This New York Times article has an Amazon focus, but much of what I am going to write about can be applied to any retailer.
Some points from the articles:
Brands are backing off or stopping their Amazon ads entirely.
Amazon is worried about prime day inventory availability.
Some brands may be forced to raise prices.
As I write this no one knows what will happen with the coronavirus. But let’s play out a scenario where things get back to normal in 2 to 3 months.
Prime Day will only be for closeouts of slow moving inventory of non-essentials. Brands that might normally give a great deal (meaning give customers their margin with Amazon’s encouragement) won’t have the inventory to do a deal. They may even raise prices. Under this scenario they’ll lose sales from bargain hunters, but the people that really want the product will pay a higher price. I believe these companies will make more money than they would have guessed due to higher margins and less promotional spending. So then the question for these merchants is do they go back to the old way or do they try to maintain higher margins? It’s amazing the number of businesses that are run without really analyzing differing scenarios, so the coronavirus will provide a forced differing scenario.