For yours truly, that has meant a full two days of being surrounded by cool toys in a New York City showroom (Target) and walking a giant Walmart store in New Jersey to see what may fly off the shelves on Black Friday. It has also meant talking to the execs responsible for getting that product on the shelves, marketing it on TV and social media and then ensuring it arrives to consumers wherever they want to pick it up. So yeah, it has been a busy couple of days to say the very least, but of course, all very insightful.
Here are some first impressions from everything I have digested. I can't sit here today and say Walmart will beat out Target this holiday season or vice versa so go out and buy one stock as opposed to another. Overall, both companies have brought their A-game this year, more so then last year in my view. Who wins the holiday season may just come down to the mood after the presidential election and who subsequently responds to many well-timed TV ads.
Walmart has won early points for how it's approaching its holiday in-store experience. The retailer is adding tons of "holiday helpers", a new position (aka an investment), whose sole job will be to open needed registers, direct traffic at checkout and help find products for consumers. This will be great from a customer service standpoint. From what I gleaned, Target hasn't added this type of position for the holidays. However, I was impressed when learning Target will have better trained specialists in the electronics department wearing black shirts. Target has to fix its electronics business, so this was a nice first step in achieving that (better products this holiday season will help, too).
It was hard not to be impressed by the toy commitments being made by both Walmart and Target this year. What will be on the shelves seems much more intriguing vs. last year, and there looks to be more of it. That has to be good news for Hasbro (HAS) and Mattel (MAT) from an investment standpoint, although that could change should all hell break out post-election. I would give the edge to Mattel this year -- big push by both major retailers in ethnically diverse Barbie dolls. Hasbro will have its fair share of Star Wars, board games and Nerf gear on offer, but Mattel's offerings really caught my attention.
Growth Seeker portfolio holding Amazon (AMZN) has had a heck of a year. The stock has ripped, results have been solid and Wall Street believes it could do no wrong again. While Amazon will likely have a rock-solid holiday quarter, don't discount Walmart and Target's efforts to improve their online shopping experiences and also use their large stores to their advantage. Walmart, for instance, will have about 20 million items available online this holiday season compared to roughly 8 million last year. It's making it absurdly easy to pick up an order placed online in its stores (or delivered curbside to your car). At Target, it's offering free shipping for online orders and is placing an emphasis on in-store pickup customer service.
Walmart and Target both appear prepared to be more consistently promotional throughout the holidays vs. a year ago. Walmart will tout everyday low prices throughout the holiday season, continuing its message that it's the price leader in the market. Target is more open to discounting (or that's how I took it) as well, for instance giving money back to people on select food purchases. It will hold its 10 days of deals promotion again, too. Not too sure how this -- along with investments being made in people and online shipping -- will weigh on fourth quarter margins for these guys, but in the early going the focus on prices will likely get people spending (barring post-election insanity).