Amazon ousts Walmart again as lowest-cost online retailer – | NutSocia

Walmart can claim to be the cheap leader in groceries and consumables. Still, a recent study of e-commerce prices in 15 major categories from July 11 to October 2 found that Amazon has the lowest online prices compared to 13 US retailers, including Walmart and Target.

Profitero compared the daily online prices of nearly 15,000 items in the study and found that Amazon had the lowest online prices, which averaged 13% below competitors. The study found that online competition for typical Christmas gift categories was tight, with retailers like Walmart, The Home Depot, and Nordstrom priced within 2% to 5% of Amazon’s prices, and pet retailer Chewy closely matched Amazon’s prices for pet supplies. But Amazon blew its competitors away when it came to video games and electronics, according to Mike Black, chief marketing officer at Profitero.

“This is the sixth year in a row that Amazon has had the lowest online prices in the US and the third year in a row in the UK,” Black said. “This is a testament to their sophisticated price matching technology as well as their bulldog toughness when negotiating costs with suppliers.”

Profitero found that Amazon’s prices were 6% cheaper than Walmart and 16% cheaper than the same products at Target. According to Black, Target has narrowed its price gap with Amazon in eight of its 15 categories since last year. Target’s most competitive category on Amazon was beauty, with a price difference of 6% versus 26% a year ago. Target also maintained its 6% price differential on toys. Target’s price differential over Amazon was 19% in health and personal care last year and narrowed to 14% this year. Target’s price differential for vitamins and supplements also narrowed to 17%, down from 22% a year ago.

Target has been able to command premium prices because of its brand and exclusive range. Data from this year’s study suggests that Target’s prices are beginning to ease somewhat as consumer spending begins to cool, Black noted in the study.

When comparing Amazon prices to Walmart, it was in the beauty and toys categories that the price difference narrowed to 3%. Walmart was 5% more expensive than Amazon in small appliances and 9% more expensive than Amazon in electronics. Home Depot was also 9% more expensive than Amazon in electronics, tying Walmart to be the second most competitive to Amazon in that category.

Walmart’s baby category items were 4% more expensive than Amazon, compared to 7% for Target’s baby category prices compared to Amazon. This year’s report also showed that Walmart’s grocery category prices were 2% more expensive than Amazon’s. Walmart’s online fashion prices were 12% more expensive than Amazon’s and also 1% more expensive than Target’s. Walmart’s pet prices were 5% more expensive than Amazon and Chewy, which had the lowest pet prices this year.

Comparing this year’s pricing study to last year, Profitero found that Walmart was losing some ground to Amazon in its price competitiveness. Overall, Walmart had a 5% price differential over Amazon across all categories in 2021. In 2022, Walmart lost ground in fashion, tools, and home improvement, in addition to widening price differentials in electronics and video games.

Other retailers in the study that showed price competitiveness versus Amazon included Home Depot, with 7% price differentials in Sports & Outdoors and 5% price differentials in Tools & Home Improvements. Overall, Home Depot’s prices were 10% more expensive than Amazon’s. Chewy was the only retailer to be on par with Amazon in the pet category.

Retailers that have not demonstrated price competitiveness versus Amazon in the categories in which they compete include CVS, whose prices for beauty, health and vitamins were 51% higher on average, and Walgreens, whose prices in these categories increased by 51% were 27% more expensive. Macy’s online prices for appliances, fashion, home furniture and toys averaged 38% more than Amazon’s. Wayfair’s furniture prices were 37% more expensive than Amazon’s.

Black said that as consumers cut spending due to inflation, particularly in the discretionary categories most popular during the holiday season, it will be interesting to see if Amazon can convert low prices into more sales than its peers. The pressure to maximize budgets means consumers will be more likely to seek deals and discounts from retailers. According to a recent McKinsey study, more than a third of consumers said they would switch retailers for lower prices or discounts because of the higher cost of living.

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