Amazon uses special sale to lure people to Prime

Amazon is marking its 20th anniversary Thursday with a sale that features more deals than the online retail giant says it offers on Black Friday.

But the sale items available today will only go to people who join Amazon Prime. Analysts see the sale as yet another attempt by Amazon to take business from merchants like Walmart, Best Buy and Target.

Dan Thiede, an Amazon Prime member who lives in Minneapolis, has been inundated with Amazon's promotions of the big Prime Day event. But they haven't lit a fire under him.

"I got to say I haven't paid it a whole of attention because there's nothing I particularly need right now," Thiede said. "But if I did I might go check it out."

Amazon is doing its best to make sure lots of new, existing and lapsed customers check out the Prime service. The company is offering Prime benefits free for one month to non-members. That will give those people access to deals that Amazon hopes will lock them up as long-term customers. Amazon plans to offer thousands of bargains, including deep price cuts on everything from TVs and computers to clothing and baby wipes.

R.J. Hottovy, an e-commerce analyst with Morningstar, said the sale is an important effort to promote the Amazon brand and the value of the retailer's Prime membership.

"That's critical to the company's longer-term margin potential: locking in these Prime customers, keeping them engaged and happy," Hottovy said. "And this is certainly a step in the right direction toward that goal."

For $99 a year, Prime subscribers receive two-day free shipping, access to online videos, music and books and other benefits.

Hottovy said Amazon's latest move will pressure Best Buy, Target and other retailers to offer more attractive prices, selection and delivery times.

"Right now, Amazon, roughly 40 percent of the U.S. population are active users," he said. "Amazon is giving consumers what they want and forcing other retailers to step up their game."

But retail consultant Carol Spieckerman said Walmart has managed to kind of hijack the Amazon event by responding with aggressive price cuts of its own — and pointedly saying customers don't have to pay a $99 fee to get those deals.

"It's being portrayed as Walmart taking a me-too jab at Amazon," Spieckerman said. "But to me what Walmart is doing is even smarter and that is they're leveraging all the publicity, all the buzz around Amazon Prime program and Prime Day to draw attention to their own value proposition that isn't attached to any fees."

Best Buy and Target did not reveal any plans on Tuesday, but Spieckerman expects the retailers to respond.

"Of course, you've got to believe that they're both looking at this very closely," she said, "and thinking, 'How are we going to do something similar. That doesn't look like a me-too. That looks original and looks really compelling to our specific shopper base.'"

If Amazon inspires consumers to shop, other retailers likely will benefit too, as consumers look for the best deals online.

"Whenever there is a sale and there is anticipation of a lot of people coming online at one time to go shopping, merchants are just smart to ride those coattails and take advantage of consumers who are in the mindset of purchasing," said Sucharita Mulpuru, an e-commerce analyst for Forester Research.

On Tuesday, Best Buy had a Tuesday Tech online-only sale, with free shipping. The Best Buy website proclaimed, "Deals for all. No membership needed."

Target's website, as usual, touted a wide array of sale items, offering everyone free shipping and returns for orders of $25 or more. For Target RedCard holders, shipping is always free.

Some observers suspect that Amazon is trying to create a new shopping event.

But Mulpuru sees nothing so grand. Instead, she thinks the company is essentially having an anniversary sale in an effort to drum up sales during the usual summer doldrums.

"I think that no matter what time of year their birthday would have been, we would have seen an activity like this," she said. "And it happens that that fell in July. That's really what it's about."

Mulpuru doubts Prime Day will come close to matching Black Friday sales.

Amazon's attempt to stir up sales comes at a challenging time. U.S. consumers cut back their spending at stores and restaurants last month, a sign that they remain cautious despite robust job growth in the past year.

Amazon has been a big driver in the rise of retail sales via the Internet. Online sales have more than doubled in the past decade.

In the first quarter of this year, e-commerce sales accounted for 7 percent of total U.S. retail sales, according to the U.S. Department of Commerce.

But Amazon's success has not consistently fallen to its bottom line. Last year, the company posted a net loss of $241 million on sales of about $89 billion.

Target stores, but not its website, will match prices offered by Amazon, Best Buy and Walmart.

Best Buy will match the prices of Amazon and some other online and brick-and-mortar competitors.

The Associated Press Contributed to this report.