Walmart and Target take different approaches to Amazon’s Prime Day

Discussion
Back-to-school promos from Target (left) and Walmart (right) - Photos: Target; Walmart
Jul 08, 2022

Walmart will not be launching a special sales promotion next week to match Amazon.com’s Prime Day.

The retailer, CNBC reports, doesn’t see the need as it has been running clearance sales and rolling back prices on large numbers of items as it attempts to reduce overstocks and optimize its inventory levels.

“You go in stores now, it’s almost like Prime Day in some of these categories,” Rupesh Parikh, a senior analyst for Oppenheimer & Co., told CNBC.

The chain is currently promoting back-to-school deals, featuring discounted merchandise in apparel, electronics, furniture and supplies. The retailer said that consumers are shopping for back-to-school earlier this year with a focus on finding deals to stretch their budgets during inflationary times.

Walmart is also looking to make it easier for teachers to have what they need for their classrooms heading into the new school year. The retailer’s online classroom registry enables teachers to build and share a wish list of items that will help them create a more meaningful learning environment for their students.

Target, like Walmart, is also promoting special deals for students and teachers. Unlike its larger rival, however, it is also running a sales event that will vie for consumers’ attention at the same time as Prime Day.

The retailer said it is offering low prices on back-to-school goods and a one-time discount of 20 percent on any item for college students through its Target Circle rewards program. Target is also extending its Teacher Prep Event, which gives educators a 15 percent discount on supplies, for nearly six more weeks than last year. Teachers can take advantage of this offer between July 17 and September 10.

Target is bringing back its annual “Deal Days” sales promotion event with discounts on “thousands of items” across the store from July 11 to 13. The retailer, like Walmart, has been aggressively discounting merchandise to move out excess inventory that has cut into profits margins.

“We know guests look forward to Target Deal Days every year. With this year’s event being our biggest ever, guests can shop more incredible deals and items, with three full days to save on must-have products that will bring them joy all summer and beyond,” Christina Hennington, executive vice president and chief growth officer, Target, said in a statement.

DISCUSSION QUESTIONS: Do you think retailers should run head-to-head events with Prime Day as Target is doing or take a page from Walmart’s plan? Are July sales events more important or less so for retailers this year compared to years past?

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"What I like about the Walmart and Target plans is that they fit each retailer’s particular needs without cutting the margins to fight a losing battle with Amazon."
"I like it. Why play by Amazon’s rules and let them set the agenda?"

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11 Comments on "Walmart and Target take different approaches to Amazon’s Prime Day"


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Mark Ryski
BrainTrust

All retailers have their foot on the gas, pushing hard to reduce excess inventory and boost top-line sales in order to generate more gross margin dollars as inflation impacts profit margins. In today’s climate, every retailer that is over-inventoried is (or should be) focused on executing to clear stock. As a result, they’re focusing less on Prime Day and other competitors. July sales events are just that, sales events. However this year July clearance sales have taken on a whole new tone.

Gene Detroyer
BrainTrust

What I like about the Walmart and Target plans is that they fit each retailer’s particular needs without cutting the margins to fight a losing battle with Amazon.

Gary Sankary
BrainTrust

I don’t think retailers are as worried about Prime Day as they’ve been in the past. Walmart and Target, in particular, have done a great job driving customer engagement during the pandemic; that’s the best defense against competitive disruption. I also believe that a lot of the hype around Prime Day has worn off. I think Target and Walmart are right not to waste promotional air time trying to defend something that I suspect won’t be a big deal.

Jeff Sward
BrainTrust
The real assignment for any retailer right now is to sell through the on-hand and on-order inventory as profitably as possible while building brand integrity. They can’t get drawn into every price promotion that Amazon throws out there. I was in Target yesterday and they looked downright light in inventory. If I hadn’t been reading about their “overstocks” for weeks I would never have known. I was actually shocked at the number of lightly inventoried fixtures. Target’s aggressive actions appear to have made a dent in their problem inventories and I have to salute the fact they they didn’t wait. Maybe the floors will get beefed up again for Deal Days. Meanwhile, Target’s strategy seems to be serving them well. I think Walmart likes its position as an everyday low price leader. They don’t need a special event to make that point. Walmart is taking its own path by focusing on back-to-school as a traffic generator. Sounds smart to me. I think both Walmart and Target are deeply, keenly aware of the competitive game they… Read more »
Dave Bruno
BrainTrust

Interesting times. Before this year I would have thought Prime Day had created a movement in retail that was leading to a new summer shopping “season” across the industry. Now, after we have seen (and discussed here on RetailWire) Amazon’s pull back on its own Prime Day marketing and deals, and Walmart pulling back, perhaps the momentum is fading?

Ananda Chakravarty
BrainTrust

I don’t think retailers are (or can be) running head to head with Amazon’s Prime Day. Retailers have other issues on their hands such as leveraging their own promotional strategies to move goods. Smart retailers don’t take their cues from Amazon. Prime Day had devolved into Prime week, a Prime season and perhaps a Prime year – and none of that is worthy of retail following a race to the bottom. The marketing around Prime Day has simmered on all fronts. July sales remain important, to reduce excess inventory and clear a path for a profitable second half of 2022.

Shep Hyken
BrainTrust

If every time a competitor has a sale or drops their price all you do is copy them, it’s just playing catch-up to keep up with the competition. Walmart and Target have their own strategy to build a loyal customer base, just as Amazon does. It includes various promotions and sales that are unique to their brands. Here’s a big question: does any retailer want to go head to head with major brands like Amazon, Walmart, and Target? (That’s a rhetorical question!)

Patricia Vekich Waldron
Staff

Target and Walmart are smart to implement strategies that meet demand and margin goals, especially when Prime Day seems to be losing steam.

Joel Rubinson
BrainTrust

I like it. Why play by Amazon’s rules and let them set the agenda? You have your own pricing and promotion strategies in place and let them respond to YOU.

Richard J. George, Ph.D.
BrainTrust

A major shortcoming of any head to head confrontation, think heavyweight boxing, is that one or more parties may end up bloodied. In such a scenario the referee normally raises the hand of the battered winner. Instead of saying “the winner is…” a more appropriate comment might be “the person who lost least.”

The physical stores operated by Walmart and Target give them the opportunity to operate in a battlefield devoid of Amazon. There’s no doubt excessive inventory mandates some promotion this summer. The key is to profitability clear warehouses of these products. Walmart and Target can win without playing Amazon’s game.

James Tenser
BrainTrust

It’s great that major retailers are defining their own promotional strategies for the current summer season. Walmart, Target, and other savvy retailers should not be parroting Amazon’s tactics. Not now. Not ever.
Back-to-school has long been a perennial July opportunity for mass retailers. That should not change, regardless of Amazon’s Prime Day activities.

Of course the wrinkle this year is the urgent need to sell down excess inventory. TV consumer reporters have been touting the discounts for weeks now, and I get the feeling that the hype will motivate those shoppers who have the financial flexibility.

wpDiscuz
Braintrust
"What I like about the Walmart and Target plans is that they fit each retailer’s particular needs without cutting the margins to fight a losing battle with Amazon."
"I like it. Why play by Amazon’s rules and let them set the agenda?"

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