Enacted just months after Walmart countered Amazon Prime with its own, cheaper annual membership, the program would give Walmart the ability to control the pricing of third-party products on its digital marketplace if a lower price is offered on a competing platform.
Additionally, Walmart will be covering the difference between the price-matched product and the initial price offered by the seller, with shipping fees remaining unaffected, Bloomberg reported.
According to the report, sellers cannot automatically enter into the program as it will be unavailable to all but “selected sellers and selected items only.” Bloomberg reported that sellers cannot request to enter into the program if not chosen by the retailer.
In many ways, it appears the move by Walmart is a reaction to Amazon’s tight grip on third-party selling and, simultaneously, a response to the introduction of similar price-matching initiatives among smaller competing marketplaces.
In August, Amazon enacted its Sold By Amazon program, which gave it the freedom to control the prices of its third-party sellers with near impunity as long as vendors selling selected items agree to the deal. Although this effectively relinquishes a seller’s control over the sale of their goods, Amazon also guarantees a minimum payout for each sale to protect the seller’s margins.
With this kind of control over e-commerce holiday sales—the CEO of worldwide consumer at Amazon described Holiday 2018 as the retail juggernaut’s “best yet“—rival marketplaces that don’t want to see themselves washed out have looked to price-matching tools like the CPA in order to keep their platforms relevant and competitvie.
For example, Google’s revamped shopping platform features a price-tracking tool that sends smartphone users notifications when the price drops on a product a user shows interest in, according to the search engine giant.
Earlier in October, Zulily debuted a tool similar to the CPA, offering to match prices on products advertised for cheaper on either Amazon’s or Walmart’s marketplace. Any product on Zulily’s site with a “Best Promise” badge automatically checks its UPC code with that of identical products on Walmart or Amazon and matches the price automatically in case of a discrepancy.
Zulily president Jeff Yurcisin said that the savings that come with these prime-matched products may only amount to “$5 or $10.” But, when considering the complicated and “obfuscated” nature of pricing on the web, those small margins can be “meaningful to a household budget at scale,” Yurcisin explained.