MINNEAPOLIS (WCCO) — In the past, brick and mortar stores like Target and Wal-Mart have chased Amazon.com’s low pricing.
But according to a Wells Fargo study, that changed in the last six months.
University of St. Thomas Marketing Instructor Jon Seltzer says all three are stepping up, but in different ways.
“It really wasn’t all that surprising if you think about Walmart and Target, they could not … be permanently overpriced or more expensive than Amazon.”
In 2013, Target pledged to match best online prices year-round. Walmart has developed several apps, including one for online specials.
Amazon.com, on the other hand, is raising prices.
“Amazon is under some pressure from investors. They have made major investments, I mean, very innovative,” he said. “Some of the areas that they are going into are incredibly exciting. Amazon has got to, at some point, start thinking about, ‘When are we going to become profitable, hence, raise prices?'”
Seltzer says for Target and Walmart to stay in the game, they need to focus on quicker shipping.
“Traditionally, most retailers have not wanted to be shipping directly from the store to your house. But the proximity to the customer raises the question, ‘Hey, if we can narrow that shipping window and I can get you that product in a matter of hours, why wouldn’t I want to do it?'”
It is important to note that this study looked at pricing before taxes and shipping.
Overall, Seltzer says don’t get too comfortable with anyone’s pricing.
It will be a game of cat and mouse, with prices always increasing and decreasing at all retailers.