Facing shorter holiday season, U.S. retailers rev up faster delivery, early deals

This post was originally published on this site

© Reuters. A shopper wears a Santa Claus hat at the King of Prussia Mall, United States' largest retail shopping space, in King of Prussia© Reuters. A shopper wears a Santa Claus hat at the King of Prussia Mall, United States’ largest retail shopping space, in King of Prussia

By Aishwarya Venugopal and Nandita Bose

(Reuters) – U.S. retailers are rushing in with faster-than-ever delivery deals and earlier Christmas promotions in hopes of easing the impact of this year’s shorter holiday selling season, a period that can be make-or-break for retailers.

Thanksgiving, the traditional kick-off of the U.S. holiday shopping period, falls on Nov. 28 this year, a week later than last year’s Nov. 22, leaving retailers with six fewer days to drive sales between Thanksgiving and Christmas day.

The last shortened shopping season was in 2013 – a year when retail chains and delivery companies scrambled to get packages to shoppers in time for Christmas.

Retailers’ urgency to avoid a repeat of 2013 is on full display as is the rush to compete with Amazon (NASDAQ:), which began rolling out free one-day shipping on over 10 million products in June.

The holiday season spanning November and December can account for as much as 40 percent of annual sales.

“It’s a very compressed holiday season…every day counts,” Target (NYSE:) Corp’s chief executive, Brian Cornell, said in October.

For the first time, Target is offering its “Drive Up” service, which lets shoppers order on the Target app and have their items brought to their car, in all 50 states. The company said most orders will be ready within an hour and brought out in less than two minutes upon arrival.

That will be in addition to free shipping with no minimum purchase, order pickup on online purchases and same-day delivery services.

Similarly, Best Buy has promised free next-day delivery on thousands of items. And Walmart (NYSE:) Inc is, for the first time, offering free next-day delivery on orders over $35 without a membership fee.

“A shorter holiday season puts more importance on each shopping day,” said Steve Sadove, senior adviser for Mastercard (NYSE:) and a former CEO and chairman of department store operator Saks Inc. Sadove said the sales outlook for the season remains positive despite the fewer days between Thanksgiving and Christmas.

Mastercard, which measures consumer spending across all payment types including cash and checks, expects U.S. retail sales, excluding automobiles, to grow 3.1% from a year ago between Nov. 1 and Dec. 24.

The holiday deals deluge, which traditionally has started on the day after Thanksgiving, known as Black Friday, has been starting earlier and earlier in November each year. This year such promotions began in mid-October due to the shorter season. For example, Walmart began offering holiday deals on Oct. 25.

Steep discounts on merchandise, typically visible just ahead of or immediately after Thanksgiving, are being offered by many companies. Online home retailer Wayfair is offering up to 70 percent off on top-selling items. Others like Amazon, Target and Kohls have already begun offering Black Friday deals.

“Retailers will need to plant a sense of urgency early-on, then reinforce it after Thanksgiving, when the rubber meets the road,” said Carol Spieckerman, president at consultancy Spieckerman Retail.

To be sure, the deals and shipping offers do not necessarily mean shoppers will buy more, retail consultants said. The tariffs imposed by President Donald Trump on Chinese imports, which have raised prices of many items, are weighing on sentiment, they said.

Seventy-nine percent of Americans are worried that tariffs will make their holiday shopping more expensive, according to the National Retail Federation, a leading industry trade body.

The tariffs on Chinese-made clothes, shoes and some electronics went into effect on Sept. 1. Another round of 15% U.S. tariffs, on consumer goods, is expected on Dec. 15.

A senior official of the Trump administration said on Wednesday that a meeting between Trump and Chinese President Xi Jinping to sign a long-awaited interim trade deal could be delayed until December.