Outside of shorter holidays, US retailers increase faster delivery and early deals

(Reuters) – US retailers are rushing in with faster-than-ever delivery deals and earlier Christmas campaigns in hopes of easing the impact of this year's shorter holiday season, a period that could be make-or-break for retailers.

FILE PHOTO: A Shopper Wears a Santa Hat at King of Prussia Mall, United States Largest Retail Store, in King of Prussia, Pennsylvania, USA, December 8, 2018. REUTERS / Mark Makela

Thanksgiving, the traditional kickoff for the US holiday shopping season, falls on November 28 this year, a week later than last year's November 22, so retailers have six fewer days to sell between Thanksgiving and Christmas Day.

The last shortened shopping season was in 2013 – a year when store chains and delivery companies crept in to get packages for customers in time for Christmas.

Dealers' urgent speed to avoid a repeat of 2013 is on full display, as is the rush to compete with Amazon, which began rolling out one day free shipping of over 10 million products in June.

The holiday season from November and December can account for as much as 40 percent of annual sales.

"It's a very compressed holiday … every day counts," said Target Corps CEO Brian Cornell in October.

For the first time, Target offers its "Drive Up" service, which allows buyers to order on the Target app and have their items shipped to their car, in all 50 states. The company said that most orders will be ready within an hour and be delivered in less than two minutes on arrival.

This will be in addition to free shipping without minimum purchase, order pickup on online purchase and same day delivery services.

Similarly, Best Buy has promised free delivery the next day on thousands of items. And, for the first time, Walmart Inc offers free shipping the next day on orders over $ 35 with no membership fees.

"A shorter holiday puts more emphasis on each shopping day," said Steve Sadove, senior adviser to Mastercard and a former managing director and chairman of department store operator Saks Inc. Sadove said the outlook for the season remains positive despite fewer days between fall Thanksgiving and Christmas.

Mastercard, which measures consumer spending across all types of payment including cash and checks, expects US retail sales, excluding cars, to grow 3.1% from a year ago between November 1 and December 24.

Holiday deals are flowing, which traditionally started the day after Thanksgiving, known as Black Friday, started earlier and earlier in November each year. This year, such campaigns began in mid-October due to the shorter season. For example, Walmart began offering holiday deals on October 25.

Steep discounts on items, usually visible just before or just after Thanksgiving, are offered by many companies. Online home retailer Wayfair offers up to 70 percent off top-selling items. Others like Amazon, Target and Kohls have already started offering Black Friday deals.

"Dealers must plan early on a sense of pressure and then strengthen it after Thanksgiving, when the rubber meets the road," said Carol Spieckerman, president of consultant Spieckerman Retail.

To be sure, the deals and delivery offers do not necessarily mean that the customers will buy more, said retail consultants. The tariffs imposed by President Donald Trump on Chinese imports, which have raised prices for many goods, weigh on the sentiment, they said.

Seventy-five percent of Americans are concerned that tariffs will make holiday shopping more expensive, according to the National Retail Federation, a leading industry trade body.

Customs duties for Chinese-made clothing, shoes and electronics came into force on September 1. Another round of 15% US tariffs on consumer goods is expected on December 15.

The Trump administration said Wednesday that a meeting between Trump and Chinese President Xi Jinping to sign a long-awaited interim trade agreement could be delayed until December.

Reporting by Aishwarya Venugopal in Bengaluru and Nandita Bose in Washington; Editing by Leslie Adler

Our Standards: Thomson Reuters Trust Principles.

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