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For this Christmas, all they want is from Amazon

Its dominance over rivals is much more pronounced before the year-end holiday as shoppers rush to buy gifts

Olivia Zimmermann holding last-minute Christmas shopping packages in the doorway of her residence.


OLIVIA Zimmermann started her holiday shopping early this year, buying a Bluetooth speaker from Best Buy for her sister. It was supposed to arrive by Dec 10, two weeks before Christmas.

The speaker never showed up - and the post office said it had delivered the package to a different town. Best Buy apologised and offered to reship it.

But Ms Zimmermann, who works in marketing in Chicago, was over it. "I just want a refund," she told the retailer, and then added: "At this point, I have already ordered from Amazon because I know for a fact it will be here when they say it will."

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Amazon is far and away the leader in e-commerce, outpacing competitors such as Walmart, Target and eBay. But its dominance is never more pronounced than in the nail-biter last-minute sprint before Christmas.

The company, based in Seattle, has had a two-decade-long obsession with shrinking the time from click to doorstep. It has built warehouses in more than 30 states and a sophisticated web of delivery methods, giving it a logistical advantage.

Amazon has used that edge to lead people to expect near-instant gratification that, for a while, only it could deliver. The company built trust in its delivery speed with its Prime membership, which costs US$119 a year and includes two-day shipping.

This year, in the days leading up to Christmas, Amazon's share of online sales will increase by almost 50 per cent - to about half of all digital sales - while most rivals fade, according to the market research firm Rakuten Intelligence.

"Amazon's ability to fulfil more quickly and effectively than competitors has been a key differentiator back to the earliest days," said Kenneth Cassar, an analyst with Rakuten Intelligence, which is an independent subsidiary of the Japanese e-retailer Rakuten.

Traditional retailers still enjoy strong sales when the holiday season begins around Thanksgiving. They advertise widely, luring shoppers with doorbuster deals. The promotions also drive sales to their websites instead of Amazon.

Around Thanksgiving, Amazon's share of online sales can dip to as low as 20 per cent in the United States, according to Rakuten. But as November turns to December, and then into Christmas crunchtime, shoppers' preferences change.

Last year, Walmart and Target had their busiest online traffic of the month on Dec 10. Amazon's was eight days later, on Dec 18, according to an analysis by Griffin Carlborg, a researcher at the digital intelligence firm Gartner L2.

"Amazon has just built up its reputation around rapid fulfilment incredibly well," Mr Carlborg said. "Customers really trust Amazon's fulfilment offerings."

Those shoppers include Carissa Vinovskis, 26, who puts in 12-hour days researching diabetes at Children's Hospital Colorado. She used to shop for Christmas gifts in stores, but as she got busy with graduate school and later her job, she had less time and patience. Panic set in fast in the middle of this month when she realised she had just six days to get presents before visiting her parents.

She found a few cute things on Etsy - "beautiful, handcrafted gifts", she said - and then realised they would take about four weeks to arrive. "I was like, ok, Amazon Prime it is!" she said.

An Amazon spokeswoman pointed to a statement in which the vice-president who runs Prime, Cem Sibay, said, "We keep working to add faster and even more convenient delivery options."

Amazon now has over 110 fulfilment centres in North America, more than 250,000 warehouse employees and dozens of its own planes. It is setting up warehouses that hold tens of millions of items closer to major cities, letting it offer free same-day and one-day shipping on more products. Walmart and others have also made strides in catching the wave of shoppers moving online by making similar delivery promises without the cost of a Prime membership. (In the third quarter, Walmart's online sales rose 43 per cent over the previous year.)

A Google search for the retailer on Wednesday returned "Walmart Last Minute Gifts | Get 'em by Christmas | Free 2-Day Shipping" for the name of the company's home page. These traditional retailers are leveraging their physical stores - a key advantage they have over Amazon - and providing ways for people to order online and pick up in person. That is particularly powerful in the final days before Christmas, when shoppers return to stores.

"The biggest area that we're playing offensive right now is with our stores," Marc Lore, who runs Walmart's US e-commerce business, told investors in October.

Amazon is faster than every major competitor, though other retailers are speeding up. In 2016, Old Navy, which is owned by Gap, took about 10 days to deliver a package ordered during the week after Thanksgiving, Rakuten data shows.

This year, its packages showed up about three days faster. Walmart cut its delivery time from more than a week to six days over the same period. And Best Buy said 80 per cent of its small packages now arrive in two days or under. (Rakuten's data excludes eBay and Etsy because the formats of their electronic receipts are harder to track.)

Yet, most retailers still have to work to win people's trust. Jessica Palazzo, who runs after-school programmes near Hartford, Connecticut, bought her mother pajamas from Old Navy two years ago that were guaranteed to arrive before Christmas, but which didn't appear until January. Old Navy offered her 10 per cent off her next order.

This year on Black Friday, she put a pair of Gap pajamas into her online shopping cart - but then had a change of heart. "That's embarrassing if you come on Christmas and have nothing for somebody," Ms Palazzo said. She ended up buying running socks and a running ear warmer for her mother from Amazon. NYTIMES