Retail major, Wal-Mart Stores Inc is aggressive on challenging predatory online pricing. In a latest development the retailer, has informed managers of its roughly 5,000 stores across the United States to match prices with Amazon.com Inc and other online retailers.
Commenting on the matter, the head of the company's U.S. business, Greg Foran said: ‘The directive was meant to formalize a practice already in place in many stores. "About half of the stores were doing it anyway."
In a bid to secure its foothold in US, and to rev up sluggish sales, as it battles competition from e-tailers like Amazon; Walmart is all set to match prices with online competitors. Despite, witnessing challenges of costs involved in running a brick and mortar store.
But matching prices with online sellers that don't have the costs associated with running brick-and-mortar stores could also hurt profits. As the holiday shopping season is on cards, Wal-Mart's move underscores how stores are being forced to step up their game.
Moreover, the holiday shopping season that accounts for about 20 percent of retail industry's annual sales, will turnout to be a big challenge for Walmart to manage prices.
Besides, the National Retail Federation, the nation's largest retail trade group, forecasts a 4.1 percent sales increase to $616.9 billion for November and December from last year. But online sales, which are included in the forecast, are expected to increase anywhere from 8 percent to 11 percent.
Another ,leading retailer, Target Corp. revealed its plans to offer free shipping on all items for the holiday season until Dec. 20. Overall, stores need to ply shoppers with deals and free shipping to win their money.
Commenting on Walmart’s move to match prices, Deisha Barnett, a Wal-Mart spokeswoman, said:’ many store managers have matched online prices for customers on a case-by-case basis.’
In the competition to reclaim its role as a low price leader, Walmart had rolled out an online tool called Savings Catcher, earlier this year. This online tool compares prices on thousands of products with those of some of its store competitors. If the tool finds a lower price elsewhere, it refunds the difference to shoppers in the form of a store credit. That's different from traditional pricing matching because Savings Catcher does the work for the customer.
Wal-Mart Stores Inc. is testing a program to match online prices from rivals such as Amazon.com Inc. this holiday season, a move that could make the discounter more competitive but cut into earnings.
Wherein, the company’s focus is on taking care of customers and said store managers have had discretion to match certain online prices for customers for some time.
Wal-Mart has long resisted matching online prices, even as competitors Best Buy Co. and Target Corp. adopted the practice to keep customers from “showrooming,” or browsing brick-and-mortar stores but subsequently making the purchases at online competitors.
But Wal-Mart is fighting to keep shoppers coming to its stores and to regain its reputation as a low-price leader, which faded in recent years as dollar stores and online competitors became more aggressive. A basket of goods at Wal-Mart was 1.2% cheaper than the same items at Target, the smallest price gap since 2012, according to a June study by consulting firm Kantar Retail.
According to a report, Wal-Mart would eliminate shipping fees and guarantee delivery by Christmas Eve for 100 popular products, but wouldn’t drop shipping fees entirely. Online, Wal-Mart has become more competitive with Amazon, according to research from Wells Fargo and pricing firm 360pi. In the three months through February,
Wal-Mart’s prices were on par with Amazon’s. In August, Wal-Mart’s prices dropped to nearly 10% lower than those of Amazon, where prices have been increasing, the research found.