Walmart is taking a bit of an nontraditional approach to boost sales ahead of Black Friday and Cyber Monday shopping events by raising prices for products sold online and discounting those same items in physical retail stores.
According to The Wall Street Journal, the big-box store has quietly raised prices for household and food items such as toothbrushes, macaroni and cheese, and dog food on its website while the prices in stores remained the same. If there are price discrepancies between online and in-store purchases, Walmart will now highlight this on the product’s web listing to encourage customers to buy them from their local stores.
It’s all part of an effort to increase foot traffic as Walmart continues to compete with Amazon just about everywhere else. Both Amazon and Walmart (and its subsidiary, Jet.com) have been working on similar shopping services and experiences over the past year, such as one that allows couriers to unlock your front door to deliver packages in your home, and a grocery pickup service where customers can order goods ahead of time and drive up to retrieve their order.
With the new pricing strategy, a twin-pack of Betty Crocker Hamburger Helper costs $3.30 on Walmart.com, but goes as low as $2.50 if purchased at a store in Illinois. The aim is to also help reduce processing costs and increase online sales margins, since driving customers to stores means less shipping costs for the retailer. Shipping one box of instant macaroni and cheese from Chicago to Atlanta could cost Walmart as much as $10, reports the WSJ.
Walmart’s strategy is similar to those of Costco’s, which sells items in bulk and are cheaper to buy in stores than online. But as the WSJ points out, it’s still a peculiar strategy for Walmart. (Its slogan is “always low prices.”) While the move may help Walmart boost revenue, it doesn’t quite address how it’ll fight against Amazon for online shopping market share. With declining net income over the past two years, however, the company appears focused on trying to increase revenue overall.
Source : theverge.com