Prime Day is Amazon.com, Inc.’s (AMZN Quick QuoteAMZN - Free Report) annual shopping event, which typically occurs during the summer season. Summer months tend to witness a decline in sales, and the shopping carnival is prearranged to boost the company’s top line. However, the scenario completely changed this year due to the coronavirus outbreak. Prime Day got deferred and will now run on Oct 13-14.

 

For Amazon, the Prime Day event unofficially kicks off the holiday shopping season this year, and the e-commerce giant is leaving no stones unturned to lure traffic. Amazon anticipates huge demand for home appliances, consumer essentials and winter garments, to name a few, and is offering tempting deals to lure shoppers. With the current home confinement situation, customers are expected to visit Amazon’s online shopping platform as most are avoiding brick-and-mortar stores in the fear of catching the virus. Reflective of this, U.S. shopping malls have seen their numbers drop from 66% in July to 57% in September, per Coresight Research.

 

Coresight Research further confirmed that nearly 48% of U.S. consumers are likely to shop on Amazon.com during the Prime Day event this year and spend around $8 billion. This suggests a rise from an estimated $6 billion spent last year. Episerver, a software company, added that 52% of U.S. consumers are willing to begin their holiday shopping at Amazon. 

 

Meanwhile, eMarketer noted that Amazon’s revenues during this year’s Prime Day event will touch $9.91 billion, calling for an uptick of 43% from last year’s event. Obviously, Amazon’s shareholders are pretty  pumped up about this, with the company’s shares jumping 4.8% on Oct 12, with Jeff Bezos’ worth crossing $200 billion again. Interestingly, Amazon’s shares have already rallied 86.3% so far this year.

 

 

 

Meanwhile, a number of big-box retailers are prepping to steal Amazon’s thunder on this year’s Prime Day event. Here, big-box retailers have the disadvantage of having huge retail store establishments, with people confined to their homes due to the pandemic.

 

So, how they are preparing to take on Amazon? Primarily, they are spicing up their own online space by promoting products, providing big deals and improving supply chains with the help of technology. Let us take a look at a couple of them and figure out why they are compelling buys now –

Walmart Inc. (WMT Quick QuoteWMT - Free Report) is no longer a traditional brick-and-mortar retailer. It has evolved as an omnichannel retailer and has made significant investments in online e-commerce platforms like Flipkart. Walmart has not only showcased an array of online deals ahead of the holiday shopping season but had also launched its Big Sale Event well ahead of Amazon Prime Day. The event will last till Oct 15.

 

The largest retailer in the world is hiring a greater number of employees to cater to the soaring consumer demand. Notably, its e-commerce platform has also been contributing to its comparable store sales of late.

 

Walmart has a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current-year earnings has moved up 8.5% over the past 60 days. The company’s expected earnings growth rate for the current and next year is 8.5% and 5.6%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Target Corporation (TGT Quick QuoteTGT - Free Report) has also evolved from a brick-and-mortar retailer to an omni-channel unit. It has improved its website, mobile apps and modernized its supply chain to keep pace with the ever-changing retail landscape. 

 

Target too has entered the big sale and promotion battle of the holiday shopping season by announcing “Deal Days” that will run through Oct 13-14. It is also offering curbside pickup, which should boost Deal Days sales.

 

Like Walmart, Target aims at hiring a significant number of seasonal workers for packing and sending items to customers. By the way, Target has put up solid comparable sales performance in the last 13 quarters, and an encouraging holiday shopping season will only improve the sales numbers. 

 

Target has a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for its current-year earnings has risen 44.2% over the past 60 days. The company’s expected earnings growth rate for the current and next year is 11.9% and 7.6%, respectively.

 

For the meantime, on year-to-date basis, shares of Walmart and Target have gained 21.4% and 28.4%, respectively. Take a look – 

 

 

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