Cyber Monday showdown: Wal-Mart closes in on Amazon in online price war

NEW YORK: Wal-Mart Stores Inc is within striking distance of matching Amazon.com Inc’s online prices for the first time, a key milestone in its effort to regain the “low price leader” title.

Wal-Mart has aggressively invested in making its prices more competitive against brick-and-mortar rivals since the start of the year. Now, the shrinking gap is also becoming noticeable across a broad range of product categories online, according to a price study conducted for Reuters, as well as interviews with pricing experts, retail consultants, vendors and company sources.

Prices at Walmart.com are now only 0.3 percent more expensive than Amazon on average, according to the study by retail data analytics firm Market Track, which analyzed prices of 213 products in 11 categories over a period of 700 days ending November 7, 2017.

By comparison, Wal-Mart’s online prices were 3 percent higher than Amazon’s on average in the first 350 days ending November 7, 2016, according to the study. In the popular wearables category, which includes fitness trackers and smart watches, Wal-Mart’s prices are 6.4 percent lower than Amazon this year compared to 12.6 percent higher in the same period a year ago. For sports and outdoor products, Wal-Mart is now 1.3 percent lower versus 3.5 percent higher a year ago.

These findings indicate that Wal-Mart has managed to slash prices online across several product categories consistently, rather than with just temporary discounts. Consistent lower pricing is key to boosting sales throughout the year. On Cyber Monday, the busiest day of the year for internet shopping, online deals and temporary promotions will overshadow pricing for both retail giants.

“We are committed to having online prices that meet or beat prices at other top sites,” said Wal-Mart spokesman Dan Toporek. He said for some items the retailer now displays two prices online to show shoppers when they can get a lower price by picking up their order in a store, but declined to comment further on the company’s pricing strategy.

Amazon spokeswoman Kate Scarpa said nothing has changed in the retailer’s approach to delivering low prices to customers. “Amazon’s prices are as low or lower than any other retailer and we work hard for customers to ensure that’s true every day,” she said, declining to comment further on the retailer’s pricing strategy.

The consistent price cuts are one of several steps Wal-Mart is taking to boost its e-commerce business, including expanding its online offerings, acquiring smaller online retailers such as Jet.com, and offering free-two day shipping. Burt Flickinger, managing director of retail consultancy Strategic Resources Group, conducted his own internal pricing study for clients in Texas last month. His data shows Wal-Mart is closing the gap with Amazon this year compared with a year ago when prices for a range of goods were between 5-12 percent higher at Wal-Mart.

“What we have started seeing recently is Wal-Mart lowering the gap with Amazon to a point where it is a photo finish,” said Flickinger. “Consumers can’t tell the difference anymore.” —Reuters