To Counter Amazon, Wal-Mart Discounts 1 Million Online Items

by MR Magazine Staff

Wal-Mart will offer discounts on more than a million online-only items that customers then pick up at stores, part of an effort by the world’s largest retailer to challenge Amazon. Taking another page from the business it bought last year, Wal-Mart will first cut prices on about 10,000 web-only items such as Britax car seats and Lego toys, according to a statement. The Pickup Discount program, which starts on April 19, will expand to more than a million so-called “long tail” items by the end of June, the company said. “With Pickup Discount, we are beginning to take the ethos behind Jet’s Smart Cart and marrying it with Wal-Mart’s operational efficiency,” Marc Lore, head of Wal-Mart’s e-commerce business, said in the statement, referring to the business model he pioneered at Jet where customers got discounts for agreeing to package items together, or forgo returns. “Quite simply, it costs less for us to ship to stores. So, our customers should share in those savings.” The move is Lore’s latest step to check Amazon’s growing online dominance, and shows how he’s keen to meld Jet’s innovations with Wal-Mart’s 4,700-store network. Earlier this year, Wal-Mart scrapped a free-shipping program that competed with Amazon’s Prime membership and replaced it with free two-day deliveries for orders of at least $35. Amazon will control half of the U.S. e-commerce market by 2021, according to analysts at Needham & Co. They estimate that the online giant currently commands 34 percent, compared with Wal-Mart’s less than 5 percent. Read more at The Dallas Morning News.