Amazon Prime Day is the kick-off to the Black Friday and holiday season: Dana Telsey

Dana Telsey, CEO and Chief Research Officer at Telsey Advisory, joins Worldwide Exchange with what to expect on the start of Amazon Prime Day, and what the day means for the broader retail sector. Subscribe to CNBC PRO for access to investor and analyst insights on Amazon and more: https://cnb.cx/3dIH56N

For retailers looking to compete with Amazon around its annual Prime Day event, it’s not all about offering deep discounts to catch customers’ attention on the internet.

Start-ups like Warby Parker, Allbirds, Outdoor Voices and Everlane rarely offer promotions. Many of these companies have built their businesses online around a playbook that essentially says: We will never go on sale.

“As a brand, we don’t have sales,” said Brian Berger, CEO of the direct-to-consumer men’s sweatpants maker Mack Weldon. “We have a permanent loyalty program. ... And that gets us out of the cycle of having to think about promotions and retraining customers in a way we wouldn’t want them to behave. We want them to shop whenever they want.”

Instead, around Prime Day and through this holiday season, Berger said, Mack Weldon will be boosting its marketing efforts, especially on social media. The brand launched its first-ever television campaign in June, which it continues to run. Its sweatpants have surged in popularity during the pandemic, with consumers looking for comfortable clothing. At one point early on during the Covid-19 crisis, Mack Weldon was selling 1,000 pairs of sweatpants per day, Berger said.

“During the holidays, you have to break through the noise and have a great offer in the market,” Berger said. “And there are other ways to break through the noise,” besides being promotional, he said.

Men’s activewear brand Vuori also launched its first-ever TV ad campaign on Monday.

‘Transcend dealbuster culture’

According to Harley Finkelstein, president of Shopify, the e-commerce platform for many direct-to-consumer brands including sneaker maker Allbirds, “deals are just one of the things shoppers are paying attention to” during the holidays.

“This is the year that purchases with purpose will transcend dealbuster culture,” he said. “More so than in any other year, consumers will vote with their wallets for merchants that align with their values — choosing to support Black-owned businesses, local merchants, and socially and environmentally conscious brands.”

Cookware brand Abbio won’t be on sale, either, during Prime Day.

“One of the advantages of having a strong direct channel is we don’t need to compete with Amazon on Prime Day,” said Jonathan Wahl, Abbio co-founder and CEO. “It’s a different customer and a different business strategy altogether.”

Prime Day is “all about the ‘deal’ as opposed to the value of the brand or the offering,” Wahl said.

Still, some brands might be choosing to break from the unofficial direct-to-consumer playbook. Some already have — in a bid to try to move inventory piled high in stock rooms and coax consumers to spend a little extra during the global health crisis.

Last month, luggage brand Away held its first sale in its roughly five-year history, promising deals of up to 50% off its bags — some of which retail for more than $400.

In the thick of the coronavirus pandemic, Away said the sale, which was held both online and in its stores, outpaced the brand’s performance during every prior Black Friday and Cyber Monday combined, exceeding even its “most aggressive expectations.” Some customers reported website outages because of the heightened traffic around the event, while others later reported their shipments were delayed. They took to the company’s official Twitter account to complain.

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