By Sarah Nassauer, Laura Stevens and Paul Ziobro
Traditional retailers are pulling out all the stops to attract
last-minute holiday shoppers in the final days before Christmas,
even as Amazon.com Inc. steps up its own efforts to appeal to
procrastinators.
As the deadline to receive packages before Christmas passed for
most online orders, retailers with physical stores aimed to make
the most of a rare window of advantage over e-commerce players.
Many are pushing deeper discounts, restocking popular products
and offering in-store pickup for online orders through Christmas
Eve, aiming to make up for any ground lost to Amazon earlier in the
season. It marks a final, high-stakes push for holiday shopping
dollars, which account for around 20% of the retail industry's
annual sales.
Macy's Inc. and Kohl's Corp. will keep their stores open
round-the-clock through Christmas Eve and are offering a raft of
last-minute promotions. Wal-Mart Stores Inc. sped up shipments of
Legos, Barbies and My Little Pony dolls to get them in stores this
week. Some chains, including Best Buy Co., are offering large-scale
same-day delivery on Christmas Eve for the first time.
For its part, Amazon said its Prime Now service, which delivers
in as little as an hour, will take orders as late as 9:45 p.m. on
Christmas Eve in some markets. Deliveries will take place until
midnight.
"This is a unique year because Christmas is falling on Sunday,
which makes it more difficult to do all of that last-minute online
shopping," said Stephenie Landry, vice president of Prime Now.
Amazon's quick-delivery service aims to fill in the gap.
Toys "R" Us Inc. increased toy inventory held in stores versus
last year through the final shopping days and is keeping stores
open continuously from 6 a.m. Friday through 9 p.m. Saturday.
"There is a point where people stop ordering online," for home
delivery, Toys "R" Us Chief Executive David Brandon said on
Tuesday. "When that happens, the last-minute shoppers flood into
the stores and it becomes a function of who has the inventory and
who has the best shopping experience."
The last week before Christmas could give brick-and-mortar
retailers a needed boost after consumers' preference for online
shopping accelerated this holiday season, giving more business to
Amazon. At the same time lower prices from discounts and deflation
ate into sales.
In October, the National Retail Federation forecast that
Americans would spend $655.8 billion in November and December, or a
3.6% increase from a year ago. However, in dollar terms, retail
sales slowed slightly versus last year in the weeks between
Thanksgiving and Christmas, according to data from NPD Group, a
market research firm.
"This year's trend clearly demonstrates how extreme promotions,
now most noticeable in toys and electronics, are steering retail
off the path of growth," said Marshal Cohen, NPD's chief industry
analyst. "Even though we are lagging behind so far, don't be
surprised if that last week pulls in a lot of business," for
brick-and-mortar retailers.
Standing in the baby aisle at a Barnes & Noble store in
Wesley Chapel, Fla., Susan Loper was holding three educational toys
in her hands and deciding which to buy for her grandsons.
The 70-year-old said she started her Christmas shopping four
months ago but realized she wasn't quite finished after assessing
her inventory. "I like to buy the same number of gifts for each of
them," she said. "So here I am."
The level of promotional activity, especially among apparel
retailers, ticked up the weekend before Christmas, according to
Simeon Siegel, a Nomura Instinet analyst. Of the 21 retailers he
follows, nine offered deeper discounts compared with the same
weekend, known as "Super Saturday," a year ago.
Under Armour Inc. offered 40% discounts on hooded sweatshirts,
compared with 25% a year ago, according to Mr. Simeon, while Kate
Spade & Co. advertised an extra 30% off sale merchandise,
compared with 25% last year.
Many retailers trimmed their inventories this holiday season
after a glut last year forced them to offer deep discounts.
To prepare for battle with Amazon this winter, brick-and-mortar
retailers also invested heavily in e-commerce, increasing the
number of products sold online and adding fulfillment centers to
speed shipping. Wal-Mart added over 10 million products to
Walmart.com ahead of the season and more aggressively matched
Amazon's prices in recent weeks, according to price-tracking
firms.
Amazon gained share online thus far. Between Nov. 27 and Dec.
17, Amazon grabbed around 41% of online sales, up from 38% last
year, according to data from Slice Intelligence, which collects
data from email receipts of 4.2 million shoppers. In comparison,
Walmart.com took in 2.7% of sales, down from 3.2% last year, though
the vast majority of Wal-Mart's sales occurred in stores.
One bright spot has been electronics retailers, including Best
Buy and Apple Inc., according to Slice. Items such as smart
thermostats, Bluetooth speakers and the newest iPhone have sold
well, said Ken Cassar, an analyst at Slice.
Some retailers are turning to same-day delivery this week to
head off Amazon, including Bloomingdale's and PetSmart Inc., said
Daphne Carmeli, CEO and founder of delivery service Deliv Inc. The
pet-store chain is even offering it free in 17 metro areas through
Christmas Eve.
"That's new. We didn't see that last year," she said. "That's
becoming a way that retailers are able to out-Amazon and compete in
this world."
Write to Sarah Nassauer at sarah.nassauer@wsj.com, Laura Stevens
at laura.stevens@wsj.com and Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
December 23, 2016 05:44 ET (10:44 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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