What: Amazon's Prime Day 2025 implements strategic shift with deeper discounts on select items, reducing promotional breadth from 40% to 14% while increasing average discount depth from 24% to 32%.

Why it is important: The transformation of Prime Day's promotional approach reflects a broader industry trend toward more precise, margin-aware discounting strategies, moving away from broad-based promotions to maintain profitability while meeting consumer value expectations.

Impact Analytics' analysis of Prime Day 2025 reveals a significant shift in Amazon's promotional strategy. The company reduced the breadth of discounted items by 24 percentage points while increasing the average discount depth by 4 points, focusing on maximising impact through targeted promotions. The clothing, jewellery, and shoes categories saw the most substantial increases, with discounts rising from 27% to 36%. Beauty and personal care experienced moderate growth, with discounts increasing from 22% to 30%, reflecting a selective approach to top-performing SKUs. This strategic evolution demonstrates Amazon's move toward a more deliberate and focused promotional model, particularly evident in its volume-oriented but margin-aware approach to categories like skin care and self-care products. The company's decision to concentrate deeper discounts on fewer items suggests a sophisticated understanding of category dynamics and consumer behaviour in the current retail environment.

IADS Notes: Amazon's shift in Prime Day strategy reflects broader market dynamics observed throughout 2024-2025. As reported in March 2025, the implementation of significant tariffs on direct-from-China shipments fundamentally altered the competitive landscape, with packages under USD 800 facing tariffs of 120%. This regulatory change, coupled with April 2025's data showing Chinese platforms reducing advertising spend, created an opportunity for Amazon to refine its promotional approach. The company's decision to offer deeper discounts on fewer items aligns with its successful "Haul" platform strategy launched in November 2024, which demonstrated how established retailers could compete effectively in the value segment while maintaining profitability. The focus on categories like clothing and shoes, which saw 9 percentage point increases in discount depth, reflects Amazon's strategic response to changing consumer behaviour amid persistent inflation and cost-of-living pressures.

Amazon Prime Day 2025 strategy: from broad to targeted discounts