NEW YORK — Amazon’s Prime Day 2025 marked a notable departure from previous years, with fewer SKUs on promotion but significantly deeper discounts, according to a new report from Impact Analytics. The annual analysis sheds light on how the world’s largest online retailer is recalibrating its promotional strategy to prioritize precision, margin protection, and targeted inventory movement in a challenging retail landscape.
The report, “Deeper Discounts, Fewer SKUs: How Amazon Got More with Less,” highlights that only 14% of SKUs were discounted during Prime Day 2025, down from 38% in 2024—a steep 24-point decline in promotional breadth. Yet, the average discount depth increased by 8 percentage points, signaling Amazon’s pivot toward high-impact promotions that align with consumer demand patterns while safeguarding margins.
“This year, Amazon traded promotional volume for precision—fewer SKUs were discounted, but the discounts ran deeper,” said Prashant Agrawal, CEO and Founder of Impact Analytics. “It’s a clear signal to the market: retailers must get sharper, more surgical, and margin-aware in the way they approach promotions.”
Category Leaders and Shifts in Strategy
The analysis, which examined the top 1,000 SKUs across 13 major categories, found that Electronics led with an average discount of 38%, maintaining its position as the Prime Day hero category. Meanwhile, Pet Supplies and Tools & Home Improvement categories recorded the largest increases in discount depth, each rising by 11 percentage points compared to the pre-Prime Day period, illustrating how Amazon is making category-specific decisions driven by demand elasticity, inventory risk, and consumer urgency.
Rather than broad, unfocused discounting, Amazon’s approach targeted promotions based on real-time data, leveraging machine learning-driven demand forecasts and inventory exposure analysis to prioritize which products received deeper markdowns. This strategic precision allowed Amazon to address overstock in key categories while avoiding widespread margin erosion.
Responding to Macro Pressures
The report also links Amazon’s evolving promotional strategy to broader macroeconomic challenges affecting the retail industry in 2025, including tariff uncertainties, cautious consumer sentiment, and tighter inventory management across categories. As inflationary pressures continue to weigh on household budgets, consumers are becoming more selective, focusing their spending on high-value opportunities, and driving retailers to respond with intentional, data-backed discounting.
“Prime Day this year wasn’t about doing more—it was about doing better,” said Agrawal. “Retailers who approach pricing strategy with precision will reap bottom-line benefits.”
Implications for Retailers
For retail leaders, the Prime Day 2025 findings underscore a significant shift in how promotions should be approached going forward. The days of blanket discounts and mass promotional campaigns may be giving way to data-driven, category-level discounting that aligns with inventory goals and evolving shopper behavior.
Impact Analytics advises retailers to leverage advanced analytics and machine learning models to evaluate promotional effectiveness, identify demand patterns, and optimize discount strategies for different product segments, ensuring that each promotion aligns with overarching business goals.
“Consumers are clear about what they want: value without compromise. The retailers who can meet that demand through smarter promotions, rather than broader ones, will be the winners in the next phase of retail,” said Agrawal.
Access the Full Report
Retailers looking to understand how Amazon’s evolving Prime Day playbook can inform their promotional strategies can access the full Impact Analytics report here.
