Traverse City Record-Eagle

Business

November 28, 2013

Brick-and-mortar stores and Amazon go head-to-head

NEW YORK (AP) — This holiday season, it's Amazon vs. everyone else.

The online giant has attracted customers from the likes of Wal-Mart and Best Buy with low prices and convenient shipping. Now, stores are fighting back and going head-to-head with Amazon as the contest for customers heats up 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 web sites. For its part, Amazon is giving customers the option to pick up items at physical locations and adding Sunday delivery.

The 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 cheaper 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're 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:

PRICE WAR

One 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.

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