The latest version of the Kindle Fire was the biggest-selling device on Amazon.com. Image source: NIC KYU.
When the next round of earnings reports come out, it may be just one company that will able to say it had a merry Christmas: Amazon.com (AMZN 0.53%). Where it seems just about every other retailer struggled to make their holiday sales goals, the e-commerce leader breezed along, shipping out hundreds of millions of products and growing its lucrative Prime membership program in the process.
The numbers seem staggering. Amazon said over 200 million more items were shipped via Prime this holiday season and it sold twice as many Amazon devices as it did last year, which included its new Fire tablet that out of the millions of products for sale on its website, was "the No. 1 best-selling, most gifted and most wished-for product."
Moreover, in just the third week of December alone, it signed up 3 million new members to its $99 per year Prime service. While many of them no doubt did so just to get free shipping during the 30-day free trial period and will likely cancel the subscription immediately afterwards (market researchers say that's what happened last year), even if just a small percentage stay on, Amazon will reap a windfall.
While estimates vary on just how many Prime members there are, ranging anywhere from 40 million to 80 million -- and Amazon itself is cagey with precise numbers, preferring instead to say Prime has "tens of millions of members worldwide" -- they're a valuable commodity to the e-commerce leader.
It's estimated Prime members spend some $60 billion annually on the site and tend to spend double the amount non-members do. Thus the influx of new Prime members this Christmas, whatever the final tally turns out to be, will be a gift that keeps on giving for Amazon.
Packages from Amazon.com have been piling up outside of consumer doors globally as it shipped to 185 countries this Christmas.
Other retailers can only hope to find their holiday sales as rewarding.
While Kohl's (KSS +6.82%) reported its highest gross day online on Black Friday this year, it also felt the need to launch a shopping marathon to squeeze every last dollar out of consumers. It opened its doors at 7 a.m. on Dec. 17 and didn't close them again until 6 p.m. Christmas Eve. The 170 consecutive hours the retailer was open exceeded by 70 hours the amount of time it was open last year and the year before, suggesting Kohl's needed the additional time to make its numbers.
That's in line with industry analysts who say retailers are hard up to hit their goals this year. Reuters quotes Consumer Growth Partners as finding even bigger Super Saturday sales this year -- the last Saturday before Christmas is typically the biggest sales day of the year -- weren't enough for retailers to meet its estimates for the entire November to December holiday shopping season. Where the National Retail Federation had predicted growth of 3.7% this year to $55 billion (down from 4.2% growth last year), Consumer Growth Partners forecast 3.2% growth, yet the trend is pointing to just a 3.1% increase.
That lackluster response by consumers led retailers like Gap (GPS +0.15%) to heavily discount clothes at its Old Navy chain by as much as 75%, and caused Macy's (M +1.86%) to hand out $10 cash cards to customers to lure them in, allowing them to spend them immediately and effectively subsidize any sales it made.
Yet even with all the heavy discounting going on, store traffic fell. RetailNext said store traffic tumbled 10.4% from the year ago period for the weekend before Christmas with sales down 6.7%.
Of course, some of the sluggishness is because sales have moved away from physical locations to online. Although Black Friday sales plunged 10% from 2014, Adobe said online sales surged 14% that day and Cyber Monday sales jumped 12% to $3 billion, the first time they've ever crossed that threshold.
Unfortunately, retailers are being stymied in the online channel by Amazon's presence. Internet Retailer says that as consumers started thinking about Christmas, more than anyone else, they thought of the e-commerce king. During the month of November, 35% of online shoppers said Amazon captured their imagination while the combined mindshare of nine other retailers -- a list that included Wal-Mart, Target, and Best Buy, not exactly slouches in the retail world -- totaled just 13%.
What it all suggests is that although the retail industry may end up reporting lackluster earnings results because it didn't get the holiday lift it was hoping for, Amazon.com's Christmas spirits will be high indeed.
