Tech/Gadgets

Why Amazon’s allure may be tough to top this holiday

The online poll of 2,644 adults, released yesterday, found that 60 per cent of online shoppers planned to do most of their holiday buying on Amazon.com, up from 50 per cent during the same period in 2015. — Reuters picThe online poll of 2,644 adults, released yesterday, found that 60 per cent of online shoppers planned to do most of their holiday buying on Amazon.com, up from 50 per cent during the same period in 2015. — Reuters picCHICAGO, Dec 21 — More US online shoppers plan to give Amazon.com Inc the bulk of their holiday business this year than in previous years, according to a Reuters/Ipsos opinion poll, despite costly efforts by traditional retailers to attract customers to their websites.

The online poll of 2,644 adults, released yesterday, found that 60 per cent of online shoppers planned to do most of their holiday buying on Amazon.com, up from 50 per cent during the same period in 2015. Meanwhile, the proportion of shoppers who said they expected to do most of their shopping at Walmart.com, Target.com and Macys.com declined by about 1 percentage point each in that period.

Consumers opting increasingly for convenience and speedy delivery have already pushed online sales this holiday season to record highs, making it all the more crucial that retailers get their digital businesses into gear.

Wal-Mart Stores Inc, Target Corp and Macy’s Inc, like many of their peers, have invested in deeper online discounts and free shipping this holiday season, potentially hurting fourth-quarter profit margins to win back customers who have turned increasingly to Amazon.com.

Retailers have also invested heavily in sprucing up their websites and mobile device apps. They are rolling out more fulfilment options such as curbside pickup, click-and-collect and same-day delivery. The holiday shopping season can account for 20 to 40 per cent of annual sales for many retailers.

Anand Raghuraman, EY’s Americas leader for consumer products and retail strategy, said traditional retailers’ online sales were growing, but not fast enough to win market share.

“They’re dealing with an 800-pound gorilla that has different metrics around profitability than they do, which is tough to compete with,” said Raghuraman.

Earnest Research, which looks at anonymous card transactions made by millions of US shoppers, said data from the two weeks after Thanksgiving showed Amazon’s market share of US sales had risen 2.6 per cent from the same period last year.

Meanwhile, Walmart’s in-store and online market share for the period was down 1.7 per cent, while Target had lost 0.6 per cent and Macy’s was down 0.5 per cent, according to Earnest.

Target expects fourth-quarter digital growth to once again be among the best in the industry, spokesman Joshua Thomas said. Macy’s spokeswoman Radina Russell said the department store chain had begun the holiday season well and would continue to offer value online and in stores.

Walmart did not immediately provide comment.

To be sure, analytics firms and industry groups expect most traditional retailers to report higher holiday sales this year, both online and in stores, driven by discounting, low unemployment, rising consumer confidence and good weather across the country.

Sales on Thanksgiving and Black Friday also topped prior years and Amazon.com said it broke sales records during that holiday weekend.

According to the Reuters/Ipsos poll, about one in every four adults plan to shop primarily or entirely online this holiday season, up from one in five in 2012. Convenience, delivery and the ability to compare prices easily were the most common reasons people choose to shop online, the poll showed.

The Reuters/Ipsos poll was conducted in English throughout the United States from November 27 to December 7. Because it is an online poll, the respondents may be more experienced with computers and online shopping than the general public. The poll has a credibility interval, a measure of accuracy, of 2 percentage points. — Reuters

MORE ON MMOTV