well be in one of Amazon’s brown boxes. Some have said that Black Friday is up; others have merely lumped Cyber Monday into Black Friday to give the latter more relevance. Amazon is also notoriously tight-lipped, so while it’s happy to brag about record-breaking sales days, it’s not going to reveal exactly how much money it made from all those purchases.
Yet we can still take a stab at it. If the company gets similar results as last year, using the averages provided by Slice means Amazon could make around $1.4 billion on Black Friday. But if the company’s popularity bucks the Black Friday trend, like it did last year, it could make even more.
So let’s say that Amazon grows by around 20 percent, just like it did in 2015. Applying that to Slice’s data could mean the company will make around $1.66 billion on Black Friday. That’s about a tenth of what Adobe reported last year, but it’s worth pointing out that Amazon is likely to make even more money on Cyber Monday, so its share of the market is probably even larger than that.
No matter what the exact figure is, it’s clear that Amazon has become a significant force in holiday shopping. If you notice an inordinate amount of packages held together by tape advertising Amazon Prime arriving throughout the winter months, well, you’ll know why. Whether those items are ordered on Thanksgiving, Black Friday, or Cyber Monday won’t really matter to Amazon.