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Walmart.com gives Amazon stronger holiday competition

November 28, 2016 01:56 PM
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Walmart.com is providing Amazon.com Inc. with a stronger run for consumers’ holiday money this year than it has in the past.

The e-commerce site of Wal-Mart Stores Inc. has more top-selling toys and electronics products in stock this year than last year, and its prices are highly competitive with those on Amazon.com, based on data from companies that track online retailers’ selection and prices.

For example, Boomerang Commerce reported today that Walmart.com this holiday season is offering 66% of the 600 most popular toys on Amazon, versus 46% last year, and 68% of the most popular consumer electronics products versus 51% in 2015.

“The big jump we’re seeing is Wal-Mart,” says Boomerang Commerce CEO Guru Hariharan. “Clearly they have made some good strides in using the power of their marketplace.”

Wal-Mart executives have said they have increased the number of items available on Walmart.com this holiday season, largely by recruiting additional merchants to sell their wares on Walmart.com. A spokesman says there are 23 million items available on Walmart.com today, nearly three times the 8 million available last holiday season.

In terms of price, Walmart.com was lower than Amazon on 78 of the 394 toys they both offered, the same on 139, and higher on 177; in electronics, Walmart.com was lower on 84, the same on 66 and higher on 257.

Online marketplace Jet.com, which Wal-Mart acquired this summer for $3.3 billion, was the only one of the competing e-retail sites Boomerang reported on today to have a price edge on Amazon in either toys or electronics: Jet was lower on 98 of the Amazon best-selling toys that Jet carries, the same on 39 and higher on 78. In electronics, however, Jet was lower than Amazon on only 36 SKUs, the same on 82 and higher on 163.

Besides Walmart.com, the other retailers Boomerang surveyed all made modest strides in increasing the percentage of Amazon best-sellers they offer. In the toys category, Target.com increased its assortment to 37% this year from 34% last year, Jet.com to 36% from 31%, Toys R Us to 40% from 35% and GameStop to 19% from 18%.

In electronics, Target.com increased to 25% of Amazon’s best sellers from 13%, Jet.com to 47% from 31%, BestBuy.com to 53% from 42% and Newegg.com to 70% from 55%.

A separate study by online price-monitoring firm Ugam shows Walmart.com averaged the lowest price Tuesday through Saturday on popular toys, but that Amazon was the low-price leader Sunday. Walmart.com raised its prices on popular toys on average 14% on Sunday ahead of the Cyber Monday online shopping extravaganza. On Thanksgiving Day, according to Ugam’s survey, Wal-Mart’s online prices on popular toys were 11% lower than comparable prices on Target.com, 14% lower than Amazon.com, 20% lower than ToysRUs.com and 28% lower than Jet.com.

In electronics, however, Target.com was the price leader on Thanksgiving Day, 3% lower than BestBuy.com, 6% lower than Amazon.com, 11% lower than Walmart.com and 16% lower than Jet.com. On Sunday, however, BestBuy.com offered the lowest prices on popular electronics products, 9% lower on average than prices on Amazon. Amazon’s prices went up on average 3% from Black Friday to Sunday and Target’s by 7%, Ugam says.

The price fluctuations on these major retail websites reflects the growing adoption of dynamic pricing technology that adjusts prices based on competitors’ pricing, inventory levels, marketing plans and other factors. “Dynamic pricing is super-big this season,” says Boomerang’s Hariharan. “Most of the big retailers are doing dynamic pricing online, and are being more dynamic in their stores.”

Online retailers dramatically increased their price cuts as Thanksgiving approached after relying more heavily earlier in the season on such promotions as “buy one, get one free” or “free gift with purchase,” says Sarah Engel, senior vice president of global marketing at DynamicAction, a provider of web analytics technology for retailers.

Engel says online markdowns were less frequent than they were in 2015 on North American retail sites in late October and early November, including 22% less frequent from Nov. 1-9, as e-retailers relied more heavily on promotions. But, she says, “As we got closer to Thanksgiving they started to do both—promote (special offers) and mark down (cut prices.)”

The big shift occurred  Nov. 21, the Monday of Thanksgiving week, when there were 26% more orders that included a marked-down price than last year, she says. “Nov. 22 showed a 16% increase in markdowns, Nov. 23 showed a 25% markdown. And then Thanksgiving Day itself was up 29% in the numbers of orders placed with a marked-down item,” Engel says.

There also is fierce discounting on Amazon.com and  some of Amazon’s European e-commerce sites, says One Click Retail, a company that collects and analyzes e-commerce data primarily for consumer goods manufacturers.

For example, in home goods on Amazon’s U.S. site, the average list price on Black Friday was $61.15, but the average selling price on the product page was $26.66. Further, when there were deals on offer the average deal price was $20.67, according to One Click Retail.

“Overall in 2016, we're seeing far deeper discounts and more promotions than any year on record,” says Spencer Millerberg, managing partner at One Click Retail. “Competition is more intense than ever before. International discounts are coming online too with Germany, the U.K. and France joining the ‘Black Friday/Cyber 5 day’ frenzy.”

Amazon is No. 1 in the Internet Retailer Top 500, which ranks North American retailers by their online sales. Wal-Mart is No. 4, Best Buy No. 12, Newegg No. 17, Target No. 22, Toys R Us No. 35 and GameStop No. 45.

 

 

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