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Business

November 4, 2012

A virtual retail war

Bricks-and-mortar merchants battle online competitors for holiday dollars

The battle is on between bricks-and-mortar retailers and their increasingly potent Internet adversaries.

Frustrated by once-loyal customers who have been wooed away by online merchants, retailers are gearing up with new weapons to stop the continuous flow of shoppers from stores to computers and smartphones.

With the holiday season approaching, some chains are vowing to match prices with their biggest online rivals. Others are offering free layaway and expanding their assortment of unique products or adding Wi-Fi and other digital upgrades inside stores to entice tech-savvy shoppers. There’s even increasing talk about same-day deliveries.

“We think we have a huge advantage over Internet-only companies,” Toys R Us Inc. Chief Executive Jerry Storch said in an interview. “Every possible way the customer wants to use the Internet — or their neighborhood store — to interact with Toys R Us is available. The customer can choose how to do business with us.”

Online merchants say they are ready to fight. Nearly a quarter of shoppers say they’ll go online to do most of their holiday shopping this year, according to a survey from consulting firm Deloitte, and 75 percent said they expect to buy at least one item online this season. But Web retailers said they sense the competition with traditional retailers and are busy as well, kicking off their holiday ads before Halloween and expanding free shipping and other promotions.

Amazon.com Inc., the nation’s largest online retailer, has geared up.

“Every year we want to offer great deals,” spokeswoman Pia Arthur said. “We will have fun types of things going on for the holidays.”

It’s always a high-stakes competition for the retail dollar, and experts say this year it’s more intense than ever. And no wonder: Merchants rake in an estimated 25 percent to 40 percent of their annual sales in the last two months of the year. Shoppers this year will drop an estimated $586.1 billion during the holidays, according to the National Retail Federation.

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