What Did Walmart Learn From Its Nuclear Test Against Amazon Last Week?

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Ever since Walmart lured Marc Lore to work for them, they have stepped up their war with Amazon. They lowered the free shipping threshold from $49 to $35, but then Amazon matched and beat them.

Last month Walmart started offering small pickup discounts to gain a competitive advantage over Amazon. After all, it could ship things to its stores for a fraction of the cost to ship things to consumers homes. Plus it hoped to encourage consumers to spend more in stores as well while they were there.

Unfortunately for Walmart, Amazon quickly matched the pickup discount and a price war developed. Items would be marked down by more than 50% before the item would sell out and the price war would move onto other items.

At around 9PM last Monday Walmart started offering insane pickup discounts, as much as 90% off if you picked them up in-store. It put Black Friday deals to shame.

Some people thought it was a mistake, but the timing was far too deliberate. It was just as their price war with Amazon was heating up. More interestingly, it was focused on bulky and heavy items.

That made perfect sense for Walmart as they could ship them to their own stores without it costing a fortune. But if Amazon wanted to match the pricing it would cost them dearly. They would take a huge hit on both the item and the shipping costs.

I think Walmart was testing the waters. They wanted to see just how far Amazon was willing to go. And they wanted to inflict as much pain as possible for Amazon while they were at it. The pickup discounts continued to escalate until about 3PM on Tuesday. Walmart gained lots of new customers with the discounts, but they also learned that Amazon was prepared to invest millions of dollars in the war. Amazon refused to be undersold, no matter what it would cost them.

So where does it go from here?

Walmart’s pickup discounts have dropped back down to smaller levels and Amazon continues to match them. Walmart then matches the Amazon price and adds a pickup discount and Amazon matched the new pickup discount price.

For example:
-Sauder Heritage Hill 5-Shelf Library Bookcase is $91.97-$0.92 pickup discount at Walmart and $91.05 at Amazon.

-Happy Camper Two Person Tent by Wakeman Outdoors is $13.80-$0.14 pickup discount at Walmart and $13.66 from Amazon.

-Dream On Me Ashton Convertible 5-in-1 Crib, Mystic Grey is $119-$2.98 pickup discount at Walmart and $116.02 from Amazon.

It’s hard to imagine how WalMart can win this war. Amazon seems determined not to let Walmart have any advantage. Amazon has Prime membership, a lower free shipping threshold for non-Prime members ($25 vs $35), and who would rather have to go into Walmart to pickup a crib when Amazon will give you Walmart’s in-store price and still ship it to your home. Plus Amazon has a massive scale advantage over Walmart’s e-commerce division.

I’ll keep watching the battle as I find it fascinating and I’m sure Marc Lore has something else up his sleeve. But even he must be realizing just how hard it will be for them catch up to Amazon’s online dominance.

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51 Comments on "What Did Walmart Learn From Its Nuclear Test Against Amazon Last Week?"

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Sam

One benefit that sometimes might sway towards Walmart: if you’re not sure if you want to keep the item or return it. Amazons return policy is more strict, and you can get penalized for returning too much, plus most things they make you pay return shipping, restocking fee etc. and even if you do speak to a customer service person, every time you get a different answer.

It's all about who can last longer...

If Amazon Web Services can keep subsidizing Amazon, then Amazon can win. But WalMart is profitable. Amazon better pray its liquidity doesn’t run out.

Ben89

@Sam: i agree 100%

Chad

You might add the fact that Bezos AWS (cloud system) is the reason that Amazon is making money. When you stack that up against Walmart, Walmart has no chance of winning.

Just look at other retailers vs Amazon (minus Home Depot and ULTA, two names that are surviving).

That said, thank you for the $10 chair. It is getting delivered tmorrow!

chaim

I believe Walmart’s sale items were just the ones they wanted to get rid of, and the figured if they get you to come onto the store they will make money when you buy extra stuff when you come in. I dont believe there intention was to wage war.

Makir Tova

Thank you! I actually got 8 of these Walmart delivers fir $7.48

For example:
-Sauder Heritage Hill 5-Shelf Library Bookcase is $91.97-$0.92 pickup discount at Walmart and $91.05 at Amazon.

Makir Tova

Ooops $73.48

Good point Sam

Return policy has always been a deterrent for me when purchasing from Amazon. Still, for most things, I’d rather have Amazon drop it off at my house then have to run out to Walmart to pick it up. On items I’m concerned that I might have to return, Walmart return policy trumps Amazon

David

I picked up my orders yesterday from Walmart in Suffern, they were STACKED with all tables, chairs that were on sale last week, the clerk told me they had some price mistakes online and ‘you guys are smart’ since we caught them all. He claimed that mainly 3 locations were effected by this volume of orders..

ari

my rocking chair has shipped but there hasnt been any movement since scanned once in california….(i live on the east coast)

Ac

@Sam:

Not sure what amazon you use… I returned a lot of stuff (but not more than 15% of my purchases) not once did I pay return shipping or restocking fees.

James

Amazon could afford an all out war because its invertors don’t expect it to be profitable.

SG

I was watching 1 item that was going down and down with small pickup discounts being matched by Amazon, at one point Walmart made the item unavailable, Amazon price then went up to MSRP, after a few hours the item was available again at Walmart for much cheaper than Amazon’s price at that time since Amazon was still at the high price, so here Walmart gained some time where they were significantly cheaper than Amazon, but of course it was not too long till Amazon once again matched, but here Walmart was able to move the price up without having to surrender

Arthur

Dan, I read how you always ask :why would you go to the walmart store to pick up.
Three part answer –
1. I’m a bad Jew and do not eat kosher so I go there anyway.
2. Bulky items (from my personal experience) get less damaged when I pick them up from walmart rather then delivered by UPS/FedEx/USPS to my door.
So I can just drop it back to Walmart without being on the phone with Amazon (sometimes took my me up to an HOUR)

3. Most Important – this way I have 90 day Walmart return Policy VS 30 day Amazon.

So even though I love Amazon – for people like me – Walmart is the winner.

Ilya

Exactly. If I was Wal-Mart I would pray that everyone choose Amazon, let their margins compress, and break them that way. As you noted they are discounting mostly the heavy items

a

@Ac:

I tried returning or price matching the 16 bike that was on sale but amazon refused to price match even after esclating and said nonreturnable.. so i had file claim with my cc to match it

sam2

Thanks Dan, amazon will def win but lets hope for a long war so we can enjoy the low pricing!
can u pls post good deals on sleepaway camp items now that the summer is around the corner? thanks Dan!

Eliezer

I don’t understand how you can even say Walmart and Amazon in the statement when it comes to online, while Amazon is the sample of a smooth site, Walmart is just the opposite! checkout is terrible! and my credit card displays about 200 times! not a joke

Chaim

I think Walmart will find a way to win Amazon.

DanFan

Amazon will also not ship your item for almost a week if you are not a prime member, that’s a big plus for Walmart, where you don’t have to lock in to their membership

Mendy

When buying a few small items on Walmart, they still have a long way to go to know how to package stuff properly like Amazon does.

Sam

@Ac unless an item is listed as free returns, amazon charges for the return, or you return it yourself. Meaning you ship it yourself back to them. I think clothing, kids stuff, are free returns. Tvs used to be and they changed that recently.
You may contact a customer service rep to waive that fee but that’s hit or miss. And totally up to them to decide.

Sarah

I wonder if anyone will get the rocking chair. Its been showing shipped for a few days but doesn’t have a tracking number and was supposed to be at the store today and it’s not.

Avi

I also noticed that the items that Amazon is competing with Walmart, there is a limit of 1 on Amazon where on Walmart there isn’t a limit.

Marko

WALMART WILL WIN!
Listen up folks amazon has been able to push everyone around but they managed to poke and wake up the big sleeping bear which is walmart.
Walmart is the worlds largest retailer and is just beginning to scratch the surface of eCommerce. By a snap of finder they managed to match the amazon prime service (I say its matched when you consider walmarts fast free shipping is free).
Walmart is not only going to begin to dominate online they are going to flood the stores with more customers with the pick up discounts (how genius!!!). They have even begun building prototype cool vending machine like kiosks for easy pickups.
Wait until they roll out streaming services and more… … They sky is the limit…

Steveo

@DAn My chair was for pickup and it said i should wait for an email to pick it up, which would be friday. I haven’t gotten any so far. Do you think they’ll honor it?

yitzyk

There is one thing I am not understanding about the article – “It’s hard to imagine how WalMart can win this war.” In all of the examples sited, Amazon has matched the Walmart price even after adding in the free in-store pick-up.

True, Amazon will win the customers because why not get it shipped to your home instead of going into the store to pick it up. But behind the scenes, since these are all heavy items, Amazon is losing big money on the free shipping. Is that really called ‘winning’?

I bought a swimming pool from Amazon on sale a few years ago for less than $200, and still get a chuckle until today when I remember how they truck-shipped the 120lb box to me for free.

MG

I also find this to be a fascinating battle to watch as retail stores are closing, struggling, and looking to upgrade their on-line sales. As one of amazon.com’s goals is to take a larger part of the retail clothing market, I am curious to see if they bring in some technology (there are some interesting VR and AR tools out there) to draw consumers in. Will stores bring that technology in as well? Tough and competitive times ahead. Hmmmmm… Consumers want it all – competitive pricing, good customer service, convenience, and handled quickly.

Sam

WM pickup took over an hour. Lipstick on a pig.

J

@Arthur: I agree with Dan “No such thing as a bad Jew”. as long as you live you can do Teshuvah

BA

Great PR for Walmart just having news items mention them and Amazon together as equal competition. Makes people think and look at Walmart as legit.

check this out in forums
shalom

I ordered the table, glider, and office chair to the store in howell nj it said that its going to be available today but only the table came also no tracking info what do you think happened?

Yechiel

@dan, Is there a comprehensive list where one can go to see all the items currently being fought over?

hesh

Did anyone get the rocking chair?
How big is the box? will it fit in a minivan?

Eli

There is a big disconnect between Marc Lores concept and Walmarts ability to execute. The company is slow, unwieldy, and inefficient. It took me 20 minutes and 40 minutes to pick up two different orders. What a waste of the loss they took on those two items to try to get me to visit the store. I was so frustrated by the pick up experience I have no patience left the shop and left with a bad taste. Amazons service may be going downhill but Walmart is making them look stellar….

Parkerthon

Walmart won’t win unless they have a plan to become Amazon 3x faster than Amazon became Amazon. Their platform is so vast and superior, it would put Walmart out of business trying to truly emulate them.

https://techcrunch.com/2017/05/14/why-amazon-is-eating-the-world/

Chaim

One thing that walmart definitely gained,is that they got a special place on Dansdeals Forums.

Judah

I can’t tell who is more excited about a nuclear war, Drudge with US and North Korea or Dan with Walmart and Amazon…

Flabbergasted

Amazon return policy blows WM out of the water in real world. Literally nothing I’ve returned to Amazon over the last decade has been denied. But when I see the unending arbitrary return denials (spend too much time in line at CS) at my local WM’s, I’m astounded anyone would ever shop there again. Just in the last few weeks I’ve seen people be denied for returning recently purchased clothes (with receipt) because they had been washed and had shrunk. Another lady returned some unopened fabric swatches. Denied. Unopened non-perishable food? Denied. One guy bought the wrong toy in WM next town over and returned it same day unopened with receipt? Denied.

Makes me furious just seeing how badly people are treated at WM when they have the audacity to complain and ask for a manager. Usually some so-called assistant manager comes by and just spouts whatever drivel/lies is needed to get rid of the problem (ie, “customer”).

And why ANYONE would want to drive to WM, park 1/4 mile from the door, stand in line for 20 minutes and suffer another 10 minutes picking up their order because WM can’t find it, then wait for them to open up your package to double check it’s actually the correct item and not already damaged, then get scanned, show ID, walk back and drive home is beyond baffling. Life is too short!

chair

the chair is not a very big box.. two easily go into a minivan.

Eric

Walmart can easily win the war if they could only copy Amazon to higher local people to deliver (with their bicycles too) to people living close to each Walmart store. they can beat with the 2-hour delivery that Amazon has in New York,NY and get it live in almost every place in the US. they have 20 times more locations than Amazon. Go Walmart Go!

captainsave

If walmart wants to compete first they need to fix that horrible in store pick process. Most of the time no1 is even standing at the counter!

Malky

You failed to mention Walmart’s free return shipping for any reason.
You failed to mention Walmart’s 90 day return policy for everything!
You failed to mention that Walmart will accept food item returns without an issue whereas Amazon does not.
You failed to mention that Walmart does not limit the purchase quantity of most items whereas Amazon has severe restrictions I this area.
So yes Walmart definitely has many advantages over Amazon!

H

@Marko: if you would really order from Walmart u would know that amazon beats them hands down in the shipping department.. Amazon packages arrive within 2 days or less, and Walmart it’s 2 business days which something equals more than half a week…. Which is not long, but considering how we are spoiled with amazon 2 day shipping, half a week is quite long. Besides where I always get my Walmart order at least a day or 2 later as promised, thanks to lasership…

Anonymous

@chair: Thanks!

Neil

I only ordered one thing from Walmart w/store pickup during last week’s war and although it was supposed to be ready for pickup yesterday I did not get an email saying it was ready. I checked the website and it does not indicate any cancellation, just that it was scheduled to be ready yesterday.

Anyone else have this problem?

john

noone is mentioning the fact that Walmart has 2 day shipping without membership fees and amazon you gotta pay 100 bucks a year

Anonymous

@john: not comparable at all!!! Never ever did I get my Walmart order in 2 days…

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