Amazon Expected to Continue to Crush Walmart and Target This Holiday Season
Amazon.com has become synonymous with online shopping. Just as “google it” or “I need a Band-Aid” have become colloquialisms, so has “order it on Amazon.” I work with dozens of millennials and have a 5- and 7-year-old at home, and whenever they need something, their first response is “get it on Amazon.”
The “culture of Amazon” norm (not to be confused as a trend) permeates the holiday shopping season as well. As Amazon, which accounted for 44 percent of retail traffic among the 50 top retailers over the past year, grows more dominant, retailers are constantly trying to catch up. In what appears to be an effort to combat Amazon’s Prime membership service this holiday season and capitalize on the billions of dollars in sales now up for grabs following the demise of Toys“R”Us and the bankruptcy of Sears, Target and Walmart are offering free two-day shipping. However, the attempt is too little too late.
Beyond free holiday shipping, Target and Walmart have no unique, stand-alone selling propositions to compete with what millions of Prime members already get year-round. One thing Amazon does tremendously well is build loyalty, so its customers are unlikely to jump ship, especially now that Amazon has extended free, fast shipping to all for the holidays, not just Prime members. Walmart and Target’s shipping offers were just pegs on the grid, and Amazon has sunk their battleships in this round.
As an open marketplace, Amazon has a significant competitive advantage again Walmart, Target and other retailers. Last year alone, Amazon added 300,000 new third-party resellers to the already millions it had. This is massive, as it grants shoppers the ability to find virtually anything on Amazon. The retail giant doesn’t have to go out and curate or purchase and store merchandise, essentially creating millions of real-time suppliers. While Walmart has become a marketplace, it has nowhere near the number of third-party resellers Amazon does, and Target only has its inventory on its site.
There's no denying that both Target and Walmart have loyal customer bases, and their new shipping policies will certainly incentivize their current shoppers to hit their sites (and stores) more often. However, the retailers cannot offer the same ease and convenience that Amazon provides its Prime and even non-Prime customers, especially without the massive number of resellers constantly filling their coffers with product availability.
Brett Rose is the founder and CEO of United National Consumer Suppliers (UNCS), a wholesale distribution company that buys manufacturer closeouts and overstock inventories in bulk then sells them in smaller quantities to retailers like Macy's, Home Goods, BJ's Wholesale Club, and Amazon resellers.
Related story: Holiday Shipping Tips for Now and Throughout 2019
Brett Rose is the founder and CEO of United National Consumer Suppliers (UNCS), awholesale distribution company that buys manufacturer closeouts and overstock inventories in bulk then sells it in smaller quantities to retailers like Macy's, Home Goods, BJ's Wholesale Club, and Amazon resellers. To date, UNCS has sold hundreds of millions of units annually. It sources 50 different product categories for over 98,000 retailers and e-tailers in 32 countries.