This holiday shopping season, it’s Amazon vs. everyone else.

By (AP)

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Published: Thu 28 Nov 2013, 11:12 AM

Last updated: Sat 4 Apr 2015, 9:20 AM

Shoppers enter a Best Buy in New York.- AP

The online giant has attracted customers from the likes of Wal-Mart and Best Buy with low prices and convenient shipping. Now, physical stores are fighting back and going head-to-head with Amazon as the contest for customers heats up during the busiest shopping period of the year.

Stores are doing things like matching the lower prices on Amazon.com and offering the same discounts in stores as on their web sites. For its part, Amazon is giving customers the option to pick up items at physical locations and adding Sunday delivery.

There’s a lot at stake for both sides. Amazon has built a following, but wants to grow its business globally. Meanwhile, brick-and-mortar retailers struggle to keep shoppers from using their stores as showrooms to test out and try on items before buying them cheaper on Amazon.

The holiday season ups the ante. Both online and traditional retailers can make up to 40 percent of their annual revenue in November and December. And this year, they’re competing for the growing number of shoppers who’re as comfortable buying online as in stores.

Holiday sales are expected to rise 3.9 percent to $602.1 billion, according to The National Retail Federation. Of that, about $78.7 billion is expected to be online, up 15 percent from last year, according to Forrester Research.

Here’s how the fight is playing out:

Price war

One of Amazon’s biggest advantages is its low prices. It can charge less for everything from TVs to T-shirts because it doesn’t have the high costs of running physical locations.

Last year, some retailers offered to match the lower prices that customers find on websites like Amazon during the holiday season. And this year, more have made this a policy heading into the holiday season. Electronics retailer Best Buy even is offering to refund the difference if a customer finds a lower price after they purchase something up until Christmas Eve. The strategy could eat into profits, but retailers hope there will be an increase in sales.

Speedy delivery

Stores had long seen their physical locations as an albatross, but now, a growing number are using them to their advantage.

“Everybody was telling me ... ‘these stores, that’s really a liability that you have,’” said Hubert Joly, Best Buy’s CEO. “Absolutely not. It’s an asset that you have 1,000 warehouses strategically located close to the customers.”

Best Buy is among the retailers using their locations as distribution hubs from which they can ship goods that customers’ order directly to their homes. Wal-Mart, for one, said items ordered online and shipped from stores usually are delivered in two days or less — quicker than having items shipped from warehouses across the country.

But Amazon.com Inc. is widening its distribution network to offer speedier delivery, too. The online retailer added 8 million square feet of distribution centres and hired 70,000 people to work in them. It also added 1,382 robots to its line to help get packages out the door. And for even faster service this holiday, Amazon partnered with the US Post Office to deliver some packages on Sunday.

“This year we’re able to be faster and have more in-stock items,” said Amazon spokeswoman Julie Law.