Wal-Mart to Counterattack Amazon’s ‘Prime Day’ With Web Sale

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Amazon Drums Up Own Holiday Called 'Prime Day'

Wal-Mart Stores Inc. is cutting prices on thousands of products this week in a counterattack to Prime Day, an event Amazon.com Inc. is using to promote its subscription service.

Wal-Mart will begin the sale on July 15, the same day as Amazon’s much-publicized promotion. During Prime Day, Amazon will offer special discounts to members of its service, which costs $99 a year.

The move marks an escalating battle between Wal-Mart’s e-commerce site and Amazon, the world’s largest online retailer. Wal-Mart also has been developing its own competitor to Prime that will cost $50 a year, half the cost. But it won’t have the same speed of delivery as Prime or some of the other perks, such as Amazon’s streaming video and music services.

Wal-Mart’s promotion this week is separate from that push, and the deals are available to all customers. Fernando Madeira, president of Walmart.com, took a dig at Amazon in a blog post on Monday, saying that Wal-Mart’s discounts won’t just be for people who pay for a membership.

“We’ve heard some retailers are charging $100 to get access to a sale,” Fernando said. “But the idea of asking customers to pay extra in order to save money just doesn’t add up for us.”

As part of the effort, Wal-Mart also is lowering its minimum purchase for free shipping to $35 from $50.

Trading Barbs

Amazon fired back, criticizing its competitors for offering promotions online and not in stores.

“We’ve heard some retailers are charging higher prices for items in their physical stores than they do for the same items online,” Greg Greeley, vice president of Amazon Prime, said in an e-mailed statement. “The idea of charging your in-store customers more than your online customers doesn’t add up for us.”

Wal-Mart won’t be the only one reacting to Amazon’s promotional blitz, said Steve Beck, managing partner of consulting firm cg42. He expects Best Buy Co. and Target Corp. to offer their own sales, another sign of Amazon’s growing influence over the traditional retail industry.

“Retailers have a tendency to be a me-too crowd and be the folks at the party who don’t want to be left out,” Beck said. Amazon is “making older, slower companies react -- as opposed to doing what is best for their own business.”

Wal-Mart, the world’s biggest retail chain, is betting that online sales can help pull it out of a broader slump. The Bentonville, Arkansas-based company cut its sales forecast in February, and higher spending on wages and other investments have raised concerns for investors.

Wal-Mart has been trying for years to get a bigger share of online retail sales. It opened sleek offices in Silicon Valley, hired hundreds of programmers and acquired tech companies. Wal-Mart’s online sales increased 17 percent in the first quarter.

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