Battle for holiday shoppers heats up

AP Retail WritersNovember 28, 2013 

Amazon Versus the World

FILE - In this March 14, 2004, file photo, a worker scans bar codes in the book warehouse area at the Amazon.com shipping and receiving facility in Fernley, Nev. Brick-and-mortar retailers like Wal-Mart and Best Buy for years have been contending with Amazonís ruthlessly low prices online. But this holiday season, theyíre fighting back harder than ever before, matching online prices, opening up on Thanksgiving Day earlier than ever and ramping up shipping options. (AP Photo/Scott Sady, File)

SCOTT SADY — AP

NEW YORK -- This holiday shopping season, it's Amazon vs. everyone else.

The online giant has attracted customers from big store chains like Wal-Mart and Best Buy with low prices and convenient shipping. Now, stores are fighting to get customers back during the busiest shopping period of the year.

Stores are doing things like matching the lower prices on Amazon.com and offering the same discounts in stores as on their websites. For its part, Amazon is giving customers the option to pick up items at physical locations and adding Sunday delivery.

The two sides are dueling over shoppers like Jessica Danielle, a speechwriter who plans to do the bulk of her Christmas shopping on Amazon. "All the time spent going to brick-and-mortar stores, is it worth my time?" said Danielle, 31, who lives in Washington, D.C. "I don't think so."

There's a lot at stake for both sides. Amazon has built a following, but wants to grow its business globally. Meanwhile, brick-and-mortar retailers struggle to keep shoppers from using their stores as showrooms to test out and try on items before buying them for less on Amazon.

The holiday season ups the ante. Both online and brick-and-mortar retailers can make up to 40 percent of their annual revenue in November and December. And this year, they're competing for the growing number of shoppers who are as comfortable buying online as in stores.

Holiday sales are expected to rise 3.9 percent to $602.1 billion, according to The National Retail Federation. Of that, about $78.7 billion is expected to be online, up 15 percent from last year, according to Forrester Research.

One of Amazon's biggest advantages is its low prices. It can charge less for everything from TVs to T-shirts because it doesn't have the high costs of running physical locations.

Last year, some retailers offered to match the lower prices that customers find on web

sites like Amazon during the holiday season. And this year, more have made this a policy. Best Buy even is offering to refund the difference if a customer finds a lower price after they purchase something up until Christmas Eve. The strategy could trim profits, but retailers hope sales increase.

Staples is among retailers offering the same discounts online and in stores during big shopping days like the day after Thanksgiving known as Black Friday. "We want customers to be able to shop however they want and whenever they want," said Alison Corcoran, Staples senior vice president.

Stores had long seen their physical locations as an albatross, but now they're using them to their advantage.

"Everybody was telling me ... 'These stores, that's really a liability that you have,"' said Hubert Joly, Best Buy's CEO. "Absolutely not. It's an asset that you have 1,000 warehouses strategically located close to the customers."

Best Buy is among the retailers using their locations as distribution hubs from which they can ship goods directly to customers' homes.

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