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Walmart Prices Close In On Amazon Just In Time For Holiday 2017

Image from Reuters

As the holiday shopping season kicks into high gear, Walmart has managed to close to the gap with Amazon on pricing — an indication that its investments have panned out so far. Prices at Walmart.com are now only 0.3% higher than Amazon on average, according to a study by Market Track, a retail data analytics firm.

The Market Track report, conducted for Reuters, analyzed prices of 213 products in 11 categories over a period of 700 days ending November 7, 2017.

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The 0.3% price differential is a substantial improvement for Walmart, which saw prices that were 3% higher than Amazon on average in the 350 days ending November 7, 2016. A similar study from Profitero, which examined 13 categories, revealed that Walmart priced these products 3% higher than Amazon in 2017. However, the 2014 version of the Profitero study indicated a 9% price differential between Amazon and Walmart products, so it’s clear that the gap has narrowed regardless of which items are studied.

The report comes at a time when Walmart actually is raising select prices online to drive in-store traffic, a decision that has raised a few eyebrows among those who believe prices should be consistent across all channels. Walmart has made it a point to utilize different techniques to drive in-store purchases, such as introducing an in-store pickup discount to its omnichannel offering.

Walmart actually has Amazon beat on select products, according to the Market Track report. Wearable technology prices are 6.4% lower at Walmart, a major swing compared to 2016 when prices were 12.6% higher. For sports and outdoor products, Walmart is now 1.3% lower, versus 3.5% higher a year ago.

With both companies battling for pricing supremacy, it’s going to be difficult for other big box retailers and grocers to continue competing purely on price. They risk fighting a race to the bottom that their infrastructure may not be able to handle.

Even Walmart is taking a big hit for this, despite the retail giant’s continued sales increases both in-store and online. Operating margins have fallen for four straight quarters, reaching 2.8% in Q3.

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