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Will Macy's, Kohl's, and Target Steal Some of Amazon Prime Days' Thunder?

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For many of us that grew up in small towns across America in the ‘70s and ‘80s, Amazon Prime Days strike a strong resemblance to the good old fashioned “Crazy Days” of yore. For those of us who remember that far back, merchants would pull their wares out onto the sidewalks and sell them at discounted prices. Moms (mostly) would cart their bored kids out into the hot summer main streets of their hometowns and rifle through the racks and bins on the hunt for deals. It also unofficially marked the beginning of the back-to-school shopping season.

Nostalgia aside, when Amazon - whether they planned it or not - launched its very first Prime Day event in July four years ago, they set the groundwork for the online shopping version of Crazy Days that has become the now de facto kickoff for the back-to-school shopping season. According to ValuePenguin Amazon Prime Day rivals Black Friday and Cyber Monday. A survey conducted by consumer engagement firm Valassis begs the question:  is Amazon Prime Day the Black Friday of Summer? The survey states over two-thirds (68 percent) of Amazon shoppers, and 91 percent of Prime members specifically, have shopped on Prime Day previously, or will do so this year. Amazon said last year’s Prime Day was its biggest ever with 100 million products sold. This year, Amazon is extending the sale to two days (July 15-16), which means that it is likely this year will be even more successful.

Further, while numerous studies like this one show that back-to-school shopping is still happening more in-store, this year, Amazon seems to have planted a formal flag in the ground, launching its own online Back-to-School store.

Cue collective eye roll by retailers. Amazon, being Amazon, may sometimes feel infallible with consumers who overlook criticisms by those that claim Prime Days are glorified  “digital yard sales” selling “subpar offerings” from little-known brands, and point to the massive power failures at the launch of last year’s shopping event. 

That said, there is an upside here for any retailer. While Amazon has once again shaped consumer expectations - this time for the cyber kickoff of the back-to-school shopping season - the likelihood that consumers will be shopping for back-to-school deals everywhere means that a rising tide could lift all boats.

While about 70% of consumers plan to shop Amazon during the July sales events, 44% plan to shop Walmart, 40% plan to shop Target, and 24% plan to shop Best Buy, according to a survey by Bazaarvoice, a retail consulting firm, cited in this Business Insider story.

It’s my view that Amazon’s steadily increasing Prime membership fee hikes, continued tax dodging, and poor working conditions are starting to weigh on the minds of many hard-working consumers. Bloomberg even reported that Amazon workers at the Shakopee, Minnesota, fulfillment center are planning to strike for six hours during Amazon Prime Day. Many consumers see Amazon shopping as a necessary evil, and are more than willing to go elsewhere if a retailer can come close to Amazon on product, pricing and convenience. To steal eBay’s tagline for “Crash Days” (which pokes fun at Amazon’s power failure last year), retailers should offer “great deals on the things [shoppers] actually want.” I also think shopping experience will play an important role, whether that means in-store pickup or fast, free delivery.

Here’s what a few retailers are doing that will likely start diverting consumers away from Amazon’s Prime Days in the hunt for deals.

Better Products:

  • eBay: eBay (NASDAQ: EBAY) “Crash Sale” will be offering deals on major brands including LG, Apple, Samsung, KitchenAid and Garmin - likely working to offer better products than Amazon. Further, if eBay’s site crashes, it said it will drop even more deals.
  • Dell: Similarly, Dell (NYSE: DELL) is likely riding on Amazon’s criticism of poor product offerings and has been running “Black Friday in July” events for a few years now. This year the company plans to offer the best deals on PCs, accessories, and gaming.

The Benefits of In-Store Options

  • Target: Target (NYSE: TGT) is having “Deal Days” on July 15 and 16, where it says it will offer 40% off some furniture, 30% off some small appliances and cookware, and other deals on toys, sporting goods and bedding. To differentiate from Amazon on shipping and fees, it’s also touting the fact that shoppers can pick up their items ordered online on the same day at Target stores, where no membership is required to shop the special deals.
  • Macy’s: Macy’s (NYSE: M) promoted “Black Friday in July” for the entire week last year, offering massive deals both in-store and online, plus free shipping. While they have not formally announced plans for 2019, in past years, online orders over $49 will ship for free, but store pick-up is also free. Macy's also offered 12 free after mail-in rebate doorbusters, while those deals are in-store only.

Loyalty Programs

  • Kohl’s: Even Kohl’s (NYSE: KSS), who has a partnership with Amazon for returns, is cashing in on deals for back-to-school. This article, which advises its readers to skip Prime Days this year to shop elsewhere for deals, says “Kohl’s likes to snatch your attention away from Amazon Prime Day deals with some killer offers of their own … You can actually stack up to four codes online at Kohl’s,” and earn Kohl’s Cash for every $50 you spend. The article also notes that shoppers can benefit from pickup in store, often same-day.

Retailers looking to make the most out of the race for deals during Amazon Prime Days/back-to-school should consider what has made Amazon so appealing to consumers. Those looking to compete should be ready to offer better products at competitive prices and take advantage of physical footprints and loyalty programs where Amazon still can’t compete. Those who do will have the greatest opportunity to not only increase market share, but generate loyalty long-term in an increasingly noisy deal-driven shopping environment.