On-AMZN: Thanksgiving is not even upon us, and the holiday price wars are already heating up. The Wall Street Journal reports that Wal-Mart is testing a program to match prices from online competitors like Amazon. To date, Wal-Mart’s price comparison policy has been for local brick-and-mortars retailers. One of the interesting data points is that “in August, Wal-Mart’s prices dropped to nearly 10% lower than those of Amazon, where prices have been increasing”. This is another sign of a slow shift at Amazon from being a “EDLP” (Everyday Low Price) retailer to a “target-based” pricing retailer where prices can be dynamic and convenience is valued as much as fair prices.
WSJ: Wal-Mart Targets Amazon
By Shelly Banjo
Wal-Mart Stores Inc. is testing a program to match online prices from rivals such as Amazon.com Inc. this holiday season, a move that could make the discounter more competitive but cut into earnings.
Wal-Mart executives are discussing whether to go ahead with the price-matching program, which would expand its one for local brick-and-mortar competitors, according to spokeswoman Deisha Barnett. Under consideration is how much Wal-Mart might lose if the program were to go nationwide, people familiar with the matter said.
Ms. Barnett said the company’s focus is on taking care of customers and said store managers have had discretion to match certain online prices for customers for some time.
Wal-Mart has long resisted matching online prices, even as competitors Best Buy Co. and Target Corp. adopted the practice to keep customers from “showrooming,” or browsing brick-and-mortar stores but subsequently making the purchases at online competitors.