The War for Christmas
When They Go Low...Amazon Goes Lower
In its recent newsletter, Bain & Company (Author’s note from Brad Bane: They’re spelling it wrong!), poses the question, “Is Amazon primed to conquer Christmas again?” And the answer they provide is that it sure looks that way (though there are clearly paths for other retailers to circumvent the Amazon juggernaut).
As a starting point, the newsletter calls out insight provided by Numerator that shows Amazon matches or beats other retailers’ product prices more than 75% of the time.
Amazon can’t win the holidays exclusively with low prices, but other retailers can definitely lose it by not pricing competitively enough. Numerator data also show retail discounts in general are running deeper this year during the early holiday timeframe, so pricing competitively becomes even more critical.
Beyond low prices, Amazon has done two other things that definitely bear mention (okay, they’ve done a lot more than two, but that’s what space permits).
First, they’ve stepped in to fill the void left by the demise of Toys R Us, sending out printed toy catalogs designed to engage families, with QR codes instead of prices to drive shoppers directly to Amazon.com. For a company that grew up as an exclusively online retailer, Amazon absolutely has a feel for the experiential elements of retailing.
Second, and somewhat surprisingly (at least to me), Amazon is offering free holiday shipping, dropping the original $25 minimum purchase requirement for non-Prime members. In fairness, non-Prime members still might be better off signing up for a free trial to receive 2-day deliveries. But it’s interesting to see Amazon look to grow its revenue without simultaneously trying to grow its ecosystem.
The Shipping News, from Target
As detailed in a recent article from Numerator, Target recently announced that they will be offering free 2-day shipping to all consumers on hundreds of thousands of items, with no membership or minimum purchase required. That’s a shot across the bow of Amazon Prime, a sub-Prime offer if you will, providing complementary 2-day delivery with none of the commitments.
What will be interesting to see is the steps taken by Target to drive traffic to its website. Competitive prices and free shipping go a long way toward attracting omnichannel sales, but without constant reinforcement to visit Target.com the question remains as to whether the offer is enough to disrupt embedded consumer behavior.
Target has also taken specific steps to make the in-store shopping experience more enjoyable, offering easier navigation through their stores via using their app to facilitate trip planning in advance. The store truly is serving as Target’s hub during the holidays, with same-day delivery from Shipt and same-day pick-up of in store orders.
It feels like Target has taken a big step toward creating a truly omnichannel experience this holiday season, as a way to compete with Amazon’s more online-centric approach.
Check Me Out, Shopping at Walmart
Walmart is also using its app to create a better in-store shopping experience, offering searchable store maps to help consumers more easily find what they are looking for. As well, they have created the Check Out With Me service, which enables employees to ring up customers where they are making their product selections via a portable payments system.
But what’s most interesting to me about Walmart’s holiday plans is the faith they’re placing in their employees to deliver a relevant and differentiated shopping experience. Unlike most other retailers, Walmart is again not hiring much in the way of additional holiday staffing, instead offering current employees additional hours to cover the increase in shopper volume. It’s a clear reflection of the fact that they believe their people do make the difference, and that experience can’t be replicated by a temporary employee who’s only been on the job a matter of days or weeks. Said a Walmart representative, “We've got a really strong, trained workforce that's able to take on those hours.” In fairness, the counterpoint to the “strong, trained workforce” argument is that it’s a workforce that’s been relegated to part-time status when in fact it’s clamoring for additional hours. But regardless, there’s absolutely something to be said for the impact and efficiency of an experienced employee – someone who’s better equipped to deliver on Walmart’s brand promise.
Finally, seemingly taking a page out of the old Target playbook, Walmart has introduced a number of celebrity collaborations with Ellen DeGeneres, Kendall and Kylie Jenner (at least my kids tell me they’re celebrities), and others. In a nod to omnichannel, in addition to her EV1 holiday collection, Ms. DeGeneres is also curating a list of favorite items on Walmart.com. These collaborations provide one more reason for shoppers to visit both physical Walmart locations and Walmart.com.
Win the Shopper, Win Christmas
Unlike Thanksgiving, where research from Numerator showed that if you win the turkey you win holiday shopping occasion, Christmas shopping is a much more multi-faceted experience. The company that wins isn’t necessarily the one that does one big thing right, it’s the one that does the most little things right. With projections for a strong holiday shopping season, it will be interesting to see which of Amazon, Target and Walmart do the most things right to win the war for Christmas.