SEATTLE - The battle for your buck is already heating up for the holidays. Retailers like Walmart and Target are stepping up to compete with Amazon, but the online retail giant isn't taking the competition sitting down.
Experts are saying that’s good news for shoppers this year, because in some cases, retailers are showing they’re willing to take a hit in order to get your business.
“It’s going to be a wild retail season,” said Jeffrey Shulman, a professor of marketing at the University of Washington’s Foster School of Business.
The fiercest fight is over online sales.
“It's competitive. There's a lot of money floating around, and there's a big shift people are fighting to get a piece of,” Schulman said.
KIRO7 caught up with shoppers in Bellevue and asked what percentage of holiday gifts they buy online.
“One hundred percent,” said Jannen Castillo, one shopper.
“I would say almost all of it,” said Brad Gillespie, who was at a Bellevue strip mall on Thursday.
“Pretty much consistently online,” said Eric Lunsford, another shopper.
That has Target offering, for the first time, free two-day shipping with no minimum purchase to compete with Amazon's free two-day shipping for Prime members.
Walmart plans to keep the $35 minimum purchase for free two-day shipping but already rolled out its Black Friday with some deals you can buy now.
All this comes as a new study says holiday sales are expected to top $1 trillion for the first time, in part because of low unemployment.
“Experts are expecting a huge holiday season, and with that, there will be a lot of money,” Shulman said.
Most shoppers KIRO7 talked with said they plan to spend more than last year on gifts.
“Unfortunately, probably yes,” Lunsford said.
“It’s more. Every year, it's more,” said Aura Negoita, another shopper.
Shulman says brick-and-mortar shops are doing what they can to chip away at Amazon's market share.
“There’s a war for customers. You've got to lock them into your company early. Then you hope you can hold onto them after the new year passes,” Shulman said.
Amazon is not taking the competition lightly.
For the first time, it's offering free shipping for non-Prime members, also with no minimum purchase. (You’ll have to wait, though, as it's for standard shipping.)
“Amazon has not been known to walk away from a fight,” Shulman said.
The intense competition means good news for shoppers.
“It’s really valuable for the customer, but it's really expensive for the retailer. Their margins are razor thin and to add cost to ship one tiny little $5 product to you, that could be more than they make on the product,” Shulman said.
“Would that additional cost eventually be passed on to the consumer?” KIRO7’s Deedee Sun asked.
“No. The retailers that are giving free shipping can't really afford to raise their prices,” Shulman said. “Because Amazon would become lower priced than their competition, which would further their advantage in the online space."
So as we prepare to shell out serious cash “No more than $700,” one shopper said.
“Two thousand dolars, maybe” Castillo said.
“Five hundred to $600,” Lunsford said.
It means this holiday season, the retailers are courting us.
Shulman adds that if it feels like every shopping season is starting earlier, it’s because it probably is. He said retailers are trying to roll out their deals earlier to get our attention before we do our holiday shopping.
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