Cyber Monday Specials Start Early as Wal-Mart Cuts Prices
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Fortune reports Wal-Mart is starting the push for holiday shopping season by initiating the price cutting war on Wednesday. With thee claim “Wal-Mart will not be beaten on price,” the Vice Chairman of Wal-Mart Stores Inc., Eduardo Castro-Wright says “From bananas to board games, Wal-Mart expects to cut prices on thousands of items to meet customer demand.”
What does this mean for Cyber Monday Specials? Beyond Wal-Mart’s sweet use of alliteration, the world’s largest retailer is making an early stance on where customers should look first for the best deals.
No duh. Right.
Well, there’s more to the story. Wal-Mart has the power to slash products to the lowest price, but it’s going to the point that it’s a factor of pennies. Last week, Wal-Mart dropped prices on bestselling books to $10, and when Amazon and Target responded, the books dropped to $9. Now to make the claim of lowest price king, Wal-Mart is selling the books for $8.98.
Retailers like Amazon and Target will get lost in these pricing battles, so they’re taking a lesion from a company who already lost the war. In 2003, Toys “R” Us was undercut by as much as 90% by Wal-Mart on some of their most popular toys, forcing them to shift focus from lowering prices to offering better products and services.
Now instead of competing, Toys “R” Us and Target provide exclusive packages and deals to customers like a line of Hot Wheels from Mattel not available in Wal-Mart stores. Amazon is getting in the act too with its new digital download movie service called Amazon Video on Demand, which Wal-Mart can’t compete with.
All this boils down to price this holiday season. If you want one thing, and Wal-Mart has it, it’s a good chance that’s the cheapest place you’re going to find it. However, if you want a package deal, you might get more bang for your buck if you go somewhere else
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