Marc Lore launched Diapers.com in 2005 out of a garage. It quickly grew and by 2010 Amazon’s CEO Jeff Bezos decided that he had seen enough.
Amazon flooded the market with free diapers in 2010 and 2011. I still have free diapers from those promotions! Eventually Lore was compelled to sell his entire Quidsi operation to Amazon for $545 millon, a much lower number than he felt it was worth, due to Amazon’s relentless price war.
Lore worked for Amazon for 2 years before leaving under less than amicable circumstances.
He immediately set about creating Jet.com. The business model would be a combination of Costco and Amazon, but people balked at paying another membership fee, so he quickly removed Jet’s membership fee.
Meanwhile WalMart was tired of getting crushed by Amazon in the e-commerce space. They wanted Marc Lore to turn things around. In order to do that they wound up buying Jet.com in August 2016 for $3.3 billion and they made Lore their CEO of e-commerce.
Lore has been aggressively adding items to WalMart.com’s inventory to make them competitive with Amazon and he set about having WalMart aggressively price match Amazon.
In January 2017 he killed WalMart’s ShippingPass membership and lowered the free shipping threshold from $49 to $35. By February Amazon also lowered their free shipping threshold from $49 to $35. Of course Amazon also gives free shipping on all orders with Amazon Prime and I’m still not sure why WalMart killed the ShippingPass option. Plus Amazon gives free shipping on all subscription orders.
In March 2017 Amazon shut down the entire Quidsi/Diapers.com operation that was founded by Lore.
In April 2017 Walmart introduced pickup discount. Lore said that it cost Walmart about $5 per package delivered to someone’s home versus just 75 cents for a package delivered to a WalMart store. So he started offering a pickup discount on most items sold by WalMart that are not carried in store.
His hope was that Amazon wouldn’t bother matching an in-store pickup discount.
He was wrong.
Amazon has been aggressively matching WalMart’s pricing and passing on the in-store pickup discount in their pricing.
In turn WalMart has been matching Amazon’s matched price and Amazon lowers their price again.
For example on April 19th both Amazon and WalMart were charging $136.92 for 4 Lifetime Chairs. Then WalMart added a small pickup discount. Now there’s no way I’d go into a WalMart to pickup 4 chairs all to save a few bucks, but Amazon lowered their price by a few dollars as well.
After 10 days of price drops it fell to $80.39 on Amazon and it was posted as a deal on this site on 4/29. Walmart dropped it to $80.39 before a $3.14 pickup discount, Amazon matched that at $77.25 on 4/30. Walmart dropped it to $77.25 before a $3.01 pickup discount, Amazon matched that at $74.24 yesterday morning. Walmart dropped it to $74.24 before a $2.90 pickup discount, Amazon matched that at $71.34 yesterday evening. Walmart dropped it to $71.34 before a $2.78 pickup discount, Amazon matched that at $68.56 this morning.
And just now WalMart has matched the $68.56 price before a $2.67 pickup discount. Amazon’s stock of the item is running low, but I won’t be surprised to see them drop the price to $65.89 shortly to match the WalMart pickup discount price, but with free shipping.
Update: Amazon did indeed match the $65.89 price, but now Amazon and Walmart are both sold out. However there are thousands of other items being fought over between Amazon and WalMart, for example all of the items found in this comment.
The same pattern is happening on thousands of other items. For example most of the items in this roundup have had daily price cuts thanks to the Amazon/WalMart price matching war that has been intensified by WalMart’s pickup discount.
That blurs the line between what is traditionally a deal or not. Some people complain about there being too many deals. Thanks to the price war there are more great deals than ever before, but the prices have come down incrementally, making for lots of great prices, but every day it’s only slightly lower than before, though significantly lower than when each price war begins..
Unfortunately for Mr. Lore and WalMart, Amazon still has a distinct advantage thanks to 2nd day free shipping on all orders with Amazon Prime, to which WalMart has no answer. All else being equal, I’ll buy with Amazon thanks to Prime and their superior customer service. Plus I can buy Amazon gift cards at office supply stores for 5 points per dollar 🙂
But it’s not like Amazon or WalMart are about to buy each other out and they both have very deep pockets, the only question is how low will they go?Amazon offers free shipping with $25+ orders or get free 1 day shipping on all orders with a free trial of Amazon Prime. A prime trial is also free with Amazon Family (which also gets you up to 20% off diapers among other benefits) or Amazon Student. EBT/Medicaid Cardholders can save on Prime Membership here.