Amazon and Walmart Solidify Their Price Leadership Heading Into the Holidays

Profitero announces findings of its 7th annual Price Wars study

Profitero today published its 7th annual Price Wars study, which compares the online prices of more than 14,000 products across various leading online retailers. The findings confirm Amazon as the lowest-priced retailer for the 7th year in a row, boasting a 16% average price difference compared to its rivals, a 3 ppt increase from the previous year. However, a widening price competition chasm separates Amazon and Walmart from the rest of the retail industry.

Profitero found that only a 4% gap separated Walmart and Amazon prices across identical items, a 2 ppt improvement from 2022. Compared to last year, Walmart became more competitive in 10 categories, particularly in video games, fashion, and home improvement. Notably, Walmart's prices in these categories were only 10%, 7%, and 5% more expensive than Amazon's, respectively, marking a big improvement from last year when the price differences were 19%, 12%, and 9%, respectively. 

During a three-month period of comparing online prices daily, Profitero found Walmart and Amazon to have identical prices across identical products 70% of the time, highlighting the fierce rivalry between these two giants. By contrast, Target and Amazon only matched prices 26% of the time during the three month study.

Price’s influence over purchase decisions has increased due to inflation, but also as more consumers rely on online shopping, given its 24/7 access to prices across retailers. A separate July 2023 Profitero study found that five out of 10 shoppers regularly consult a retailer's website or app before in-store shopping, with price being the primary area of investigation. One in four consumers reported checking a retailer's mobile app or site while shopping in a store, and over a third consulted a competitor's website or app during in-store shopping.

"Amazon’s and Walmart’s solidifying price leadership has significant implications for retailers, not just for holiday sales but advertising investments as well,” said Mike Black, CMO of Profitero. “If a retailer’s product ads are showing up alongside competitors with much higher prices, their conversion rates and ROI won’t be great. Retailers should consider adjusting ad bidding in real time based on competitive signals so that budgets are maximized on better priced products with a fighting chance. If you can’t beat ‘em on price, beat ‘em on agility.”

Key Highlights from the 2023 Price Wars Study:

• Best Deals in Video Games and Fashion: Amazon maintained a considerable price advantage in video games and fashion, with prices on average being 9% and 7% less expensive than its closest competitors, Best Buy and Walmart, respectively. In beauty and toys, Amazon had only a narrow 2% price difference compared to its closest rivals.

• Target's Mixed Outcomes: Target saw mixed results in its performance against Amazon, with prices increasing to be 16% more expensive than Amazon, compared to 15% in the previous year. Target improved in seven out of 15 categories, particularly in home furniture, but slipped in the other eight.

• Dog-Eat-Dog:  A mere 1% and 2% separated Chewy and Petco from Amazon in pet supplies, making pet the most hotly contested category in the study. Chewy’s competition with Amazon is so fierce that they shared the same prices 93% of the time Profitero checked. 

• Convenience Comes at a Cost: Out of deodorant and in a jam? Expect to pay a lot more at drugstores. On average, CVS was 52% more expensive than Amazon for health & personal care items; Walgreens was 42% more expensive.  

To read this year’s report and to find out more about how retailers compare in price, go here.

Notes to Editors

Only identical items available and in-stock in the same pack configuration were compared. Data was collected daily over 12 weeks (July 10 - Oct 1, 2023), with daily prices averaged over the full period for comparison. Prices for the same items were collected within 24 hours of each other to ensure validity of the comparisons. To refer to past Profitero Price Wars studies, please go to: profitero.com/insights.

Retailers featured in the study included: Amazon, Best Buy, Chewy, CVS, Dick’s Sporting Goods, Gamestop, GNC, The Home Depot, Kohls, Lowes, Macy’s, Nordstrom, Petco, PetSmart, Target, Ulta, Walgreens, Walmart, Wayfair 

About Profitero

Profitero is the leading global commerce acceleration company offering a flexible suite of intelligence-driven solutions so that brands can grow profitably. Their integrated digital shelf analytics, shelf-intelligent activation and advisory services empower brands to optimize product availability, discoverability, and maximize conversions across 1,200+ retailers and 70 countries. www.profitero.com