Margin Points - Arnold Engel<br>Prime Day is Restaurant Week<br>Amazon sets the table for others<br>June 23, 2026 · [Essay 93]<br>Amazon’s Prime Day kicks off today. At this point, it’s Restaurant Week for the U.S. consumer. There are enough good customers in the mix now that it’s a valuable effort for everyone in the industry to join in.
Prime Day is now a misnomer. Originally inspired by Alibaba’s Singles Day, Prime Day was initially a single day and an Amazon-only promotion. With initial success, the competition—Walmart, Target, Best Buy—responded with their own events during the same week. Now Prime Day is several days (June 23-26 this year) and Walmart has front-run with a sale of their own that started yesterday and runs for the whole week.
In terms of discounts: Amazon is at 50%, Target is at 40%, Walmart is at 50%, Best Buy seems mainly around 30%. Good luck actually figuring these discounts out. Many of those percentages aren’t reliable as the retailers can pump the price at some point in the past few months and then show the discount off of the inflated price rather than the normal one. I think people have caught on to this, whether they know it explicitly or not, and are somewhat skeptical going in. In Europe, retailers face fines for showing a percentage off of an artificially inflated price.
This skepticism reinforces the value for Prime Day. “We are all doing our best summer sales this week” is an easy consumer message to digest. Everyone is doing it. You should shop now. Simple. Every competitor that jumps in reinforces the message. It’s basically Christmas in July June.1 This keep it simple marketing is what works for Restaurant Week. “It’s a good week to go to a nice restaurant” is very understandable.
There is easier comparison as a result of all the sales happening simultaneously. Had Target gone last week with a mega-sale, they wouldn’t convert as highly as non-urgent purchases sit in the shopping cart while you wonder if Amazon will have a better deal for you next week. Or you buy the thing and keep it in the packaging for easy returning when you see it as a better deal on Amazon.
This all helps to explain why the week is the week. As a competitor, if you go it alone you run a bigger risk of attracting lemons who are pure price shoppers. During Prime week, you have a mix of all sorts of shoppers that get pulled in. Media helps with this as the top-of-funnel for the week is pretty enormous. In game theory, the sale week happens naturally and competitors coalesce around a Schelling point.
The internet being on sale all at once has some mental overhead benefits. It allows for a moment of consideration to take into account more information at once. Here is the best that everyone is currently putting out. We are conditioned to evaluate things at the same time and it helps buyers convert at a higher rate. You know the 50% off strikethrough is off a number that existed for about 30 seconds on the site at 4:02am, 29 days ago. You put the thing in your cart anyway. You quickly glance at another site, a touch more expensive. You don’t feel fooled. You do feel like being done with this already and this is the designated time for you to buy. You are skeptical and buying all in the same moment. This week has been designed to help you overcome all that and the design is working.
Adobe, who monitors these events on the internet, is estimating a 9% increase in spending on Prime Day over last year’s event. The strategy is working for the retailers. Not equally well as they all have different margin structures and expected gross profit on that increased spending. We may know in a few months how much of Prime Day this year was just demand pulled forward, compared to completely new demand. That there is talk about buying back-to-school stuff in June makes me think that demand pulled forward is a big driver here and we’re just shifting things that would have been bought at Target or Walmart in August now to a June online sale week. All that would still help Amazon, who wins the most now having the brand name associated with a major shopping week.
The first few years of Prime Day were a novelty. That’s gone. Now it’s an institutionalized lemons management program from industry coupled with every-trick-in-the-book efforts to drive sales. Prime Day isn’t about the individual sales anymore. It’s about the retail calendar organizing to minimize returns and goose sales. It has stretched to 4 days from the original 24-hour event in 2015. Don’t be surprised when you learn that Restaurant Week is usually at least two weeks long. These things typically don’t get shorter.
Even small brands hop on to support the week. Ten Little, the independent kids’ shoe brand, emailed announcing a sale on their site today. Everyone is getting in on the action. This is natural and helps the smaller brands avoid pure price-seeking behavior as the pure price-seekers are finding other stuff cheaper on Amazon/Walmart right now instead....