Secretly, I hope this backfires on Walmart. In a BIG way.
From Yahoo News:
Is Wal-Mart (WMT) jumping the shark? The world’s biggest retailer is now kicking off the holiday season before Halloween trick-or-treaters come down from their sugar rush. The company announced it is starting the shopping season Saturday, November 1st. Wal-Mart is offering more than 20,000 Rollbacks on products including brands such as Disney’s “Frozen,” Teenage Mutant Ninja Turtles, Samsung and Dell.
Amazon (AMZN) will also be kicking off its holiday deal season Saturday. The online retail giant will feature two daily "deals of the day" from November 1 through December 22.
But Wal-Mart is hoping to take on the ecommerce giant. On November 3rd, it is going to be hosting is own version of Cyber Monday- a 24-hour cyber savings event. The company plans to expand its digital shelves to include 7 million items. They include the following:
Sony 48” LED HDTV for $348 versus $448
Nintendo 2DS Handheld Video Game System for $79 compared to $129
Barbie Dreamhouse for $120, was $148.82
Office Depot and OfficeMax will also have holiday deals this weekend on computers, and Sears will offer special deals during a friends and family sale on November 9, according to USA Today.
Yahoo Finance Editor-in-Chief Aaron Task says Halloween has become the new Thanksgiving. Wal-Mart is aggressively courting consumers before the holidays even begin, but the strategy may backfire. He thinks consumers will ponder whether to do their holiday shopping now and get started early or ask themselves, "Well, if they are giving me this deal today, what’s going to be a month from now or six weeks from now as we really do get closer to Christmas?" Task says, "If people think prices are going to keep going down, they are going to wait to buy.”
Wal-Mart has said it is steeling itself for competition to be as tough or tougher than last year, when heavy discounting ate into margins across retailers. The company’s profits dropped in the holiday quarter last year, and it has posted six straight quarters of flat or declining same-store sales in the U.S. Research firm Customer Growth Partners predicts consumer spending will rise 3.4 percent, up slightly from last year’s 2.9 percent growth- the slowest since 2009.
Wal-Mart is also testing a program to match online prices from competitors such as Amazon.com (AMZN). A spokeswoman told the Wall Street Journal that executives are discussing whether they will go ahead with the price-matching program, expanding on the current one for local brick-and-mortar competitors. It is already testing the plan in certain markets and individual store managers already have the discretion to match online prices if shoppers ask. The retailer has resisted officially matching online prices even as competitors Best Buy and Target took on the practice of “showrooming” where customers browse at traditional stores but end up shopping online.
Task thinks price-matching comes at a price. It eats heavily into margins, but he says “the hope is if you are shopping at Wal-Mart, you buy that one extra item, and they can make it up on volume. They’re saying, 'Look, we want you to shop at Wal-Mart whether it's in the store or online.' Whether people do it is the question. I guess you gotta give them credit, they’re being very aggressive here.”