Walmart And Target Stand Tall During Prime Day
Like most retailers, Prime Day has challenged Walmart and Target over the last five years. But this year, the two heavyweights developed a strong strategy to combat Amazon and executed against it.
Amazon will still have a glass-half-full that goes as follows:
- Total sales volume will be up – both for Prime Day(s) and for July. There are 12 extra hours of sales and Amazon spent more advertising dollars to promote the event. The lift for the event will be more significant than the total sales for the month, but an increase is an increase, and growth is nothing to downplay.
- Membership will go up. At roughly 60% of US Households, there are still more households that can join the loyalty program.
- Amazon’s ad revenue will go up. The pressure is on to promote items. Brands and retailers will spend.
- Prime Day Live – the video streaming shopping experience – will be a success. Whether using the influencer model or the tv shopping network model, Live captures the attention of consumers and drives them to key products. This will be a key victory for the retailer, and it will be interesting to see how Live is used in the future.
None of that seems rosy for Target or Walmart.
But there is plenty that will hurt in Amazon’s HQ1. Walmart and Target played an intelligent strategic offense that highlighted Amazon’s shortcomings.
The first move was to message that everyone-is-included. “No membership required” was Target’s move. “Exclusive for Everyone” was Walmart’s.
Secondly, both highlighted same-day delivery or pick-up, emphasizing the fact that their stores are a significant advantage. Target’s deals all screamed “available at the nearest store” or ship-to-store options. Visiting a Walmart or Target to pick-up a purchase often adds a transaction and captures additional share. Same-day home delivery does not compel add-on purchases at Amazon.com.
And finally, the two competitors did not make the mistake of loading their stores with additional promotions. This was probably considered at leadership levels as a way to utilize their store fleet to defend share. But in-store promotions would have minimized the positive impact of compelled store visits and bled margin. There was no panic-planning this year.
Amazon’s short-term win is significant. But Walmart and Target both kept their heads poked Amazon, and highlighted their own strengths. In the long-term, this is a concern for Amazon.