Lowest Prices? That's Amazon, Not Walmart, Say Value Shoppers

Walmart
Walmart

When it comes to currying favor with America's value shoppers, Amazon is eating Walmart's lunch, according to an online survey.

Walmart's (WMT) standing as the nation's cheapest place to shop is waning in the eyes of low- to moderate-income online consumers, according to the YouGov BrandIndex.

Walmart's value score has declined markedly in the past two years, down from highs in the 50s to its current score of 22 on a scale of 100 to -100. At the same time, Amazon's (AMZN) image as a value retailer gained steam: The e-tailer's score rose from near parity with Walmart's to 71 today.

YouGov bills itself as the only daily consumer perception research firm. Its BrandIndex reflects interviews with 5,000 people each weekday from a representative U.S. population.

The question YouGov asked to generate these scores was simple: "Does [the retailer] give good value for what you pay?" Results were filtered by Internet shoppers who make an annual income of $50,000 or less.

Walmart, which became the world's largest retailer by marketing itself as the world's cheapest retailer, has also been fighting to hold onto its discount credibility amid the growing popularity of dollar stores.

To that end, the retailer is investing $2 billion to revive and strengthen its low-price bona fides, which Walmart executives concede have fallen short of late.

Meanwhile, Jeff Bezos, Amazon's quirky CEO and founder, has been building up the e-tailer to be the shopping destination for online bargains on the widest possible assortment of merchandise -- essentially the Walmart of the Web.

Amazon's low-cost operating model isn't weighed down by store operating costs, and the company has made a practice of skirting state sales tax laws to offer shoppers even lower prices.

Amazon's Continuous Evolution

It comes as little surprise that Amazon is stealing Walmart's discount thunder, says Kenneth Wisnefski, founder and CEO of Webimax, which develops online marketing strategies for retailers such as Aéropostale (ARO) and Sam's Club (WMT).

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"The reason Walmart is declining in value perception is quite simply because they have not done enough to capture the online shopper," he tells DailyFinance. "We have Amazon.com, a fortress in e-commerce and online shopping, continuing to offer new brands, discounts and incentives, while Walmart is being left in the dust," he says. "The depleting value stems from their lack of online presence and their inability to offer multiple brands at various price points."

And Walmart's discount edge isn't only dulling in the eyes of lower income shoppers, Wisnefski says.

"While the study discusses a low-income shopper, the reality is, the majority of consumers are focused on finding the lowest prices and best deals online," he says. "The 2012 consumer is price savvy and is becoming more experienced as to how to bargain shop for products. With the major shift in retail moving online notably over the past 10 years, consumers now have almost 10 years' worth of experience in online shopping and price comparison.

"Walmart can compete better by offering numerous brands of the same product -- as Amazon does -- however they will have to institute an aggressive strategy to capture some of Amazon's market share, which won't be easy," he says.

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