AMZN vs. WMT Weekly: let the markdowns begin

By on June 17, 2022 0

First, May’s weak retail sales simply confirmed the changing mindsets and economic climate that consumers had already experienced all too well – and knew all too well.

Next came the biggest interest rate hike by the Federal Reserve in nearly 30 years, which only proved that the central bank was actually worried that inflation – now up to 8.6% – does not get out of control.

Taken together, these separate but related dilemmas perfectly framed the backdrop that Amazon, Walmart, and every other chain store, e-commerce site, and mom and pop store in the country now face.

In short, too many bad things piling up in inventory, not enough good things to fill holes in shelves, and customers growing weary every day as they pour hundreds of extra dollars into their gas tanks.

Clearly, this is a scenario no sane trader would ever choose to be in, not to mention the soft landing most hoped for them after enduring two long years of pandemic-induced disruption, which leaves few options but to ride through the turmoil, adopt “plan B” so to speak, and make a big sale.

Prime Day pushed back to July

After being postponed to October 2020 and then rescheduled to late June last year, Amazon announced this week that its annual Prime Day event would return to its traditional spot on the calendar and take place on July 12 and 13 this year. However, if bargain-hungry people don’t feel like waiting, Amazon said “early deals and members-only deals” will actually begin next week, June 21.

So not only will Prime “Day” last for three weeks this year, but it will also overlap the second and third quarters in terms of earnings impact.

Nonetheless, it took less than a day for the first clone sale to be announced, this time by Target, which positioned its own Deal Days event for July 11-13. If history is any guide, dozens of other retailers, including Walmart and its “Deals for Days” version, will soon follow.

While everyone loves a bargain, there are a few issues these special sale events are likely to face this year, not just due to economic weakness and inflation-fueled fear driving weary consumers back. , but also the fact that now there are so many sales going on that it is often difficult to tell.

walmart Offers pagefor example, is a permanent and important feature on its website, and recently received a “Sizzling Summer Savings” upgrade that reflects both the season and the retailer’s promise to rectify its sloppy performance it announced there. a month ago.

“We are not satisfied with the earnings performance for the quarter, and we took action, particularly in the latter part of the quarter, on cost negotiations, staffing levels and pricing while managing our variances. price,” the Walmart CEO said. Doug McMillon told investors on the first quarter call on May 17.

However, as many retailers join in the mid-summer fun, consumers are sure to see plenty of deals online and in-store in the days and weeks ahead as an expected surge in the markdown river appears to have begun. .

Drone Wars

At a time when alternatives to using gas to get to the store make more economic sense than ever, Amazon announced this week that it would offer a pilot drone delivery program “later this year” in Lockeford. , California, a rural community 90 miles west of San Francisco that is home to approximately 3,500 people.

News of the limited launch and testing program came just three weeks after rival Walmart announced its partnership with DroneUp would expand to 4 million people in six states and seek to make 1 million air deliveries by the end of the year.

While Walmart’s drone program seems to be circling Amazon right now, the e-commerce leader, which has been pursuing drone technology for a decade, insisted its experimental system was different.

“The promise of drone delivery has often sounded like science fiction,” Amazon said in a blog post that credited hundreds of scientists, engineers, aerospace professionals and futurists for the advancements. to date and those to come as the program develops.

“Not all drone systems are created equal,” Amazon said. “We’re building something different,” the company said, before highlighting the “sense and avoid system” its planes will use to allow them to fly farther and avoid collisions with other planes. people, pets and obstacles.

Supercenter of the Future

Whether it’s outfitting rooftops to handle drone traffic, reconfiguring parking lots to accommodate better traffic for increased curbside pickup, or improving digital store integration and website, physical retail locations everywhere are getting a major overhaul right now, and Walmart is the latest to jump in.

Announcing plans for what is expected to be the first of 30 redeveloped locations this year, Walmart said it plans to add more high-end branded apparel, furniture and partnerships, such as its recent tie-up with Gap Home. or his new collaboration with country singer Miranda Lambert.

In each case, the operator or the 4,700 national stores are looking to boost margins and increase in-store and online traffic by selling more expensive and stylish merchandise.

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NEW PYMNTS DATA: THE CUSTOM PURCHASING EXPERIENCE STUDY – MAY 2022

About: PYMNTS’ survey of 2,094 consumers for The Tailored Shopping Experience report, a collaboration with Elastic Path, shows where merchants are succeeding and where they need to up their game to deliver a personalized shopping experience.