Brick-and-mortar stores and Amazon face off

Amazon.com has been quietly developing an online grocery Amazon.com has been quietly developing an online grocery business for years and is planning a major rollout, according to sources. (Sept. 6, 2012) Photo Credit: Getty Images

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This holiday season, it's Amazon vs. everyone else.

The online giant has attracted customers from the likes of Wal-Mart and Best Buy with low prices and convenient shipping. Now, stores are fighting back and going head-to-head with Amazon during the busiest shopping period of the year.

Stores are doing things like matching prices on Amazon.com and offering the same discounts in stores as on their websites. Amazon is giving customers the option to pick up items at physical locations and adding Sunday delivery.

There's a lot at stake for both sides. Amazon has built a following, but wants to grow its business globally. Meanwhile, brick-and-mortar retailers struggle to keep shoppers from using their stores as showrooms to test out and try on items before buying them cheaper on Amazon.

The holiday season ups the ante. Online and brick-and-mortar retailers can make up to 40 percent of their annual revenue in November and December.

Holiday sales are expected to rise 3.9 percent to $602.1 billion, according to The National Retail Federation. Of that, about $78.7 billion is expected to be online, up 15 percent from last year, according to Forrester Research.

Ultimately, experts say the battle is over customer service. StellaService, which tracks customer service, found between August and October the time to talk to a live agent on Amazon customer service was one minute, compared with two minutes-plus at Best Buy and six minutes at Staples.

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"Online retailers have put so much pressure on brick-and-mortar stores," said Marshal Cohen, chief retail analyst at market researcher The NPD Group, in Port Washington. "Brick-and-mortar retailers are trying to make people feel like the store cares again."

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