Amazon.com (AMZN) Prime Day Trumps Retailers' Free Shipping, Cowen Analyst Tells CNBC
NEW YORK (TheStreet) -- As Amazon.com's (AMZN) - Get Report exclusive second-annual Prime Day deals are estimated to reel in double the sales from last year, other retail giants are offering free shipping options to combat the competition, CNBC's Sara Eisen reported on "Squawk on the Street" Tuesday.
This move by retailers such as Walmart (WMT), Target (TGT) and Kohl's (KSS) is "probably a first step in the right direction but Amazon has created some very, very powerful fly wheels with Prime and that's very hard to change," Cowen's John Blackledge commented on CNBC.
Not only does Prime Day offer free two-day shipping on physical products, but customers also receive free music, movies and e-books "so they've really created a very powerful force behind Prime," he continued.
"Free shipping alone, I don't think is going to cause people to jump from Amazon to go to Walmart, or to go to Kohl's. Maybe if you're on the fringe and you're not part of Amazon Prime and you really love Walmart, you might take advantage of it but I don't think it's going to take significant share from Prime," Blackledge argued.
This is the second year Amazon has offered 100,000 low-discount deals, to Prime members only, in an effort to get more users to sign up for the exclusive subscription.
Last year's Prime Day brought in an estimated $375 million to $400 million in revenue, while MKM Partners expects today's sales to double those numbers.
Shares of Amazon are falling by 0.28% to $751.70 in early afternoon trading.
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Separately, TheStreet Ratings rated Amazon as a "buy" with a score of B-.
This is driven by a few notable strengths, which can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, robust revenue growth, expanding profit margins and solid stock price performance. TheStreet Ratings feels its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: AMZN