With its slew of recent acquisitions and push to rapidly increase the number of SKUs available on Walmart.com, Wal-Mart Stores Inc., No. 3 in the just-released Internet Retailer 2017 Top 500, is making a major push to boost its online sales.
Experts say one way that it aims to chip away at Amazon.com Inc.’s online lead is by offering consumers a better deal than the e-commerce giant. That’s why it one-upped Amazon by introducing free two-day shipping of select products for orders that are at least $35 (Amazon responded in May by lowering its free shipping threshold to $25, however it doesn’t guarantee delivery within two days) and why it has focused on value with initiatives like Pickup Discount, which offers shoppers reduced prices on “several hundred thousand” items sold only online if they pick them up in a Wal-Mart store.
“Amazon hasn’t captured the value-oriented customer,” says Scot Wingo, chairman of ChannelAdvisor Corp., which helps retailers sell on online marketplaces such as those operated by Wal-Mart and Amazon. “Wal-Mart wants to fill that niche.”
That means pricing is particularly important to Wal-Mart. And, based on two studies conducted exclusively for Internet Retailer, it’s clear Walmart.com’s prices are competitive, even if they’re not necessarily the lowest online.
For instance, Market Track LLC compared the average daily online price of 140 electronics products on Walmart.com, Target.com, BestBuy.com and Amazon.com from Nov. 16, 2016, to May 14, 2017. On average, Walmart.com offered prices 12% lower than Target.com over the full six-month period, roughly the same prices as BestBuy.com and prices that were 2% higher than Amazon.com.
However, the prices were similar enough that they shouldn’t make much of a difference, says Traci Gregorski, senior vice president of marketing at Market Track. “Price is no longer a differentiator—it’s the cost of entry,” she says.
Another analysis, by Boomerang Commerce, compared the prices of Walmart.com’s 100 best-selling SKUs across electronics, home improvement and clothing on a single date, May 16, to Amazon.com (both items the online retailer sold and those sold by its marketplace sellers), Target.com and Jet.com. The analysis found that, at least for its top-selling products, Walmart.com often offered shoppers the best deal.
[infogram id=”walmarts_prices_vs_rivals” prefix=”ZfH” format=”interactive” title=”Walmart’s prices vs rivals”]
“Wal-Mart is incredibly competitive on its best-selling products,” says Michelle Ai, Boomerang’s manager of marketing and strategic projects.
Click here to read “Wal-Mart’s e-commerce strategy comes into focus” from the June issue of Internet Retailer. Click here to subscribe to the magazine or sign up here for a Strategy membership to access the story online.