How Amazon’s Holiday Sales Impact Walmart and Target


Dec. 27 2019, Published 11:26 a.m. ET

Amazon (AMZN) stated on Thursday that it had had a phenomenal holiday season. Though Amazon didn’t provide any specific numbers around sales, it said that that “this holiday season was record-breaking.” Amazon witnessed robust growth across all major categories, including Amazon devices, toys, fashion, home, beauty, and grocery.

Amazon saw a surge in the number of customers using its Prime services. In one week alone, the online giant witnessed over 5 million new customers worldwide use its Prime free trial or start a paid Prime membership.

Further, the number of items delivered through its Prime Free One-Day and Prime Free Same-Day Delivery nearly quadrupled year-over-year.

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Delivery push drove Amazon’s holiday sales   

The convenience of shopping, deeper discounts, and lucrative deals helped Amazon attract a record number of shoppers this holiday season. Jeff Bezos commented, “This holiday season has been better than ever thanks to our customers and employees all around the world.”

Earlier, we emphasized that Amazon’s delivery push is likely to boost its Prime membership base and, in turn, its sales. The online giant is hitting all the right notes when it comes to fast online order fulfillment. Amazon invests heavily in its delivery business, thus adding more convenience for its Prime members.

Meanwhile, Amazon Fresh delivery service is now free for Prime members. Moreover, the company continues to invest in its supply chain to make one-day delivery a standard for its Prime members.

Similar to Amazon, ultrafast delivery is likely to boost sales of both Walmart (WMT) and Target (TGT) this holiday season. We believe both Walmart and Target had the right inventory position to support higher demand during the holidays.

Target to shine this holiday season

Amazon’s robust holiday season suggests that Target Corporation is likely to be one of the few retailers that could post stellar sales.

Target’s robust comps growth over the past several quarters suggests that its strategic initiatives in delivery and merchandise are paying off. We expect Target to sustain the momentum during the holiday season.

We believe the company’s same-day delivery push, through its Shipt, in-store pickup, and Drive Up services, is likely to drive traffic this holiday season. Also, strategic promotions, compelling deals, efficient inventory management, and the launch of exclusive brands could drive sales.

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For the holiday season, Target rolled out free shipping on thousands of items starting November 1. Furthermore, Target announced significant promotions for Black Friday and Cyber Monday. The retailer added over 2,000 new home decor items this holiday season. Moreover, it added 1,000 curated gifts and holiday essentials below $15. Meanwhile, Target also added over 10,000 new and exclusive toys.

Notably, the focus on merchandising, especially on fast-selling items like toys and home decor, is likely to bolster Target’s holiday sales. Further, Target’s convenient shopping options could boost its top line.

Target provides Drive Up services across all 50 states in the US. Moreover, its same-day delivery services through Shipt are available in more than 1,500 stores across 48 states. Further, the retailer offers in-store pickup across all of its stores.

Walmart’s digital expansion likely to boost sales

Besides Amazon and Target, Walmart could also be one of the beneficiaries of higher holiday sales this year. We believe Walmart’s strategic pricing on top-selling categories like gaming, toys, electronics, and home, could continue to drive its traffic.

Moreover, the expansion of convenient shopping options could further support sales growth. Notably, Walmart extended its online grocery pickup services to 3,100 stores and added 1,400 pickup towers. Also, Walmart offers grocery delivery services through 1,400 stores.


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