Retail
Amazon Pushes Fashion, Prime, and Consumer Electronics
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Amazon (NASDAQ: AMZN) fought a battle on two fronts on Black Friday. In the first, it heavily promoted membership to its Prime service, which includes streaming video and aims at Apple’s (NASDAQ: AAPL) and Netfix (NASDAQ: NFLX) similar services. On the other front, it slashed prices and aggressively marketed consumer electronics and fashion, working against Best Buy (NYSE: BBY) and large department stores.
Prime membership additions is the harder fight of the two. Apple and Netflix already have tens of millions of customers and are well established in the streaming video business. Each has tremendous financial reserves and well honed marketing skills. The edge Amazon has its its free delivery service, which, especially during the holidays, gives Prime an advantage.
Consumer electronics and fashion are sectors in which Amazon has been winner the fight against bricks and mortar retailers for year. The National Retailer Federation recently presented research about how rapidly e-commerce has posted gains:
Almost half of holiday shopping, consisting of browsing and buying, will be done online: average consumers say 46 percent of their shopping (both browsing and buying) this holiday season will be conducted online, up from 44 percent last year.
Best Buy and department stores do not have a large enough presence online to counter this. Macy’s (NYSE: M) and Best Buy recently reported disappointing quarterly results. Online business has not fill in the hole hole created by falling same-store sales.
Amazon’s tactics aimed at retailers can be summed up in its large holiday promotion:
Black Friday Deals are here! Skip the lines and shop Black Friday deals from anywhere, even your couch. We have thousands of limited-time Lightning Deals for you to choose from, exciting Deals of the Day, and savings on your favorite electronics, toys, jewelry and more. These limited-supply deals will go quickly, but we’ll add new deals as often as every 5 minutes so you can be sure to find a great deal!
“Skip the lines” explains in one phrase Amazon’s advantage.
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