Dear Amazon: Don’t Expect an Anniversary Card from Walmart
You have no doubt been up all night scouring Amazon’s Prime Day deals and you are now entering the zombie phase in front of your computer or smartphone. We can now officially say RIP to Black Friday but the competition is stomping its feet.
Let’s be real—Black Friday went the way of the flip phone 2 years ago when retailers started offering deals at least one week before Thanksgiving. Last year the flood-gates opened up as many retailers canceled Thanksgiving Day altogether and turned it into just another day at the mall. In addition, Summer sales are not a new thing—Target has been running a Summer Black Friday sale for years. So why is Wal-Mart shaking its fist at Amazon’s 20th anniversary celebration by suggesting limiting big deals to Prime members is unfair? After all, Wal-Mart would never do such a thing to drive market share (however WMT is testing a $50 Prime membership of its own).
The answer is simple: Amazon continues to force the creep of gross margins at brick and mortar retailers around the world. Not only is the 800 lb gorilla stealing market share and forcing the competition to match prices (gross margin creep) but it also is forcing the competition to spend lots of shareholder cash on long overdue ecommerce investment catch up. In Walmart’s case 20% of customers are Amazon Prime Members while the discounter still only derives low single digits revenues from online
No wonder Walmart is stomping its feet, lowering shipping thresholds and following the leader.