- The intense competition in retail over free shipping policies is expected to bring some pain to Q4 margins as big box and e-commerce firms scrap for market share, warn analysts.
- ComScore reports that free delivery on online purchases rose to 68% in 2014, up from 44% last year.
- Amazon (NASDAQ:AMZN): 2014 shipping costs were up 32% through Q3. That mark comes before a holiday season in which the company says it saved customers a mere $2B in shipping fees.
- Wal-Mart (NYSE:WMT): The Bentonville giant has already warned investors it will spend heavily on e-commerce and fulfillment center expansion as it eyes +30% growth in online sales. The company may have difficulty dialing back its free delivery policies, say industry insiders.
- Target (NYSE:TGT): Wolfe Research projects a 1% shift in Target sales to e-commerce cuts into the firm's profit margin by 5 bps.
- What to watch: Online sales rose 16% in Q3 vs. 4% for broad retail, a differential that is expected to have widened in Q4. Retailers with a sharp shift in mix to online could have trouble hitting consensus EPS estimates.
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