Amazon Stock Faces an Uphill Task This Black Friday
Amazon.com, Inc. (NASDAQ:AMZN) has been the top gainer in the past on big retail events like Black Friday, but this trend may change this year. The sentiment for Amazon stock had turned bearish since Donald Trump won the election on November 8. The company really needs a heavy dose of good news from this holiday season. Will AMZN stock get lucky this time?
Let’s take its popular smart speaker, “Amazon Echo,” for example. After last year’s shopping weekend, Amazon.com had announced that this was the best ever sales for Amazon devices. The company reported that Amazon Echo was the No. 1 best seller across all $100+ products on Amazon.com, on its first Black Friday.
But a lot has changed since November 2015. Companies like Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL)—also known as Google—launched new products, including Google’s own smart speaker called “Google Home.” And this Black Friday, Google hardware is being offered at attractive discounts, as many retailers have slashed the prices. At the discounted price of $99.00, from the original $129.00, Google Home is likely to steal the spotlight from Amazon Echo, which is selling at a deal price of $139.99 instead of the usual $179.99.
Other competitors have also upped the ante. As per the latest reports, brick-and-mortar chains like Wal-Mart Stores, Inc. (NYSE:WMT) and Target Corporation (NYSE:TGT) are offering larger price cuts than in 2015. As per a Market Track study of holiday circulars, Wal-Mart is offering an average discount of 39%, compared with 35% last year. At Target, the price cuts grew to 38% from 36%.
These stores are also luring customers toward online deals, rather than just physical stores. Wal-Mart has tripled its e-commerce selection to 23 million products this year, aiming to better compete with Amazon. (Source: “Holiday Price War Intensifies as Wal-Mart, Target Pursue Amazon,” Bloomberg, November 25, 2016.)
The Bottom Line on Amazon Stock
This is a race towards capturing bigger market share, and the competition is more fierce this time than in 2015. Amazon may not be that clear a winner this Black Friday, as other retailers woo customers with attractive deals and offers. However, Amazon’s online platform and “Prime” perks are difficult to beat. As customers continue their hunt for better deals and bargains this holiday weekend, AMZN stock may have to wait a little longer for some good news.
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