E-Commerce

Walmart to Crash Amazon’s Prime Day Party

Walmart on Monday announced it will offer an online sale to rival Amazon’s Prime Day this Wednesday.

The Walmart.com sale will be open to all customers, emphasized CEO Fernando Madeira, unlike Amazon’s Prime Day, which is open only to members of Amazon’s Prime program, which currently costs US$99 per year.

Asking customers to pay money to take part in a sale doesn’t add up, Madeira said. Moreover, instead of offering a single day of savings, Walmart.com will offer more than 2,000 exclusive online discounts for 90 days.

Further, Walmart will offer free shipping for orders of more than $35 for 30 days. It ordinarily offers free shipping on orders exceeding $50.

Amazon’s Prime Strategy

Amazon has touted its Prime Day as being a bigger sale than Black Friday or Cyber Monday in the run up to the holiday season. It will allow Prime members to shop for exclusive deals in electronics, toys, video games, movies, clothing, furniture and outdoor items.

“We believe Amazon Prime is the best deal in the history of shopping,” said Amazon spokesperson Julie Law.

“If you’re already one of the tens of millions of Prime members, you’re all set,” she told the E-Commerce Times. “If you’re not a member, you’re still invited to Prime Day — just take advantage of our 30-day free trial.”

Summertime Retail Blues

Summer is typically a slower-than-average period for retail sales, and Amazon’s Prime Day is clearly an effort to spark more buying. Walmart is attempting to make its own hay by highlighting the fact that the Prime Day sale is limited to members only.

“It seems like this is indeed more of an opportunistic play by Walmart in an attempt to create a marketing campaign on the tails of Amazon’s celebration of its 20th anniversary via Prime Day,” said Abid M. Chaudhry, senior analyst at BIA/Kelsey.

“Walmart is messaging their own sale and promotion as a counter to what they perceive is Amazon ‘charging customers to access a sale event.’ If you look at how Amazon Prime customers shop and behave and think about Prime itself, this is a pretty weak attempt to dissuade non-Prime members from the event,” he told the E-Commerce Times.

Amazon Prime members pay for the Prime service for the combination of value they receive, with two-day free shipping being a primary benefit. They also are able to access Amazon’s media streaming services, photo storage, Kindle lending library, and other services Amazon is continually introducing as a means to maintain its base of members, Chaudhry added.

“The reality is that Walmart is struggling to maintain its brick-and-mortar store sales, while at the same time is lagging behind Amazon on e-commerce sales, and is actually copying many of the moves Amazon is making in an attempt to steal away customers and sales,” he suggested.

Win for Consumers

This latest salvo between the retailers could result in even bigger savings for consumers. It is likely that other e-commerce sites will follow suit and offer summertime sales as well.

“In recent years, the competition between traditional stores and e-commerce sites has become more fierce, as these retailers race each other to the lowest price in order to attract today’s bargain-driven shoppers,” said consumer and money-saving expert Andrea Woroch.

“With a lot of attention on Amazon, competitors will feel pressure to match prices, or possibly even beat those deals offered during the online giant’s big sale day,” she told the E-Commerce Times.

Shoppers likely can expect fluctuating prices — and by tracking price drops, they can find the best deal.

“Depending on consumer response and online sales figures, this could become another big shopping event that other retailers will want a piece of,” Woroch added.

These sales aren’t aiming to get people into stores, like Black Friday. Instead, they highlight the ease of e-commerce.

“Competition among retailers to increase loyalty among shoppers is more fierce than ever,” said Josh Crandall, principal analyst at Netpop. “Physical location is less meaningful today, as consumers take advantage of benefits that come from shopping online.”

Walmart may be driven by the goal of keeping those online shoppers who aren’t yet Prime members from joining the Amazon club.

“Walmart’s decision to rival Amazon’s Prime Day sale reveals their concern,” Crandall told the E-Commerce Times. “They understand that if cost-conscious consumers sign up for Amazon Prime to take advantage of the sale, Walmart is likely to lose future transactions.”

Peter Suciu is a freelance writer who has covered consumer electronics, technology, electronic entertainment and fitness-related trends for more than a decade. His work has appeared in more than three dozen publications, and he is the co-author of Careers in the Computer Game Industry (Career in the New Economy series), a career guide aimed at high school students from Rosen Publishing. You can connect with Peter on Google+.

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