It’s all in the seasonal sandwich

By on December 30, 2021 0

After a nearly 90-day whirlwind of preseason promotions, holiday sales, product shortages, delivery constraints and a persistent spike in COVID numbers, the retail rush is officially in. books, or as the Ink stains sung in their 1947 classic; “It’s over except the crying.”

The funny thing is that while there is always a lot going on in retail, when it was all said and done, from a business perspective there wasn’t much- thing to cry. In fact, the holiday shopping season 21 looks set to hit the “Better Than Expected” column in the retail history books.

At the consumer level, however, the early anecdotal returns are much more ‘Meh’, as retailers might keep the price on the inventory they had or simply ignore customer complaints about the lack of selection over the. inventory that they did not have in Stock. Ultimately, Q4 provided a collective industry “We told you so” moment for any supply chain skeptics who hadn’t done their Christmas shopping until Halloween. (just kidding… sort of.)

Chart source: Yahoo Finance

Of course, with each company holding more than 9% of total US retail sales, Walmart and Amazon were not immune to this dynamic and therefore should be able to report solid results when their profits grow. fourth trimester will be posted approximately 4 to 6 weeks away.

Prior to those numbers, the effects of investor pessimism regarding all of the aforementioned headwinds weighed heavily on both stocks throughout the quarter and throughout the year elsewhere, Amazon and Walmart (shown in blue and green respectively above). significantly underperforming the benchmark. S&P 500 Index (red) not only for the past three months, but also for the past year.

The seasonal sandwich

And so, with the holiday season behind them and the earnings season ahead of them, Amazon and Walmart currently find themselves sandwiched between another perennial predicament – the comeback seasons.

While it is difficult to get specific data on the returns of the two titans, applying general industry dynamics and current retail trends to these 9% of stakeholders would suggest that their stores and warehouses and, in some cases, dumpsters are now filling up with unwanted goods.

Walmart has an advantage on the logistics side of this equation thanks to the existence of its nearly 5,000 locations in the United States where consumers can go and (most likely) line up at a customer service desk with customers. rejected goods and a receipt and request a refund or exchange.

See also: Amazon finally rivals Walmart for consumer retail sales

Amazon, with the help of its 500-unit-strong Whole Foods chain, can easily process some returns in person through in-store drop-off kiosks; most of its Christmas rejections will be sent back to its 110 distribution centers scattered across the country.

From there, in either case, the products and payments enter a vortex of Matrix-like variables to decide whether they are worthy of being refunded, restocked and resold, or just withdrawn and written off.

According to Tobin Moore, expert in “reverse logistics” and co-founder / CEO of returns management company Optoro, it’s not uncommon for companies to see return rates exceed 30%, because this annual hangover of more $ 100 billion is wreaking havoc on retailers. “And more and more since the share of online purchases has eclipsed 21%.

Masks and men

Seasonal sandwiches aside, Amazon and Walmart are still refining their portfolios and positions, and the final stretch of 2021 wasn’t all that different from the rest of the year.

For starters, Amazon Pharmacy – the web giant’s biggest push into healthcare – has had a year, marking a year of publicity and marketing around the handful of $ 1 prescriptions it offers to consumers. Prime subscribers. That said, it looks like Amazon is expecting more from its digital pharmacy in year two, as it recently installed the head of Amazon Prime. Neil lindsay is the head of Amazon Health, with oversight of everything from wearable medical devices to prescriptions.

For both companies, with some of the country’s largest private sector workforces, the final days of December will mark a sort of procrastination on the workforce front. While both have aggressively raised starting salaries above state and federal mandatory minimums, and have also increased benefits and offered signing bonuses selected to fill certain positions, from the Jan. 1, more than half of the country will enter a $ 15 per pay plan.

It probably won’t force either employer to make many more changes, but it most likely will for many of their slower competitors in the workplace. This means that the wage premium that Walmart and Amazon were offering to attract the hard-to-find workers they need will either decrease or disappear altogether, and in turn, it will be less attractive to work in their locations compared to their rivals.



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