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Walmart’s online prices drive customers to its supercenters

Written by George Anderson

Photo: Walmart

Walmart, as Marc Lore, head of the retailer’s U.S. e-commerce operations, has noted, has a “maniacal focus” on its customers and “finding ways to offer them low prices — every day.” For shoppers on walmart.com, that focus means being able to find prices that are increasingly in line with Amazon.com. Earlier this year, Walmart added another benefit for price-conscious shoppers by offering discounts on items ordered online and picked up in stores. The “Pickup Discount” is typically between three and five percent. A recent Wall Street Journal report, citing unnamed sources, says Walmart has begun raising some online prices and adding in-store price tags next to items on its site so shoppers can see the comparison. The intent is to drive traffic to stores, whether that means click and collect transactions or shoppers skipping online orders and heading out to their nearest supercenter. In the end, getting more shoppers to stores means higher profits for Walmart as it reduces the expense associated with home delivery. The retailer offers free two-day delivery on purchases of $35 or more. “We always work to offer the best price online relative to other sites,” a Walmart spokesperson told the Journal. “It simply costs less to sell some items in stores. Customers can access those store prices online when they choose to pick up the item in store.” Recently released research from Profitero shows that Walmart has cut the price gap with Amazon in recent years. In 2014, Walmart’s online prices were nine percent higher on average than Amazon. In its most recent comparison, the ecommerce analytics firm found that the difference had shrunk to under three percent. Walmart has lower prices than Amazon in categories including beauty, where it went from being 10 percent higher to one percent lower than its larger online rival. For its part, Amazon appears set to compete on price through the holidays. It was recently reported that the e-tail giant has been lowering prices on items in key categories and displaying a “Discount provided by Amazon” tag.

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