The change in the shopping habits and financial strains among the Americans has caused the retailers uneven fortune. This has led to traditional consumer companies such Wal-Mart and Mattel to struggle due to uncertain economy forcing the Americans to shop cautiously. As the traditional retailers struggle, Amazon has tremendously grown as more people are shopping online.
This trend of online shopping was clearly realized during the pivotal holiday. This is a shopping season that begins in November to December and it is believed that retailers during this time make about 40 percent of their annual revenue. The government data showed that spending increased and was fastest for the last 3 years in this year from October to December.
The trends shows exactly where and how the Americans spent their money fewer people spent their money in the stores as the majority shopped online.
A research conducted by shopper trak showed that the sales at the stores had just risen by 2.7 percent to $265.9 billion in November to December well as comscore a research firm showed that online shopping went up by 10 percent to$46.5 billion. Shopper trak also said that the number of customers had reduced in the stores by 14.6 percent.
The result of Mattel, as announced on Friday was very disappointing in the fourth quarter which included the holiday shopping season. The result missed both the analyst and the company’s expectation. Mattel which is the largest company that makes toys reported that the poor results were due to weak sales of Barbie and other toys.
Wal-Mart which is the largest retailer in the world is also experiencing such disappointing results even in the holiday shopping season. Its chief financial officer blamed the federal government’s reduction in supplemental nutrition assistance program, which he claims had more impact than expected.
Because of the devastating holiday season Wal-Mart is among the 33 major retailers lowering their outlook in the fourth quarter and maybe further into 2014. Both Wal-Mart and Mattel’s shares went down. By the morning Wal-Mart shares ended flat as Mattel shares fell by 12 percent.
On the other hand Amazon the largest online retailer announced that there was increase both in their profit and revenue in the fourth quarter even though they did not hit the Wall Street expectation which saw their shares go down 11 percent.
Amazon may be experiencing different challenges than its competitors and they say there results were affected by its rising costs. Therefore its main concern is to balance the operating costs with revenue growth and it’s looking into raising the prime membership fee.