Walmart strategy against Amazon: Raise prices

AP Photo/Alan Diaz, File
Caption
AP Photo/Alan Diaz, File

Walmart is trying a rather novel strategy for driving sales on the Super Bowl of all cyber-shopping days, Cyber Monday — raising prices.

Walmart has quietly raised prices for goods online — boosting those prices higher than what shoppers find in stores — in a bid to get more shoppers inside its brick-and-mortar stores, the Wall Street Journal recently reported.

The Journal said the strategy is "part of the company's efforts to boost profits and drive store traffic as it competes with Amazon.com Inc."

"Amazon has been trying to fend off a growing challenge from traditional retailers that have been leveraging their physical presence to provide shoppers both bargain prices and shopping experiences," Forbes writer Panos Mourdoukoutas wrote in a piece published Sunday.

“One of those traditional retailers is Walmart, which has been ‘turning the tables’ against Amazon by setting store prices that are lower than online prices for some items,” Mourdoukoutas added.

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Cyber Monday — which is tomorrow, of course — is the online counterpart to that annual shopping extravaganza, Black Friday, the incredibly hectic post-Thanksgiving shopping day.

Cyber Monday can be seen as a godsend to shoppers who want to avoid traffic and crowds while still landing decent deals.

The Walmart strategy, however, upends that traditional model. Or tries to, anyway.

But a Walmart spokeswoman disagreed that the strategy has anything to do with Cyber Monday.

“Ultimately, we are committed to offering the best prices online compared to other online retailers,” a company spokeswoman told this news outlet in an email. “Many of those orders come with free two-day shipping with no membership fee. And on top of that, customers can often find even lower prices if they choose to pick up the item at a Walmart store.”

She added that the dual-price approach -- one price for store items and another for items sold online -- was primarily geared toward lower-priced items.

“The recent addition of showing two prices on our site was primarily for low-priced food and consumables items,” the Bentonville, Ark.-based company said. “This two-price display is all about providing our customers with choice and transparency.”

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The Journal story noted that Wal-Mart is investing billions to boost online sales, which rose 60 percent in the U.S. in the most recent quarter, but shareholders worry the effort could hurt the stores.

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