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The weekly dispatch: Amazon and Target gear up for an early holiday season, Walmart goes meta

Illustration of a person standing at a desk, gesturing to a large monitor showing holiday decorated calendars of October, November, and December.

‘Prepping for the holiday season’ can mean very different things, depending on what kind of retailer you are. If you’re a mostly offline brand, it could mean expanding your BOPIS capabilities, or refining your returns process in-store to reduce overcrowding. But in 2022, brands are focusing on bolstering their e-commerce presence for smoother online selling and interactions with shoppers. 

Everywhere you look, major retailers are trying to reinvent their approach to holiday retail. From Walmart experimenting with the metaverse to Macy’s new approach to digital shopping, there’s no shortage of changes to dive into in our weekly dispatch!

Macy’s embraces digital with third-party selling platform

The Macy’s logo on a laptop computer.

Macy’s has launched a curated third-party party marketplace as part of its pivot towards digitally-led shopping. The Mirakl-powered platform is set to feature over 400 brands across a range of product categories, including but not limited to electronics, pets, babywear, and beauty.1

This move comes after several years of Macy’s struggling for relevance amid the expansion of e-commerce, with the legacy department store failing to hit on the right formula to turn around declining foot traffic. But thanks to the growing popularity of omnichannel, Macy’s storefronts may have a new lease on life in boosting digital sales – if it can hit on the right merchandising and sales strategy, a common criticism of its store locations.2

Third-party marketplaces come with a range of advantages for retailers, namely that it allows them to stock a wider range of brands and products than they can manage independently. However, this strategy does run the risk of inconsistent brand experiences and counterfeit listings. Moreover, Macy’s is hardly alone in pursuing this approach, with Walmart’s third-party Connect platform also expanding in the run-up to the holiday season.

Amazon and Target initiate early holiday sales to spur consumer spending

Workers shipping packages on a conveyor belt at an Amazon warehouse.

For the first time, Amazon and rival retailer Target announce a two-day sale event in October to kick off the holiday season.

This comes after weeks of rumors that Amazon was planning a pre-holiday sale event prior to Black Friday. Amazon will hold a two-day sale event, starting October 11th through to the 12th

The official name for this kick-off sale event is the ‘Prime Early Access Sale hosted for its Prime Subscription Members as a reward for their subscription service to Amazon Prime.

Target also revealed its seasonal sale event a week earlier, touting more flexibility for consumers to shop, with more deals and same day delivery services for the entire season.3 This holiday sale will run from October 6th through to the 8th.

Amazon and Target have much to contend with this season, along with many other merchants and retailers. Consumers are looking for early deals and deep savings to mitigate supply chain issues and high inflation ahead of the BCFM (Black Friday and Cyber Monday) rush.   

According to Marshal Cohen, NPD chief retail industry adviser, “…more normalcy is resurfacing, and the consumer excitement to get into stores for the deal-hunting they have missed over the past two years is capable of sparking increased activity for retailers who create a sense of urgency around the more traditional peak days for in-store traffic.”4

Walmart ventures into the Metaverse

A Walmart Land graphic.

Walmart is now delving into the metaverse through the popular immersive video gaming platform, Roblox. 

The major discount retailer will launch two metaverse interactive experiences through Roblox in the lead-up to the holiday season, Walmart Land and the Walmart Universe of Play. 

This is an effort by to generate more interest and engagement from the 17- to 24-year-old Gen Z demographic. Justin Breton, director of Walmart’s brand experiences and strategic partnerships, said in a statement, “We’re really manifesting the brand in a way that we think is going to excite the next generation of consumers and get them to think of Walmart differently.”5

Walmart Land will feature three virtual experiences: Electric Land, House of Style, and Electric Fest that will target fashion, style, and beauty lovers. The computer-generated world will include a virtual store of select merchandise and unlock gaming tokens and badges to further one’s standing in the game.

Walmart Universe of Play will cater to actual gamers, who love avatars and immersive game play. This metaverse will also feature Immersive Games, like Jurassic World and Paw Patrol, Rewards – to collect virtual toys and redeemable coins and Virtual Adventures where gamers can jump on hoverboards to travel faster through various automated words.

Walmart is one of many retailers who have joined the metaverse commerce platform, Roblox. Some other retailers who have stepped into the metaverse world also include American Eagle, Timberland, and Gucci, just to name a few.6 The metaverse continues to solidify its popularity in the retail space, as it grows into a genuine retail commerce channel.

FedEx announces GRIs for 2023

A 3-dimensional bar graph made from a 100 dollar bill with an upward curved arrow.

The first round of General Rate Increases for 2023 have been announced – and shippers need to brace themselves for a costly year ahead.

FedEx has announced a GRI of 6.9% on Express, Ground, and Home Delivery services starting on January 2nd, 2023, blaming the current inflationary environment for the size of the increase.7 This comes after relatively modest increases during the pandemic of 4.9% for 2021 and 4.9% for 2022.

Although UPS and USPS have yet to announce their GRI for next 2023, commentators are predicting a similarly large spike in rates. Collectively, the three carriers make up the lion’s share of parcel volume in the United States at 71%, according to 2021 statistics from Convey.8

With more peak season surcharges looming on the horizon, these General Rate Increases spell bad news for businesses who are aiming to shorten delivery windows and compete more effectively with the likes of Amazon and Walmart. Multi-node fulfillment, free shipping thresholds, and paid expedited shipping are some of the strategies available to small businesses to assist them in reducing shipping costs and timeframes.

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