Holiday Shopping: Retailers Aim to Thwart Online Rivals

Target is embracing a strategy this holiday season that the discounter has long resisted: matching Amazon.com’s prices. “We wanted to be in the game,” says Chief Executive Officer Gregg Steinhafel. For years, brick-and-mortar retailers have played down the online threat. After all, Web shopping accounts for only about 7 percent of U.S. retail sales, and last year about half of Americans didn’t even shop online, according to Forrester Research. E-commerce, however, becomes a much bigger slice of the pie during the holidays. This year shoppers—comparing prices on their smartphones as they troll the aisles or avoiding the mall altogether—will push online sales to 16 percent of the $586 billion total, forecasts the National Retail Federation.

That’s why Target, Macy’s, Nordstrom, and others are trying to thwart online rivals such as Amazon, Gilt Groupe, and EBay. They’re matching prices and offering same-day shipping; making their physical stores more Web-like with kiosks and mobile checkouts; offering experiences—free family portraits at J. C. Penney in November—and merchandise shoppers won’t find elsewhere. Most of all, they’re trying to be “omni-channel,” industry lingo for the seamless integration of the Web and the store. “This will be the first holiday shopping season where [stores] are making a more concerted effort to avoid bleeding sales to online retailers,” says Ken Perkins, president of Retail Metrics. “The question on everybody’s mind is how are they going to fare?”