A combination of frequent price adjustments and deep discounts on select items made Amazon the king of competitive pricing over Black Friday weekend.
According to a study by 360pi, the e-tailer offered the lowest price on nearly 80 percent of over 7,000 items sampled by the market research firm over Black Friday weekend.
Running a close second among national retailers was Walmart, which put “significant pressure on the market this Black Friday as their number of lowest or same-as-lowest prices [was] almost on par with Amazon,” the researchers reported.
This reflects the discounter’s continued investment in pricing to “win the holiday,” although in Amazon it faces an adversary that gleans most of its profit from Cloud and fulfillment services and commissions from third-party sellers, rather than traditional retail sales.
Third place in the low-price stakes went to Target, followed by Toys“R”Us, Sears, Staples and Rakuten (formerly Buy.com). [See chart, below.]
The low-price playing field shifted somewhat for CE, where Walmart was edged out for second place by “a leading electronics category expert,” ostensibly Best Buy, based on a sample of over 1,000 SKUs in Amazon’s assortment that were exact matched across competing chains (see chart, below).
Like Walmart, Best Buy too is committed to competing on price, and is heavily invested in its current credo, “Expert service. Unbeatable price.”
This was born out by a Nov. 23 CE spot check by pricing analytics provider Marketyze, which found Amazon beating out Best Buy by just 99 cents on a $200 Canon Vixia HF R600 camcorder. The same unit sold for $214 on Walmart.com and $274 on eBay:
Canon camcorder prices on Nov. 23, 2015. Source: Marketyze
Amazon’s price leadership is attributable in large part to its high-frequency dynamic pricing. According to 360pi, the e-tailer typically changed prices daily on 14 percent of over 18,000 sampled items throughout November, with a notable spike on Nov. 1 (19.5 percent), when it launched its seasonal Lightning Deals (see chart, below).
It changed prices even more frequently for items on its best sellers list, with about 35 percent of 360pi’s best-seller sample repriced each day.
In a departure from its “everyday low price” messaging, Walmart was actively keeping up by also repricing items to remain competitive, the researchers said, and both Walmart and Best Buy raised and later lowered their prices for the Canon camcorder to better align with Amazon, Marketyze’s digital marketing director Ruth Hamer reported.
As veteran retail analyst Aram Rubinson of Wolfe Research surmised, “Amazon is not afraid to hit the price button from time to time,” based on his own Cyber Monday survey of 25 SKUs across a variety of categories. His conclusion: “Overall, we found a 27 percent discount at Amazon, compared to Home Depot, Best Buy, Bed Bath & Beyond and Dicks Sporting Goods, on the items Amazon promoted. A broader basket on a more normal day would show far smaller discounts. ”