Thanksgiving is over and Black Friday is here. We are officially in thick of the holiday shopping season. What that means is that all the retailers out there will be piling on the discounts, decorating the stores and selling the happy mood to get people inside their doors. And customers are expected to queue up.
But will they? Or will they sit in the comfort of their homes or elsewhere clicking away at their choices and waiting for the day when technology will make the experience even more engaging and enjoyable.
Yes, the online versus brick-and-mortar battle is still raging on and we finally have viable contenders on both sides. So what’s changed for Zacks Rank #3 (Hold) Amazon (AMZN – Free Report) and Zacks Rank #2 (Buy) Walmart (WMT – Free Report) this past year that makes the holiday showdown particularly interesting?
Amazon Has Whole Foods
Amazon forked out $13.7 billion for Whole Foods to build its position in the grocery supply chain, leverage Whole Foods’ 434 retail outlets for delivering an omnichannel experience and tap the growing number of people doing their grocery shopping online.
About 12% of grocery shoppers used online channels in 2016, but with millennials beginning to build their families, this percentage is on the rise. Moreover, Amazon really knows its customers on the basis of the tons of data it has accumulated about its patrons over the years. It is therefore well positioned to cross promote its products, drive deals on its platform, sell more Prime subscriptions and increase sales.
Besides, the deal strengthens Amazon’s position in the grocery market versus market leader by far Walmart as well as German food retailers Aldi and Lidl (focuses on discounts). Walmart, which generates $170 billion in grocery sales annually, or more than half its revenues, has been doing a lot in response to the acquisition in an attempt to protect its revenue stream. Technology investments (especially for inventory management), changing the store layout and omnichannel are some of the initiatives that appear to be working well for the company.
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