Retail
Amazon's Last Chance for Cyber Monday Deals
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Just as some stores opened before the Thanksgiving weekend in the hope of gaining sales before the holiday season, others have extended special discounts well after Cyber Monday. Amazon.com Inc. (NASDAQ: AMZN) is among the most prominent of these. Cyber Monday sales have hot ended at the huge e-commerce retailer.
Cyber Monday is nothing more than a catch-all word anymore. All it means is that retailers will push to get people to buy online as they shop. Amazon has made Cyber Monday into a week-long national retail holiday during which people can buy heavily discounted watches, vacuum cleaners and socks. Some of these discounts are only good for a few hours. Maybe Amazon believes this urgency also will turn shoppers into buyers — before discounts disappear.
Some of the Amazon sales discount merchandise 70% to 75%. This tactic may clean out unwanted inventory. It may be planned loss leaders to get shoppers in the e-commerce door where they will buy items on which Amazon makes money. Maybe Amazon is just making a mistake.
The most aggressive tactic of the extended Cyber Monday is what the company calls Prime Now — “Skip the Trip. One hour delivery.” The program almost certainly has to lose money, but it comes with a trick. It is only available to Amazon Prime members who pay $99 a year for their membership, which has among its benefits photo storage, ad-free music and a massive collection of programs that are available via streaming. The service has powerful rivals, in particular Apple Inc. (NASDAQ: AAPL) and Netflix Inc. (NASDAQ: NFLX). Holiday promotions to sell Prime can’t be matched by these rivals.
Something like Prime Now has not, and probably cannot, be offered by any other retailer. Amazon had to have set up a complex system of warehouses, inventory tracking and delivery services to make the service work. A full week of Cyber Monday and the miracle of one-hour delivery makes Amazon’s goal of a $35 billion quarter likely.
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