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Battle for holiday shoppers heats up

AP • Nov 27, 2013 at 3:10 PM

NEW YORK — This holiday shopping season, it's Amazon vs. everyone else.


online giant has attracted customers from big store chains like

Wal-Mart and Best Buy with low prices and convenient shipping. Now,

stores are fighting to get customers back during the busiest shopping

period of the year.

Stores are doing things like matching the

lower prices on Amazon.com and offering the same discounts in stores as

on their websites. For its part, Amazon is giving customers the option

to pick up items at physical locations and adding Sunday delivery.


two sides are dueling over shoppers like Jessica Danielle, a

speechwriter who plans to do the bulk of her Christmas shopping on

Amazon. "All the time spent going to brick-and-mortar stores, is it

worth my time?" said Danielle, 31, who lives in Washington, D.C. "I

don't think so."

There's a lot at stake for both sides. Amazon has

built a following, but wants to grow its business globally. Meanwhile,

brick-and-mortar retailers struggle to keep shoppers from using their

stores as showrooms to test out and try on items before buying them for

less on Amazon.

The holiday season ups the ante. Both online and

brick-and-mortar retailers can make up to 40 percent of their annual

revenue in November and December. And this year, they're competing for

the growing number of shoppers who are as comfortable buying online as

in stores.

Holiday sales are expected to rise 3.9 percent to

$602.1 billion, according to The National Retail Federation. Of that,

about $78.7 billion is expected to be online, up 15 percent from last

year, according to Forrester Research.

Here's how the fight is playing out:



of Amazon's biggest advantages is its low prices. It can charge less

for everything from TVs to T-shirts because it doesn't have the high

costs of running physical locations.

Last year, some retailers

offered to match the lower prices that customers find on websites like

Amazon during the holiday season. And this year, more have made this a

policy. Best Buy even is offering to refund the difference if a customer

finds a lower price after they purchase something up until Christmas

Eve. The strategy could eat into profits, but retailers hope sales will


Staples is among retailers also offering the same

discounts online and in stores during big shopping days like the day

after Thanksgiving known also Black Friday. "We want customers to be

able to shop however they want and whenever they want," said Alison

Corcoran, Staples senior vice president.


Stores had long seen their physical locations as an albatross, but now they're using them to their advantage.


was telling me ... 'These stores, that's really a liability that you

have,'" said Hubert Joly, Best Buy's CEO. "Absolutely not. It's an asset

that you have 1,000 warehouses strategically located close to the


Best Buy is among the retailers using their locations

as distribution hubs from which they can ship goods that are ordered

directly to customers' homes. Wal-Mart, for example, said items ordered

online and shipped from stores usually are delivered in two days or

less — quicker than having them shipped from warehouses across the


But Amazon.com Inc. is widening its distribution network

to offer speedier delivery, too. Amazon added 8 million square feet of

distribution centers and hired 70,000 people to work in them. It also

added 1,382 robots to its line to help get packages out the door. And it

partnered with the U.S. Postal Service to deliver some packages on


"This year we're able to be faster and have more in-stock items," said Amazon spokeswoman Julie Law.



retailers are trying to get shoppers into stores. Gap Inc. has expanded

its service that allows shoppers to reserve items online, and then pay

and pick them up within 24 hours at many of its Banana Republic and Gap


And options that allow customers to order and pay online

and then pick items up at stores are popular. That led Renada Skannal,

27, to go to Walmart.com to order protective gear that her nephew could

wear when riding a bike her mother is buying him as a Christmas gift.

Her mother picked it up at a store to save time and shipping costs. "I

want to make things easier for me," said Skannal, who lives in Jackson,


At the same time, Amazon has started offering pickups at

physical locations. Last year, it introduced lockers in 10 cities for

customers to pick up items in stores like 7-Eleven and Rite Aid. But

some competitors, including Staples and RadioShack, which initially

welcomed the lockers, have taken them out.



experts say the battle is over customer service. StellaService, which

tracks customer service, found that between August and October, the time

it took to speak with a live agent on Amazon's customer service line

was one minute, compared with two-plus minutes at Best Buy and six

minutes at Staples.

"When it comes to customer support, Amazon ... sets the standard for everyone else," said Jordy Leiser, StellaService's CEO.


brick-and-mortar retailers are catching up and in some cases surpassing

Amazon by working on their customer service. For instance, Amazon

resolved the issue when a customer called 86 percent of the time between

August and October, according to StellaService. Best Buy had a 97

percent success rate.

"Online retailers have put so much pressure

on brick-and-mortar stores," said Marshal Cohen, chief retail analyst at

market researcher The NPD Group. "Brick-and-mortar retailers are trying

to make people feel like the store cares again.

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