News

Amazon beats two big online competitors in prices on back-to-school products

September 2, 2015 04:11 PM
http://www.internetretailer.com/static/uploads/thumbs/shutterstock_82874737_jpg_78x78_crop_q95.jpg

The competition for back-to-school business online intensified in the days leading to the start of classes. And after doing the math on nearly 4,000 products sold online across three of the largest online retailers, price-monitoring firm Profitero found that Amazon.com Inc. offered the lowest prices on back-to-school items across the board, although Walmart.com was close.

Profitero analyzed 3,849 back-to-school items sold on Amazon.com, Target.com, and Walmart.com in the month of July and only in the U.S. for its white paper “Back-to-school Shopping: 2015 E-commerce Trends.” Those items came from six product categories: computers, office furniture, office supplies, office technology, school supplies, and storage and organization. On average, Amazon’s prices were 1% lower than those on Walmart.com, while Target.com’s were 25% higher than Wal-Mart’s. In all but one category (storage and organization), Amazon offered the lowest price on average. Amazon.com Inc. is No. 1 in the Internet Retailer 2015 Top 500 Guide, Wal-Mart Stores Inc. is No. 3 and Target Corp. is No. 16.

Keith Anderson, vice president of strategy and insights at Profitero and the author of the paper, says the company narrowed the list of products to 3,849 from an initial sample set of more than 100,000 items. Price competition was particularly intense in two categories—computers and office technology—and Anderson says the three big retailers likely used those categories to attract shoppers’ attention. “When somebody is on the site, you have the opportunity to cross-sell and cross-merchandise,” he says. “Those are some of the bigger tickets and so you can make a bigger statement if you’re 5% or so below on those.”

There’s good reason for the intensified competition when it comes to pricing on back-to-school items.

A survey by the National Retail Federation shows that the average family with school-age children planned to spend more than $600 on school supplies this year, and 35.6% of all back-to-school shoppers planned to do at least some of their shopping online. A report from market research firm eMarketer shows that the back-to-school season is expected to account for $56.35 billion in online sales, up 14.4% from $49.27 billion last year.

“Back to school is definitely becoming more important,” Anderson says. “It stands out among these holidays because those that are in school are disproportionately shopping online, and so e-commerce is becoming more and more important to those folks.”

Related Article: Amazon beats two big online competitors in prices on back-to-school products

While Target didn’t aggressively compete with Amazon or Wal-Mart on price during the back-to-school shopping season, the retailer offered a shipping sweetener. Target offered free shipping and returns on all purchases regardless of size during the first two weeks of August.

“If you can’t win on price, you might decide, ‘Let’s not compete on price but rather shipping fees,’ which Target did,” Anderson says. “I think that was an effort to deliver value but not compete on price at the item level.”

Internet Retailer reached out to Target to find out why their prices were so much higher than Amazon and Wal-Mart’s. A spokeswoman issued a statement saying that the retailer needs time to review Profitero’s findings.

“We shop other like retailers on a consistent basis to ensure we’re competitive and providing our guests with a great value,” the spokeswoman said. “We’ll be reviewing this study further before providing any additional comment.

 

Back

 

Top Solution Providers

close