Move over, Drake and Chris Brown.
Walmart (WMT) and Amazon.com, (AMZN) the two largest U.S. online retailers, are in the middle of a feud akin to just about any hip-hop rivalry, albeit with more veiled throw-downs.
Responding to a Black Friday-style sales event coming this Wednesday for Amazon’s Prime members, Walmart on Monday announced its own big online sales event, featuring 2,000 price reductions. It also managed to take potshots at Amazon for making its deal available only to its subscription members. Prime members pay $99 a year for free two-day shopping, among many other services.
“We’ve heard some retailers are charging $100 to get access to a sale,” Walmart.com CEO Fernando Madeira wrote in a blog post. “But the idea of asking customers to pay extra in order to save money just doesn’t add up for us. We’re standing up for our customers and everyone else who sees no rhyme or reason for paying a premium to save.”
It didn’t take long for Amazon to launch its riposte, mirroring Walmart’s language and taking aim at the fact that Walmart customers might see different prices in stores than they do online, and among different stores.
“We’ve heard some retailers are charging higher prices for items in their physical stores than they do for the same items online,” Greg Greeley, vice president of Amazon Prime, said in a statement. “The idea of charging your in-store customers more than your online customers doesn’t add up for us, but it’s a good reminder that you’re usually better off shopping online.” (He also said that shoppers who want in on the Prime Day deals could simply try the free limited-time Prime trial.)
Walmart says a store manager does indeed have the discretion to match a lower walmart.com price, even though physical stores don’t match each other’s prices such as when one location has cut prices to clear a product out or offer a special promotion. “It is not our policy to price match our own stores since we are not in competition with ourselves,” Walmart said on its website. Earlier on Monday, Walmart’s web site had included the term “or our online service,” in that policy. But an archived press release showed that changed in November when Walmart began to allow its stores to match walmart.com prices.
The flare-up comes as Walmart tries to narrow the significant online sales gap it has with Amazon. Walmart generated $12.2 billion in e-commerce sales last year, a 22% jump over 2013. But that’s still just a small fraction, 4% or so, of Walmart’s $288 billion in U.S. sales, and only about one-sixth of Amazon’s tally.
Walmart is testing a subscription service like Amazon Prime and is fine-tuning a grocery pick-up service in a few test markets, just two of the steps the world’s largest company is taking to build its e-commerce muscles to combat recently tepid growth in sales and traffic at its brick-and-mortar stores—all while Amazon and others pour billions of dollars into their own e-commerce plans.
This story has been updated to include a change to Walmart’s price matching policy enacted last November that was not reflected on its web page earlier on Monday.
