Is being the low price leader critical to Amazon’s ongoing success?
A study finds online prices are on average 13 percent less expensive on Amazon.com than other leading U.S. retailers across 15 categories, narrowing from 14 percent lower in 2021 and 16 percent in 2020.
Profitero’s sixth consecutive annual pricing study analyzed online prices for nearly 15,000 exact-matched products from July to October across 15 categories at 13 retailers.
Amazon had the lowest prices across 14 categories while tying Chewy in the pet category.
Walmart was the second most price competitive with online prices six percent higher than Amazon on average (four percent in 2021). Overall, Walmart is within five percent of Amazon’s online prices in 11 out of the 15 categories, including within two percent in grocery, health and personal care, home furniture, and vitamins and supplements. Comparatively higher-priced categories for Walmart include electronics, fashion, tools and home improvement, and video games.
Among others outside Chewy and Walmart, Petco faired best with its online prices — only two percent higher than Amazon — followed by Nordstrom, five percent higher; Petsmart, six percent; Home Depot, 10 percent; Best Buy, 13 percent; Target, 15 percent; Walgreens, 27 percent; Wayfair, 37 percent; Macy’s 38 percent; and CVS, 53 percent.
Retailers have been raising prices to offset inflationary pressures and Amazon’s profits have lately seen significant erosion amid a post-pandemic slowdown.
A recent Evercore ISI survey data reported by The Wall Street Journal showed the percentage of Amazon customers who report being “extremely” or “very satisfied’ fell this year to 79 percent, recovering from 65 percent during the pandemic but still down from a high of 88 percent nearly a decade ago. The decline was attributed to customer service issues, such as late packages.
A JungleScout survey from earlier this year found Amazon maintaining its e-commerce dominance over Walmart in nearly all categories, although 57 percent of consumers who responded said they are more likely to shop Walmart for groceries, compared with 15 percent for Amazon. JungleScout said Walmart’s grocery preference is “a byproduct of its brick-and-mortar presence and reputation for low prices.”
Still, Consumer Intelligence Research Partners found earlier this year that among Americans who have been Prime members for at least two years, nearly 98 percent keep renewing.
- Profitero reveals lowest-priced U.S. retailers heading into the holidays – Profitero
- Amazon’s Customer Satisfaction Slips With Shoppers – The Wall Street Journal
- Amazon vs. Walmart: The Growth & Future of Ecommerce – JungleScout
- Amazon layoffs could make its customer experience problem worse – Insider Intelligence
- Walmart’s customers love its low prices but still have gripes – RetailWire
DISCUSSION QUESTIONS: Is price still the primary reason consumers choose to shop on Amazon? Is being the low price leader critical to Amazon’s ongoing success?