Analysts: Amazon Prime Day a factor in stagnant July retail sales

Dive Brief:

Several analysts contend that Amazon’s blockbuster Prime Day event may have led to unexpectedly flat retail sales in July, CNBC reports.
July retail sales measured by the U.S. Commerce Department edged down 0.3% excluding auto sales are excluded (and down 0.1% excluding auto plus fuel sales), in contrast to the 0.5% rise expected by analysts. Meanwhile, July 12's Prime Day sale eclipsed last year’s first Prime Day by more than 60% worldwide and more than 50% in the U.S.
Analysts including CNBC’s Patti Domm believe that Prime Day could have dinged competitors' results. Retail Metrics’ Ken Perkins, for example, noted that Amazon “being acutely aware of the summer doldrums, very astutely created a reason to spend last year” and doubled down on this year's event, capturing dollars at a time when consumers are otherwise occupied by going to the beach or on vacation.

Dive Insight:

Retail sales are notoriously volatile and therefore at the mercy of all kinds of forces, including forces as diverse as weather and tradition. For example, tradition stipulates that shoppers buy at the holidays, but icy streets can impede that. And tradition stipulates that in the dog days of summer, consumers head to the beach, but the enticements provided by Amazon’s Prime Day apparently can make them take out their credit cards instead.

Sussing out which forces take what toll on retail is a difficult task. In an increasingly global retail environment, it’s getting harder to fathom which forces will prevail upon consumers. Meanwhile, though the U.S. economy is technically on an upswing, it has yet to provide full relief to lower-income households, which remain wary of their long-term prospects, or whose wage gains still haven’t caught up to the increases in their expenses.

Even so, there’s intriguing evidence that Amazon’s Prime Day was indeed a factor in this July’s tepid retail sales report. Fortune’s David Z. Morris adds that not only did the U.S. government measure non-store retail sales (e-commerce) rising 1.3% from June and 14.1% from July 2015, but that “brick-and-mortar categories that suffered most in July were apparel, electronics, and general merchandise, categories where Amazon is an attractive option.”

The question remains: Will Amazon, like China’s Singles Day (an event concocted by Alibaba that now benefits other e-retailers there as well) ultimately forge a new tradition that, like Black Friday, boosts retail in general?

Though that perhaps would be the best outcome, the answer is 'Maybe, maybe not.' As Fortune notes, there were some spending categories, like restaurant spending, that also suffered in July, and Amazon wouldn’t have been able to impact that statistic. What is clear these days is that the consumer is a finicky beast, and still something of an enigma, at least for now.