Walmart has online EDLP opportunity
Online pricing intelligence provider 360pi compared Amazon.com and Walmart.com prices earlier this year in a dynamic pricing study and discovered Walmart changed its prices more often than Amazon.
The company looked at Amazon.com and Walmart.com prices comparing a basket of grocery pantry/household items spanning a number of CPG brands with a non-grocery basket (such as toys, electronics and tools) shopped on Amazon.com and Walmart.com between April 9 and June 9, 2015.
Three key finding from the report were:
• The Gap Between Amazon and Walmart Widens Slightly Over 2 Months: Walmart’s grocery basket was initially much more competitive with Amazon than its non-grocery basket, with a very narrow gap maintained between the two retailers, according to 360pi. Walmart’s average price even dipped marginally below Amazon in the middle of April. However, in the beginning of May, this situation began to change with the grocery basket price consistently 4-6% higher than Amazon. The non-grocery basket, on the other hand, became more competitive with Amazon, narrowing the price gap to 2-4%.
• Price Dynamism Low In Grocery: According to 360pi's analysis, the grocery basket was significantly less price-dynamic than the non-grocery at both Amazon and Walmart, with the difference being more pronounced at Amazon. At this time, it is unclear whether these retailers are planning to keep a more “everyday low price” strategy to gain trust among online grocery shoppers, or whether the price dynamism will ramp up in accordance with category maturity.
• Amazon’s Price Volatility Significantly Less Than Walmart’s: Even though Amazon made a significant number of price changes in the non-grocery basket, the price changes were insignificant and the average price only had a 2% and 3% swing respectively in the grocery and non-grocery baskets during the sampled two-month period. This is consistent with 360pi's observations in many other categories over the 2014 holiday period. Walmart’s average price on both baskets fluctuated more dramatically over the same period with a 10% and 9% swing on the grocery and non-grocery baskets respectively.