Changing leaves on trees and pumpkins signal it's retailers have already started hanging stockings and tinsel. It's Christmastime! Photo: Flickr via David Porter.
When every day needs to be Christmas for retailers worried about the coming shopping season, participating in holiday creep becomes a necessity.
Serial offender Sears Holdings (SHLD +0.00%) came out of the gate earlier than most again last month with a commercial for its Kmart chain that, if nothing else, humorously embraces its recidivist nature by specifically telling you it's not a Christmas ad.
While such marketing by retailers has helped encourage consumers to spend more earlier , it likely won't do much to help Sears' slow-motion slide into oblivion. It continues to hemorrhage sales and customers so that it's become a matter of when, not if, it finally succumbs.
For other retailers, though, there is a reason to be hopeful.
Measured in years, not quarters
Considering the magnitude of despair that flowed following Amazon.com's (AMZN 2.47%) quarterly earnings report last week, others may soon start panicking, feeling it may be a replay of last year's Christmas holiday when there was six less shopping days and constraints on consumer spending.
But perhaps they shouldn't be so worried.
After all, the e-commerce leader's third quarter performance saw revenues surge 20% to $20.6 billion dollars, while sales of retail products were up 16% from 2013. The concern was more over the widening losses it recorded, $437 million compared to $41 million in the year ago period.
CEO Jeff Bezos doesn't look to quarter-to-quarter results, but rather how his investments in opportunities pay off down the road. Amazon's results shouldn't be seen as a reflection of how Christmas will play out.
But it might still give the king of bricks-and-mortar retail Wal-Mart (WMT 2.48%) the opportunity to make inroads on Amazon's turf this Christmas.
Christmas shopping is now as simple as the push of a button. Photo: Flickr user Maria Elena.
Last year Wal-Mart stumbled badly, recording declining year-over-year sales after having forecast they'd come in flat. But it's been using the time since to make investments all its own, buying technology firms like Adchemy, Stylr, Luvocracy, and Yumprint to go with the slew of previous tech acquisitions it made, such as OneOps, Tasty Labs, Torbit, and ShopyCat.
It also just brought onto its board of directors the founder of Instagram, Kevin Systrom. Wal-Mart may have long been recognized as a retailer adept at using technology to fortify its vast logistics business, and now it's been making up for lost time in using it to build out the actual retail side.
Traffic cops may be needed
Of course, even though Wal-Mart is the second most trafficked site behind Amazon during the holidays, its 250 million visits last year remain far below the 903 million that tramped through its rival's site.
So while Wal-Mart will likely stay at the No. 2 spot in the online shopping hierarchy (Experian Marketing Services says Target came in a distant third last year with 125 million visits followed by Best Buy with 88 million, and Macy's and Kohl's at 62 million each), there's good reason to suspect it will close the gap some.
Let your fingers do the walking ... and shopping
First, analysts at Mintel are looking at online sales to grow 14% this year -- better even than the National Retail Federation's prediction that holiday sales will grow between 8% and 11% in 2014 rising to as much as $105 billion -- and it anticipates store-based retailers will garner more than half of all online sales, suggesting that as the world's biggest retailer Wal-Mart will hold its own against online-only sites like Amazon.
It still promises to be a merry Christmas for retailers. Infographic provided by National Retail Federation
That's not to say that lesson is lost on Amazon, which now offers groceries online and will be opening its first physical store in San Francisco, but Wal-Mart generated $7.7 billion, or less than 2% of its $476 billion in revenue from the online channel in 2013 and is expecting them to almost double this year.
Giants make big splashes when they jump in the pool
That will be achieved in part because Wal-Mart has invested heavily in making its site friendly and accessible to those using mobile devices and the site PracticalEcommerce highlights three additional trends that when considered, lean heavily in the retailer's favor: Free shipping will be everywhere this year, in-store pickup will be more prevalent, and video will play an increasingly important role in conveying information to consumers.
Certainly the first two play into Wal-Mart's wheelhouse as it has been the out-front champion of offering consumers site-to-store free shipping. Amazon's Prime members do get free shipping too on tens of thousands of items, but it does cost them $99 a year for the privilege.
In the end, Amazon, with about a decade's head start, will win again this Christmas, but look for Wal-Mart to chip away at its lead and become an even bigger threat to its dominance.
