Wal-Mart Takes Aim (Again) at Amazon Prime Day
July 11, 2016 by Paul AusickLast summer Amazon.com Inc. (NASDAQ: AMZN) held its first “Prime Day” promotion, primarily an effort to get more subscriptions to its Prime service by offering low prices on thousands of items. Brick-and-mortar retailers like Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT) countered with sale pricing and free shipping offers of their own. It was no contest.
Prime Day sales pricing is only open to Amazon’s Prime members, but the company offers a 30-day free trial of the service, which also qualifies the tire-kickers. Amazon also staggers price cuts throughout the day to keep consumers coming back for another look.
Last year, Amazon reported that Prime Day recorded sales equal to 97% of 2014’s Black Friday sales and 60% of that year’s Cyber Monday sales. Target’s “Black Friday in July” counter to Prime Day was such a success that it isn’t being repeated this year. Or at least not yet — maybe Target has something up its sleeve for Tuesday, July 12, this year’s Prime Day.
As for Wal-Mart, last year the company’s offer was mostly a big snooze. Prices were rolled back on thousands of items at the online store and the purchase amount required to get free shipping was dropped from $50 to $35. The free shipping minimum purchase was raised back to $50 after the promotion.
What does Wal-Mart have on tap this year? Beginning Monday, Wal-Mart is removing the $50 minimum purchase amount and offering free shipping on all online orders for five days. The company already has offered a free one-month trial of its ShippingPass service, Wal-Mart’s latest answer to Prime. ShippingPass now offers free two-day shipping for $49 a year, but it does not include the other perks of a Prime membership such as Amazon’s streaming video service.
Wal-Mart is apparently not afraid to compete with Amazon, but it simply has too little to offer. The world’s largest retailer has returned to its basic everyday low pricing and that leaves it little margin room to offer something unique. ShippingPass is a low-rent version of Prime, and consumers know it. Wal-Mart simply cannot move as fast as Amazon. And in this case, imitation is not the sincerest form of flattery, but a life preserver.
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