The holiday season is very crucial for retailers and especially for Wal-Mart Stores Inc. WMT, as the retailer is facing severe challenges and showing signs of acute weakness. Therefore, in order to attract holiday shoppers, the retail giant planned a new strategy for Black Friday. For the first time, Wal-Mart offered Black Friday deals online on Walmart.com from 12:01 a.m. on Thanksgiving. Then at 6 p.m. on Thanksgiving, the deals were offered at stores.
However, its plans to offer deals online were jeopardized as Wal-Mart's website faced major problems on Thursday due to an overwhelming surge in traffic. Customers who were hoping to get deep discounts were furious due to website delays. Some of them said that their orders were unexpectedly canceled by Wal-Mart after they had already checked out. As a result, many of the disappointed customers shared their experiences on Walmart's Facebook page.
Wal-Mart responded to many of the complaints and even apologized for this occurrence. Wal-Mart told Business Insider that a majority of customers checked out successfully. However, we believe it was a disappointing experience for many and must have adversely impacted Black Friday sales.
Wal-Mart had offered great savings on products that are in huge demand including televisions, video game consoles and small home appliances in stores and on Walmart.com.
The company’s top deals included items like fitness wearables, more than 1 million televisions, more than 100 video games, video game console bundles, 800 DVDs and Blu-ray movies, home appliances, toy drones, bed sheet sets and more. In addition, the company offered online deals on Samsung 60” 4K Ultra HDTV, RCA 7” Tablet 16GB w/ Keyboard, Dell Black 15.6” Intel i3 Laptop, 7’ My First Trampoline, and Star Wars Stereo Gaming Headset that started on Thanksgiving.
We note that Wal-Mart has been posting disappointing results due to sluggish U.S. sales. It is also facing intense competition on all fronts, ranging from dollar stores to the traditional grocery store chains and online business. Its international operations are also under pressure with a stronger dollar eating into sales.
At the same time, Wal-Mart projects slower growth in new stores. Price competition is one of the reasons for the deceleration. Wal-Mart is finding it difficult to compete with local grocers in some markets, which compelled it to scale back expansion plans for smaller stores. Wal-Mart also expects to incur huge e-commerce expenses over the near term.
Higher labor costs along with the company’s efforts to overhaul its stores and invest in its online operations are weighing on its earnings.
Now the company is hoping to satisfy customers through its Cyber Monday deals. Wal-Mart Cyber Monday deals were made available from Sunday, 8 p.m. ET. The company promised lower prices and rollbacks on gifts and everyday essentials for the entire season.
Not only Wal-Mart, other retailers including Target Corp. TGT, J. C. Penney Company, Inc. JCP, Kohl's Corp. KSS are also counting on the holiday season to attract shoppers, following a slow start to November as a result of unfavorable weather and a lack of innovation in apparels.
Wal-Mart has a Zacks Rank #3 (Hold).
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