Amazon triggers online price war in the U.S.
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Jul 14, 2015  |  Vote 0    0

Amazon triggers online price war in the U.S.

Wal-Mart in the U.S. has announced it will hold a competing sale on the same day but shoppers at Walmart.ca are out of luck.

OurWindsor.Ca

Amazon has triggered an online price war, promising ‘more discounts than Black Friday’ on July 15, in an effort to build a stronger membership base among customers in Canada and the U.S.

Amazon Prime members in Canada pay a $79 annual fee for free, two-day shipping and other services, including free cloud-based photo storage.

Beginning at 3 a.m. EST on July 15, Amazon Prime members in Canada will be eligible for discounts, including 50 per cent on Huggies diapers and 50-70 per cent on select items across categories including electronics, movies, books, video games, home, patio, lawn & garden and toys.

The specials will be staggered throughout the day. They will also be available to Amazon Prime members enrolled in free one-month promotional memberships. Some purchasing limits will apply, said Amazon spokesperson Katie McFadzean.

But while Wal-Mart in the U.S. has announced it will hold a competing sale on the same day, shoppers at Walmart.ca are out of luck – the promotion will not be held in Canada, according to Walmart Canada spokesperson Alex Roberton. Shipping is free on orders over $50 before taxes.

Jeff Doucette, general manager of Field Agent Canada, a retail data-gathering firm, says the Amazon Prime model brings to mind Costco, which offers discount prices to customers who pay an annual $55 fee.

“If they can get people to join, whether they use it or not, the money is in the bank,” said Doucette.

“I don’t think every retailer can get away with it. Amazon seems to have that affinity with consumers that Costco does. They are fans. People who have really bought into Amazon, those people are – pardon the pun – the prime target for this type of thing.”

McFadzean said Amazon Prime has been available in Canada since 2013. Membership doubled in 2014, while the number of Prime shipments tripled.

“We’re seeing more members ship Prime more often. Customers are seeing the benefit of this free two-day delivery option. They can skip some of their errands because they know they can buy it at work and it will be arriving at home in a day or two,” she said.

The Amazon blitz comes as bricks-and-mortar stores are snapping shut across Canada and marketplace websites like Amazon, eBay, Shop.ca and Shopify compete to dominate the online retail marketplace.

At the Canada-based Shop.ca, customers get free shipping and returns every day, with no annual fees, said spokesperson Mark Daprato.

The site has 850 vendors, ranging from Sporting Life to Bad Boy and Cosmo Music and brands ranging from PlayStation to Miele.

Customer service is easily available by phone.

“We try to make it a seamless experience,” said Daprato.

While it began as an online auction website, eBay now features mom-and-pop retailers and heavy hitters, including Lowe’s Home Improvement, Toys R Us, Staples and Dyson.

Each eBay retailer decides on what shipping options to offer, said Andrea Stairs, managing director, eBay Canada.

At BestBuy.ca, purchases of $25 qualify for free delivery. Later this year, Best Buy plans to expand into an omni-channel marketplace, offering a wider range of products.

Sears Canada offers free pick-up at 1,300 locations, said spokesman Vince Power. Shipping to home is free for orders of $49 or more. Larger items may incur additional charges.

Toronto Star

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