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Study Finds Amazon Pricing Is Tough to Beat

Which top retailer has the lowest prices? Online sellers know how competitive the Amazon marketplace is, but they may be wondering how it compares to other sites on pricing and product assortment.

A new report from Boomerang Commerce takes a look and find that Amazon wins on both scores in the consumer electronics category, but surprisingly, Walmart had the highest prices, which average 8.3 percent higher than Amazon among the most popular products in the category.

Overall Jet most closely matches Amazon on price, averaging only 1.4 percent higher.

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According to the report, Amazon is outmaneuvering its competition with mass discounts that average 66 percent off list prices*. Currently, Target offers the smallest list price discount at 15 percent. Walmart and Best Buy discounts average 22 percent and 19.9 percent, respectively. In contrast, Jet’s membership-focused business model is to sell at cost rather than offer discounts.

Here’s an interesting excerpt from the report: “Amazon also discounts a far higher percentage of all items than any other retailer. Amazon’s median discount off list was 40.5%. This drives customer perception that many more items on offer at Amazon are on sale, even if pricing is comparable with other retailers.”

Best Buy, Jet, Target and Walmart lag significantly behind Amazon in their product assortments. Closest competitor Walmart has 32.9 percent product assortment overlap with Amazon, while Best Buy and Jet overlap by 29.5 percent and 16.4 percent, respectively.

Boomerang Commerce founder and CEO Guru Hariharan said the report illustrated just how far retailers’ pricing and assortment currently lag behind Amazon. Despite Amazon’s clear domination, competing retailers could lure consumer electronics consumers by substantially expanding their assortments and offering lower average prices to improve consumers’ price perception.

Boomerang analyzed 1,200 items across 490 unique brands during a two-day period in August 2015 throughout the online stores of five top retailers: Amazon, Best Buy, Jet, Target and Walmart. Using a combination of machine learning and big data analytics, Boomerang created proprietary methods for analyzing actual, current consumer pricing and product assortment. The analysis is based on best-seller items on the Internet, as well as a selected assortment of moderate- and low-popularity products.

You can download a copy of the full report on the Boomerang Commerce website.

*The company provided the following clarification: The 66% represents the total number of items discounted and the 40.5% represents the median amount they are discounted off the list price.”

 

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Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.


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