Walmart is making some big changes.
In a move that might shock many in the retail industry, Walmart has quietly inflated their online prices in an attempt to drive more traffic to their stores.
According to a report in The Wall Street Journal, the big-box store has changed the prices on a large percentage of their household and food items, including toothbrushes, macaroni and cheese, and dog food on its website. However, the prices in their stores are remaining the same, sometimes accounting for more than just a few dollars' difference in the cost of certain goods. As a result, price discrepancies between the same item's listing online and for an in-store flyer will be highlighted, with the hopes of encouraging more people to show up in person to purchase what they need.
The move is undoubtedly because Walmart wants to exploit any conceivable advantage they have against Amazon. They've already made several bold decisions in the online sector too, working with their subsidiary Jet.com to develop services that include a scenario where couriers to unlock your front door and place packages right in your home, as well as a grocery pickup service where online users can simply add items to their orders and then venture out to pick them up at a pre-determined time later on that day. Like take-out, but with groceries in mind.
The increased prices on their website may also have a hand in reducing the chain's processing costs and increase their sales margins as a result. Essentially, it's the avoidance of shipping costs that is in play here, since customers physically entering their stores to buy items means less of an overhead when it comes to online ordering. For example, shipping one box of instant macaroni and cheese from a Chicago address to one in Atlanta could cost Walmart as much as $10, according to the report.
Walmart isn't the first big-boz store organization to take this approach to online shopping. Costco, more known for selling items in bulk, has bene charging more for goods through their website than in-store for years now, but that doesn't mean it's a strategy that will work for everyone. There's no telling is Walmart, a brand whose slogan has been "Always Low Prices," will see a dramatic spike in revenue because of this, but with Amazon continually decreasing their market share in the e-commerce world, it was time for the older of the two brands to think outside the box.