"The success of Prime Day in recent years has led other retailers to capitalize by offering their own promotions," Jefferies analyst Brent Thill noted on Sunday evening. "Notable competitive offerings are now available at Walmart (WMT) , Target (TGT) , and eBay (EBAY) ."
Happy Summer Christmas*, Earth!
Today is for YOU. You've been Good Enough to deserve a little something, just for you. Remember: Gift yourself first. Bc you've earned it.
This is going to be the biggest, best SC EVER.
(*No religious affiliation implied or required) pic.twitter.com/FyesQfOrlh— Jeff Macke (@JeffMacke) July 15, 2019
In any event, the trend is good for consumers and likely positive for investors in each of the participating names that can catch onto Jeff Bezos' coattails in the traditionally slow summer sales season, especially as the consumer remains confident, according to Goldman Sachs.
"The fact that Target matched Amazon's efforts with their own two day "Deal Days" event, and that Walmart moved ahead with a three-day online sale that began on Sunday has made the early part of this week seem almost festive," Stephen "Sarge" Guilfyole noted in his Market Recon column. "All three of these retail heavyweights will react early and probably with some impact as numbers trickle out to the public."
Aside from Target, the reaction on the day has reflected his initial suspicions.
So, who's set to emerge as the real winner on the day(s)?
The key differentiators for Amazon in Thill's opinion is its fast shipping and advertising into the holiday. Additionally, the entire holiday is built around its marketing and has become much celebrated in media circles.
The brilliance of Amazon and Alibaba is that they somehow got the media to promote to the point of almost celebrating their annual "sales" as if they are really something special. Which they are not. No more special than Nordstrom's Anniversary sale, which is on as we speak.— Herb Greenberg (@herbgreenberg) July 15, 2019
The convenience separates it from its tag-along peers and promotes its pickup of recurring revenue from Prime services for consumers content with the quick service as well. Walmart, for example, does not get the benefit of memberships in its own push to next-day shipping.
However, with the introduction of next day shipping at Walmart the battle may be murkier than anticipated in terms of convenience. Further, the larger ticket items offered at Best Buy, alongside its famous support staff, might allow it some headroom into some of Amazon's more popular items as well.
Others may indeed benefit from consumers unhappy with Amazon corporate practices as well. As Walmart is rarely seen as the "good guy" in the minds of those eager to avoid Amazon, the socially conscious, but still FOMO-stricken crowd may fall to Macy's or Target.
Still, the sales online from Target or Macy's truly pale in comparison to Amazon. For example, Target did $5 billion in total online sales in 2018. Amazon is expected to do at least $1 billion more than that in two days.
While a nice bump in online sales this week will help Target's base of sales in a more outsized way, it really does not compare to Amazon's dominance of the online arena. The smaller retailers will also field questions about margins given their less-developed online base and the need to compete with super low prices from Amazon this week.
"Those of us who are on Amazon every single day are going to be shocked by the values," Action Alerts PLUS portfolio manager Jim Cramer commented on Monday morning. "The prices that they offer are unbeatable."
With that in mind, the race to the bottom will be a major factor on the market's mind moving forward.
Despite this pole position, Cramer advised investors to wait until the dust settles into a more attractive range for a buying opportunity.
"I did say that Amazon should be sold into Prime Day...that's going to prove to be right," he concluded. "You have to wait until maybe it moves under $2000 [per share]...Amazon has had quite a move on Prime Day and you have to let that be repealed along with the rest of the FANG stocks."
In other words, no stock in the bunch is a bargain quite yet, but investors can bide their time to find that sale price when it surfaces for the stalwart in e-commerce.
After reversing its trajectory at mid-day, the stock is teetering back towards that very point and could be a pivotal play for investors that missed out on the recent run in just a matter of days or even hours.