In pandemic Christmas, US rivals aim to challenge Amazon under the tree

Walmart, Best Buy and hundreds of smaller retailers are bolstering their online gift features, hoping to challenge Amazon.com Inc's dominance as a seller of holiday gifts to homebound shoppers.

The new services seek to take some of the drudgery out of gift-giving. The features let consumers purchase a present online and have it delivered to the recipient with, for example, the retailer handling wrapping, a personal message or a receipt that does not show the gift's price.

Amazon's rivals have tried to chip away at its online preeminence, spending millions to fulfil orders faster, expand product catalogues and, in some cases, provide free shipping and even subscription services. But the first holiday sales season with widespread coronavirus has drawn attention to a previously overlooked battlefront: gift-giving.

Consumers flocked to Walmart and other retailers early in the pandemic when Amazon was at times slow to deliver essentials including toilet paper. Now, Amazon competitors see another opportunity to seize market share.

"This is an area of opportunity where smaller or large retailers could differentiate given most consumers will be doing their holiday shopping online this year," said Bobby Figueroa, who worked for Amazon's ad sales unit before founding retail analytics startup Gradient.

Walmart.com on Oct. 28 added a "gift eligible" label on hundreds of thousands of U.S. product pages, including for toilet paper, a status previously not displayed until checkout. Gift eligible means Walmart can send gift receipts as well as let shoppers customize an email greeting. It will also ship the item in its boxes, concealing manufacturer packaging.

With gift-giving already up over last year, Walmart increased inventory of laptops, loungewear and exercise equipment ahead of the holidays. Shoppers can search specifically for only gift-eligible items for the first time.

BestBuy.com in mid-October added an option for gift receipts with store pickups. It also started allowing shoppers to arrange for Best Buy to email gift recipients with a festive greeting on the same day items are delivered.

Estee Lauder Companies Inc this year is using technology from startup SmartGift that added options across five of its websites for shoppers to designate cosmetics and other items as gifts while letting recipients select colour, size or scent before shipping.

Americans will spend $160 billion on gifts during the current quarter, up 5 per cent from a year ago as people put savings from skipped outings into celebrating Christmas and other year-end holidays, according to industry analyst Coresight Research.

Adobe Inc's e-commerce software unit Magento expects Americans to ship 67 per cent more holiday gifts than a year ago and to 18 per cent more recipients as travel gets curbed.

But Coresight still expects Amazon.com to capture 18 per cent of gift purchases and 7.2 per cent of overall US retail sales, up from 14 per cent of gift purchases and 5.6 per cent of total sales in 2019.

Amazon has maintained its dominance as the entire e-commerce industry thrives in the pandemic. Amazon's product sales rose 32 per cent this year through September, nearly 2-1/2 times the rate over the same period last year.

It pushed its annual sales event Prime Day to October from July as an early start to holiday shopping, and it brought forward the release of its annual guide of potential gifts to just before. The guide, which included new sections for items from small and Black-owned businesses, was Amazon's largest ever.

The company has long provided basic gift features. It charges several dollars to gift-wrap shipments, and a free message of up to 240 characters per item can be printed on black-and-white gift receipts. A year ago, it started offering emailed gift receipts for some items.