Priming Retail
● Major chains are kicking off holiday gift promotions earlier than ever this year.
Amazon Prime Days, which begin Tuesday, has caused scores of retailers to offer their own discounts.
Amazon’s Prime Day, potentially the biggest gift buying period of 2020, is running into intensified retail competition.
Kohl's, J.C. Penney, Walmart, Target and Bed, Bath & Beyond are among those retailers triggering huge savings, new products and conveniences like contactless curbside pickups, and speedy deliveries, either in tandem with the Amazon promotion or a few days ahead, all to encourage consumers to get some holiday shopping done early, and distract them from the savings lure of Prime Day.
They're also reminding consumers about the safety precautions being undertaken to reduce the risk of getting infected by the coronavirus. This year, consumers are most concerned about contracting the virus while inside stores. But they are also worried that retailers will run out of the gifts they want to buy most, since many retailers have bought conservatively for the fourth quarter, and that they won't get their gift purchases delivered on time for the holidays.
Mostly retailers are promoting decorative home, cozy and comfortable casual clothes and accessories; home office supplies, home entertainment, kitchen-related products, electronics, games and computer equipment because of the lifestyle changes as a consequence of COVID-19. While showcasing their discounted items, retailers are reminding consumers of the safety precautions they've installed to make their stores safe to shop.
Due to the pandemic, Amazon this year reset Prime Day to Tuesday and Wednesday this week, as opposed to July, when it has been staged since 2015. It's for Amazon Prime members only. Due to the delay closer to Christmas and the profound and continuing shift toward online spending, versus spending at brickand-mortar stores, Prime Day is expected to generate robust double-digit growth this year. It's been a key impetus to the earliestever onset of holiday gift promoting across the retail industry. In recent years, the holiday push for many retailers began right after Halloween.
“We have been working to secure partnerships with new national brands and to expand our product offerings as part of our efforts to provide compelling merchandise and deliver an engaging shopping experience,” said Jill Soltau, chief executive officer at J.C. Penney, which has been working to finalize an agreement with lenders and developers to emerge from bankruptcy.
In her statement Monday, Soltau also said safety remains Penney's “numberone priority and is at the forefront of all our efforts to give our customers the utmost confidence that they can effortlessly and conveniently shop with us in- store and online.”
At Kohl's, “With customers starting their shopping earlier than ever this year, the holidays are already under way…and we're excited to offer a holiday assortment that speaks to how our customers are living today,” Doug Howe, the company's chief merchandising officer, said Monday. “On top of our strong portfolio of national and proprietary brands, we are leaning into the product categories that are resonating most with our customers including all things cozy and comfort, home, active and toys, and adding new brands that will excite and inspire our customers.”
Walmart, seeking to steal some of Amazon's thunder ahead of other major retailers, last week unveiled a “Big Save Event” on its web site, offering savings on thousands of items, as if it were Black Friday. The event started Sunday, runs through Thursday, and offers deals on everything from boots to vacuum cleaners.
Target is replaying its “Deal Days” event this Tuesday and Wednesday but with twice as many deals as last year. Target also said it will offer Black Friday pricing throughout November.
“This year, in a holiday season unlike any other, we know it's more important than ever for our guests to get great deals in a convenient and safe shopping environment,” said Christina Hennington, executive vice president and chief merchandising officer, Target, in a recent statement. “By kicking off our holiday deals earlier than ever, offering Black Friday pricing throughout the full month of November and extending our price match guarantee, we're letting guests know they don't need to wait or face the crowds to get the best deals, all with no membership fees required,” Hennington said in an apparent reference to Amazon Prime's membership fee.
The NPD Group said Monday that 57 percent of U.S. consumers have indicated they do some or possibly even all of their holiday shopping on the Amazon Prime Days event. NPD's annual holiday purchase intentions study, released Monday, indicates that almost as many consumers feel they will get better deals during Prime Days than on Black Friday, but Black Friday, the traditional start to holiday shopping, “still edges it out.”
According to NPD data, Amazon
Prime Days held in July 2019, was the third largest shopping period of that year, behind Cyber Monday and Black Friday. “But this year's infusion of Prime Days into the holiday season may move it up a notch,” NPD indicated.
NPD research shows that 18 percent of consumers identified Prime Day as when they feel they will get the best deals possible, coming in just behind Black Friday at 20 percent of consumers. Cyber Monday came in third.
“The pandemic has changed retail, and the delayed timing of Amazon's
Prime Days will be making its mark on the 2020 holiday season,” said Marshal Cohen, NPD's chief industry adviser, retail. “Consumers are already entering this earlier-than-ever start to the holiday season with a different shopping mind-set, and this is retail's chance to emphasize the notion that early is better when making holiday purchases — when it comes to inventory, shipping, and deals.”
Significantly, Cohen said consumers will be watching all of the early deals, and that 63 percent of the respondents to the study said they are “very likely to compare Prime Day promotions with other retailer promotions before making a purchase. While there have been some competing promotions during July Prime Days events of the past, it is now sharing the stage with broader efforts to kick start the expanded holiday season.”
The Forrester research firm has predicted that online sales would grow
18.5 percent this holiday season, though the increase in fulfillment and delivery costs will cut sharply into retail fourth quarter profits. Retailers make more money on transactions occurring in their stores, rather than online.
Penney's said it is introducing several national brands in time for the holidays selling toys, kitchen gadgets, cookware and wellness and personal care. Among the brands new to the offering are Nordic Ware, Wilton, Philips Sonicare, Lego, Mattel, Fisher-Price and Disney Collection.
Kohl's is also heavily banking on Nike, Under Armour, Adidas, Champion, Levi's, Carter's, and its portfolio of private brands including Sonoma Goods for Life, Apt. 9 and LC Lauren Conrad, to get through the holiday season.
Meanwhile, amid all the hoopla about online shopping events, there's some good news from Coresight Research regarding brick and mortar. The research firm indicated that the proportion of consumers that are avoiding shopping centers/malls and shops in general is gradually declining. Some 56 percent are currently avoiding shopping centers/malls, versus 56.3 percent last week. “Avoidance of shops in general also reached the lowest level we have seen since July,” Coresight said. Around four in 10 respondents are currently avoiding such places.
Coresight also indicated that seven in 10 people said that they expect to purchase from or browse Amazon's
Prime Day promotions.