It’s Goliath versus an army filled with many Davids this holiday season. Amazon has long been a threat on its own to conventional retailers, but leading up to Black Friday the company set its sights on companies like Walmart and Kroger to actively poach their customers, even at loss to itself.
Starting Early, Forcing Hands
Amazon kicked off its Black Friday efforts early this year, launching its “Countdown to Black Friday” deals on Nov. 1, a full two weeks earlier than it did with its “Road To Black Friday” sale in 2016. In addition to snatching up potential customers earlier, it forced many other retailers to respond. Within the next week, Black Friday ads “leaked” from the likes of Target (Nov. 6), Kmart (Nov. 7) and Best Buy (Nov. 8), just to name a few.
However, beyond just putting its competitors on the back foot to begin with, Amazon’s Black Friday countdown included deals and sales that were impossible for physical retailers to match in lightning deals. By posting limited-time offers on small batches of items, Amazon encouraged frequent check-ins and impulse purchases, both of which escaped the grasp of brick-and-mortar stores.
As powerful as Amazon is, it has no direct control over the prices set by third-party sellers, meaning that competitors can still undercut the e-retailer on items it does not produce itself. However, beginning Nov. 6, Amazon started subsidizing discounts on third-party items, paying sellers the difference out of pocket.
The notice on Amazon’s seller forums is terse, and though it offers third-party merchants the option to opt out if they choose, the company does not need to provide them with advance notice before offering discounts to consumers.
So far the discounts have been minor, yet significant. The Wall Street Journal reported that discounts topped out at 9 percent, meaning that they won’t draw in especially deal-hungry consumers, but can squeeze past physical retailers who don’t offer price-matching guarantees for products bought from third-party sellers online.
Prime . . . The Greatest Gift Of All
The main product that Amazon is trying to push for Black Friday is also the one it’s not discounting. After acquiring Whole Foods in August, the e-retailer slashed prices across several categories, aligning the upper-crust marketplace more closely with Amazon’s own tactics. This shift came further into focus on Nov. 20, when the company announced Prime-exclusive deals at Whole Foods on Thanksgiving-traditional foods.
As of April of this year, Amazon Prime has more than 80 million subscribers, and founder Jeff Bezos himself has stated that his goal is to make it “irresponsible not to be a member” back in 2016. Stories have already surfaced suggesting subscribing to Prime for Black Friday alone.
While physical retailers are stuck selling price-sensitive, one-off purchases in TVs, toys and appliances, Amazon is pushing consumers to join Prime, leading to nearly doubled yearly spending per conversion.