Photo: Getty Images/DaveAlan
Amazon is not letting Walmart and Target get a head start on Christmas
Amazon.com has joined the growing ranks of retail stores and sites running major sales promotions before Halloween in an effort to capture a greater share of the dollars that Americans will spend on Christmas gifts this year.
Prime Early Access, as Amazon calls the promotion, will be exclusive to those holding Prime memberships. The event will run on Oct. 11 and 12 and promises members “hundreds of thousands of deals.”
Prime members, as with past Prime Day and holiday sales events, will not have to wait until the Early Access sales to score deals. The site has already launched a digital storefront where current Prime members or those taking advantage of a free 30-day trial can look for savings on items of interest.
Amazon has initiated a Top 100 list of popular items and will offer special deals on items from the list throughout the Early Access event. The retailing and technology giant said that it will offer Prime members “deep savings” across in-demand categories such as apparel, consumer electronics (including its own devices), home and kitchen, pets and toys.
Amazon will face plenty of rivals as it seeks to win the holiday sales competition.
Walmart claims to have made “significant price investments in key categories” with “thousands more Rollbacks this holiday” on top gifts in key categories including beauty, consumer electronics, home and toys. The retailer, which is kicking off its holiday promotions on Oct. 1, has added three “no concerns” return options, including a January 31 cutoff for returns as well as curbside returns and return pick-up of returns at the homes of Walmart+ members.
Target’s Deal Days promotion, billed as its biggest ever, will run between Oct. 6 and 8 with “hundreds of thousands of incredible deals” across categories. The chain is running a price match guarantee from Oct. 6. through Dec. 24.
Mark Mathews, vice president for research, development and industry analysis for the National Retail Federation, expects consumers to react positively to all the early holiday deals.
“It is absolutely good news for consumers,” he told the Los Angeles Times. “Now all of a sudden we are almost back to pre-pandemic times when you have too much of this, too much of that so you have to discount.”
- Introducing Amazon’s Prime Early Access Sale — A New Holiday Shopping Event for Members to Save Big October 11 and October 12 – Amazon.com
- Did Walmart just guarantee it will be the easiest place to shop for Christmas? – RetailWire
- Did Target just move Black Friday up to October 7? – RetailWire
- A second Prime sale shows Amazon is nervous about the economy too – Los Angeles Times
Discussion Questions
DISCUSSION QUESTIONS: Do early sales promotions suggest a nervousness on the part of retailers about the 2022 holiday season? Will Amazon, Target and Walmart’s October sales events significantly change holiday shopping patterns in 2022 and the years that follow?
Poll
Loading …BrainTrust
Shelley E. Kohan
Associate Professor, Fashion Institute of Technology
Richard Hernandez
Merchant Director
While I don’t think the holidays will be a disaster, there is no doubt sales will be more subdued than last year – especially in volume terms, and particularly for online. So retailers need to pull out all the stops to get people shopping and many want to start that process early to secure a slice of the action. As we’ve seen from Amazon’s recent results, product sales growth is flat to slightly negative and they will want to turn that around in the final quarters.
The early start to the holiday promotions means retailers aren’t taking any chances. There is plenty of uncertainty, so it’s understandable that retailers are playing offense early. Amazon’s two-day holiday sale announcement is not a surprise as it has to work even harder to capture sales before shoppers head back to physical stores in earnest. There’s no question that Amazon, Target and Walmart’s collective promotional activities will encourage other retailers to get in the game, and combined this will likely pull sales forward.
Early sales aren’t reflective of nervousness. Retailers are responding to excess inventory, and demand for deals and smooth supply chain operations.
Since October 2020, Amazon, Walmart and Target have shifted holiday shopping patterns forward. It’s smart for consumers and companies to start early rather than wait until November.
Amazon announced plans for two Prime Day sales early this year, so this is more about testing the waters on whether they can capture lightning twice rather than concern about holiday sales numbers. But it does conveniently throw a wrench into other retailers’ plans for holiday promotions and marketing.
With an inventory glut, a backlog of pandemic savings and the need to validate demand amidst market uncertainty, is it any surprise every retailer wants to get a head start on holiday marketing? Starting the season top-of-mind will drive all season market capture.
High inventory + shaky consumer confidence = promote early and often.
Retailers should be nervous, the recent Fed interest rate hike has consumers worried about a recession. Retailers want to convert inventory to cash and will worry less about margin over the next three months. The margin ship has sailed for this year. Retailers need to churn through holiday, warm weather and fashion goods so promotions are starting early. Amazon changed the game in terms of the cadence of holiday shopping in 2020 when Prime Day was in October which has forever changed when the holiday season begins. While sales may be slightly higher than last year (projected at 5 percent to 6 percent), it does not cover the increase in inflationary pricing.
Spot on about Prime Day 2020 accelerating that early holiday shopping season. The message is clear, Amazon may have been first, but the positive outcome retailers saw form an earlier shopping season are that much more desirable this year!
Holiday promotional creep was going to happen under any set of circumstances. But this year the combination of high inventories and the recession/inflation equation really complicate things. Can sales outpace inflation? Or maybe the bigger question is about margins. Given the need to chew through all this inventory, do margins have any shot at exceeding last year? Or is it just a question of how much lower they will be this year for many retailers? Retailers who can report flat to improved sales with flat to improved margins will have performed admirably.
Not a surprise. I just watched a three day Christmas before Christmas sale on QVC. I see more retailers jumping into the pool really soon.
As I said last week, ten years ago in these discussions, we wrote that Black Friday wasn’t a day or a week as retailers were extending the holiday shopping season.
The early sales promotions do not suggest nervousness more than last year or a decade ago. Retailers all know spending is finite, no matter if it is cash or credit. The mindset has always been, “Let’s get the shoppers’ dollar before the other guy does.” When it comes to the holidays, “build it, and they will come.”
Perhaps, the future will bring a mash of holiday shopping, with no non-holiday periods, starting on January 1, just as the Christmas season ends.
All retailers are seeing the market dynamics negatively impact consumers’ financial situations (rising inflation, rising gas prices, business layoffs) and are responding with a series of earlier than normal promotions. I think it’s smart. Do these actions equate to similar actions next year and the years ahead? It all depends on how the economic fundamentals play out in the years ahead.
Then message is clear — retailers have product inventory and they don’t want to see consumers shopping elsewhere the closer we get to the holidays with the ongoing risk of inflation tempering their purchase patterns. We’ve seen this play out before during the pandemic with shipageddon and other factors causing retailers to start the promotional season earlier and earlier, Each year we debate “will this become the norm or is it temporary.” I think Amazon, Walmart, and Target have given us their answer to that question, Now it’s a matter of how quickly other retailers will follow.
Early promotions are a clear sign of the economic uncertainties the consumers face as sentiment worsens. Major retailers like Target, Walmart, and Amazon are out to protect their market shares and will not cede a single basis point without a fight. Holiday ad spending is kicking in earlier as retailers want to capture as much demand as possible while providing products, offers, and programs to attract shoppers and promote conversion. Starting sales events in early October is troubling for the 2022 holiday season. However, the early 2022 sales events should not set the tone for subsequent years, as the current economic conditions are unique. What it will do is reduce demand in the post-holiday period.
All big box retailers are rolling out their strategies to stand out in the deal season. Personally, I feel Amazon is a better fit to shop from. By providing a curated list of 100 products, Amazon is giving its shoppers plenty of time to plan their budgets and place orders as needed.
Additionally, “Prime early access” will induce non-members to sign up for Prime membership, helping Amazon secure customers for a year!