Amazon and eBay Begin the Battle for Your Holiday Dollars

The holiday shopping season is the most important time of year for retailers. In fact, holiday sales can account for as much as 40% of annual revenue for some retailers, according to the National Retail Federation. But a shortened holiday season this year is pushing companies such as Amazon.com  (NASDAQ: AMZN  ) and eBay (NASDAQ: EBAY  ) to rethink their strategies. With just 50 days until Christmas, let's take a look at which online retailer will be a bigger hit with shoppers this year.

Forget "shop till you drop"
With six fewer shopping days between Thanksgiving and Christmas this year, more consumers may choose the convenience of online shopping instead of fighting the crowds at busy brick-and-mortar retailers. During November and December, online sales are expected to climb between 13% and 15% to as much as $82 billion this year, according to Shop.org.

As a result, even physical retailers are aiming to make it faster and easier for customers to spend money online. Wal-Mart (NYSE: WMT  ) got a jump on the Christmas shopping season by unveiling its special deals promotion online Nov. 1. Wal-Mart also doubled the number of products it sells online to roughly 5 million ahead of the holidays in order to better compete with online retailers like Amazon.

Source: Wal-Mart.

Wal-Mart expects its online sales to grow 30% this year to $10 billion. That compares to analyst estimates for annual sales of more than $74 billion for Amazon in fiscal 2013, and annual revenue of $16 billion for eBay. To help it stay ahead of competitors this year, Amazon is extending its holiday deals promotion program to third-party sellers.

Participating sellers will have the opportunity to display their holiday deals on Amazon's high-traffic holiday promotion shopping pages, which highlight limited-time discounts and popular holiday gift picks. It's a great deal for Amazon's more than 2 million third-party sellers, since it gives them exposure to millions of online shoppers. Not to mention, the program should boost sales for Amazon by making it easier for customers to find holiday products from Amazon's online sellers.

Source: eBay.com/today.

eBay, on the other hand, is betting on mobile to drive a significant portion of its holiday sales this season. Part of its mobile strategy is to create collections curated by celebrities. Then eBay members can choose to follow certain collections or curators, which makes it easy to browse products from anywhere and on any device. It's all part of the company's new "eBay Today," which features hand-picked items from more than 500 million products currently listed on eBay. In time for the holidays, the e-commerce giant is also offering free in-store pickup at Best Buy and Toys R Us stores.

Source: eBay

Additionally, eBay is providing early holiday savings up to 70% on select goods now through Nov. 18. Some of the deals included are limited-time offers, while others are weekly specials. These efforts should help eBay attract plenty of holiday shoppers this year. But Amazon still appears better-positioned heading into the holidays thanks to its free two-day shipping for Prime members. This gives Amazon an advantage with online shoppers because those with Prime memberships are more likely to spend on Amazon.com.

Retail MVPs
The year-end holiday season is the Super Bowl of retail, and this year is all about online shopping. Discover which e-commerce stocks should be at the top of your list this Christmas in The Motley Fool's special in-depth retail report. It's free, simply click here to get it now.


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