Amazon, Walmart go toe-to-toe with Black Friday-like smackdown

Online retailer Amazon.com has dubbed Wednesday as "Amazon Prime Day," offering what it says will be Black Friday-like sales. Note to be outdone, rival Walmart launched its owns sales deals this week.

Looking for some Black Friday kind of deals in the middle of July? If you are, this is your week.

Online retailer Amazon.com has dubbed Wednesday as "Amazon Prime Day," to celebrate the 20th anniversary of the website. That means any of the company's Prime users will have access to more sales items than they do on Black Friday, the Friday after Thanksgiving that often is the busiest shopping day of the year. The sales begins Wednesday at 12:00 a.m. Pacific time.

Amazon Prime is a service that costs $99 a year and makes members eligible for free two-day shipping and gives them access to Amazon's streaming video, music and other services.

Not a prime member? Users can sign up for a free 30-day Prime trial to get access to the Wednesday deals. However, to sign up for the free trial, users need to enter their credit card information, and if they don't cancel before the end of the 30-day trial, they automatically will be entered into the program.

However, shopping giant Walmart didn't want Amazon to grab all the limelight and all the sales, so the retailer launched its own sales deals this week to go up against Prime Day.

"We've heard some retailers are charging $100 to get access to a sale but the idea of asking customers to pay extra in order to save money just doesn't add up for us," Walmart said on its website. "We're kicking off some awesome deals this week that will be available for everybody with no hidden costs or admission fees, and they won't be available for just one day."

Walmart also lowered the threshold for free shipping from $50 to $35. The company also said there will be "thousands" of sales this week, with what they're calling "atomic deals" popping up throughout the next several days.

"I don't think Walmart and Amazon end up head-to-head much of the time, so this is in part competitive, but also in part just leveraging Amazon mindshare to drive up Walmart sales in the slow summer," said Ezra Gottheil, an analyst with Technology Business Research. "Remember, selling the sale items, for both of these retailers, is not the purpose. The purpose is to drive traffic and habit, and for Amazon, Prime memberships."

Amazon Prime, by all reports, is a successful program, according to Gottheil. "Prime users buy a lot more than non-Prime users," he added. "Of course, the other way of saying that is large purchasers tend to join Prime. Amazon thinks that using Prime drives sales, at least a lot of the time."

It's simply smart for Amazon to push Prime, even if that means making holiday-level sales available mid-summer, according to Jeff Kagan, an independent industry analyst.

"Primarily, Amazon wants to build Prime and is doing whatever it can think of to make that happen," he told Computerworld. "Walmart is one of Amazon's biggest rivals, especially as Walmart grows its online business. If Amazon wins more market share, they will take it from Walmart so Walmart is throwing up a pre-emptive block and counter punch."

Walmart also is looking to try to retain long-term customers.

The fear, says Rob Enderle, an analyst with the Enderle Group, is that once people spend nearly $100 to join Prime, they're less likely to spend their money on other e-commerce sites, like Walmart.com.

"Prime is a focused affinity program with built-in benefits and annual charges," Enderle noted. "Prime members are far less likely to even shop anyplace else. This is one of the main pillars under Amazon's strategy to gain unparalleled market dominance and sustain it. These two companies are primary rivals, and Amazon has been winning most of the battles. It's critical that Walmart push back if they want to remain relevant in what is becoming an Amazon world."

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