The competition between Wal-Mart Stores, Inc. (NYSE:WMT) and Amazon.com, Inc. (NASDAQ:AMZN) is taking a nasty turn. Last week Amazon declared that it would hold Prime Day which is analogous to a Black Friday type of sale on July 15. The latter date also happens to be Amazon’s 20th Anniversary.
The deal is exclusive to members of the Amazon’s Prime program that comes at $99 per year for free two-day shipping on millions of goods.
Wal-Mart is retaliating with its line-up of special offers and scathing comments on Amazon’s offer. On Wal-Mart’s company blog, a senior executive criticized a sales format that mandates a membership fee to access deals.
The CEO of Wal-Mart.com Fernando Madeira commented that it has come to the notice of Wal-Mart certain retailers are charging $100 to avail a sale. However, Wal-Mart doesn’t like the concept of charging customers extra just to save money.
Wal-Mart declared that it was reducing its free shipping minimum to $35 from the earlier $50. It also announced that its customers will soon obtain special atomic deals although it did not explain what the latter meant.
Amazon published a riposte to Wal-Mart’s remarks. Vice-President of Amazon Prime commented that certain retailers are charging more for goods in their physical stores compared to the price for the same goods online. He expressed the view that it is not comprehensible why the policy should be so and reiterated that shopping online is a more profitable channel for customers.
On its website, Wal-Mart has written that store managers need not match prices online or prices listed at different Wal-Mart stores. The reason offered is that the organization is not trying to have in-house competition. Hence, a manager may slash prices to clear out over-stocked goods, to incentivize customers or to compete better with the local market. As Wal-Mart is not in the business of in-house competition, there is no price matching between its different stores or with its online service.
Sources: washingtonpost, usatoday