Flash Sales in Play to Boost Holiday Results
Retail sales have ticked up for three months in a row, and the industry is gearing up for what it hopes to be a strong season Amazon (NASDAQ:AMZN) and Wal-Mart (NYSE:WMT) both plan to hire over 50,000 temporary employees, while Target (NYSE:TGT) sees the need for as many as 90,000 temps.
One of Amazon’s most recent schemes is a series of flash sales off its “2012 Holiday Toy List.” Amazon will offer short-term sales on a limited number of popular toys every day through November 18. Flash sales often provide steeper discounts than blanket sales in brick-and-mortar stores, and the strategy could discourage people from taking a trip to the local destination shopping center for a spending spree.
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In turn, Wal-Mart wants to toe the line with Amazon through a program called Wal-Mart To Go. For $10, online customers who place orders before noon can get same-day shipping. Wal-Mart will employ United Parcel Service (NYSE:UPS) to pick items up from the store and deliver them to customers. There is some concern that the service will create more overhead than it’s worth. Wal-Mart already operates on pretty a slim net-profit margin of about 3.5 percent. Amazon, which launched a same-day delivery service in 2009 to select cities, already has efficient shipping infrastructure in place at its warehouses. Of all the fights to pick with Amazon, shipping may not be the best.
Target has announced an initiative to match competitor prices, aimed at convincing shoppers that online options won’t necessarily save them more money. “Target’s holiday plans are built around an outstanding shopping experience, exclusive merchandise and competitive prices,” said Target chairman, president, and CEO Gregg Steinhafel in a press release. “Our guests will be able to shop with confidence this holiday season knowing that we are intensely focused on providing them the right merchandise at the right price.”
Target is also allowing customers to shop with their smartphones via QR codes on posters, television spots, and coupons, beginning November 7.
Major retailers across the board are also resurrecting layaway programs, and many are sweetening the deal. Sears (NASDAQ:SHLD) — which owns Kmart — will offer no-fee and ship-to-home layaway programs, trying to pull in budget-conscious consumers.
“The economy continues to be the No. 1 worry on consumers’ minds,” said Jai Holtz, VP of financial services at Sears, according to Fox Business. “And as we go through the holiday season, we looked at features and values we could add that consumers could benefit from. Layaway, at this time, is a huge benefit because it allows them to buy merchandise and pay it off over time.”
Wal-Mart has also brought back layaway.
Best Buy (NYSE:BBY) is taking a bold step by introducing an in-house Android tablet, slated to start selling on November 11. The tablet is being launched into an increasingly populated market. Apple (NASDAQ:AAPL) is obviously the major player, with Amazon pushing its Kindle line harder this year than ever. Google (NASDAQ:GOOG), Samsung, and even Barnes & Noble (NYSE:BKS) with the Nook line also offer alternatives, and the Microsoft (NASDAQ:MSFT) Surface will be on shelves by the end of the month. While the Best Buy Tablet, called the Insignia Flex, is coming in at a relatively low price point of $239 and $259 — 1 GHZ processor, 9.7-inch screen, 10-hour battery life, and a camera — the company is not expected to stop carrying rival devices.
Best Buy is also launching a price-matching initiative, but with caveats. The program won’t run from the Sunday before Thanksgiving through Cyber Monday.
The interplay between online and brick-and-mortar retail will be in the spotlight with what could be the strongest holiday season in a few years on the horizon.
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