Walmart, the world’s largest retailer, has just announced that, for a limited time, it plans to temporarily lower the price of select items on their marketplace site which third party vendors pay a fee to list their products on. Walmart has agreed to continue to pay merchants the same price during this period and subsidize the difference.
In a recent article by AdAge, it appears that this move may be in response to Amazon increasingly putting pressure on sellers to ensure that they aren’t offering a lower price on Walmart. Amazon recently introduced a program called “Sold by Amazon” where Amazon has the ability to decrease the price of certain products at any time in exchange for a payout to protect the seller’s margin.
Walmart’s new strategy, which they are calling the “Competitive Price Adjustment” program will only be rolled out to a select group of sellers and items. This offers consumers a period of deep discounts that they won’t be able to find anywhere else this holiday season.
It’s clear that this move is meant to disrupt the marketplace and steer shoppers towards Walmart’s lower prices for this limited period of time. From our vantage point, this model will work similarly to Amazon Vendor Central, where the merchant/3P has very little control over the advertised price during the period that Walmart plans to roll this out. Since Amazon’s algorithm directly crawls Walmart.com, this may cause a disruption in Amazon sellers’ MAP monitoring and enforcement.
If Walmart prices down on products to match or beat Amazon, this will impact MAP pricing for your brand across online retailers, and brick & mortar perception of the online market. We have already seen an uptick in the number of violations coming from Walmart.com for our MAP enforcement clients over the past 2 weeks.
