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Costco beats Amazon on price | Retail Dive

Costco is widely seen as benefiting from a treasure hunt atmosphere, where shoppers pick things off the shelves not originally on their shopping list. That, as well as its membership fees, are its saving grace — on some items Costco makes no money. It’s essentially how Amazon operates, too, with its Prime members more or less paying for shipping costs up front.

Amazon’s dynamic pricing may be an advantage for the e-commerce giant in the online world. The Amazon spokesperson didn’t describe how that worked, but addressed it to Retail Dive this way: “Retail prices fluctuate all the time, and Amazon seeks to meet or beat the lowest competitive price for our customers.”

In any case, to the extent that dynamic pricing enables any e-commerce retailer to swiftly, if not automatically, adjust prices, Costco, (which has quietly been building its e-commerce sales but remains focused on brick and mortar), can’t really do the same in stores.

It all adds up to a potential price war among retailers, as long as shoppers are willing to frequent different retailers — and, according to research from Frank N. Magid Associates, Costco and Amazon shoppers typically do shop around. (Meanwhile, Walmart’s shoppers, who are more fixated on price and convenience, stick to Walmart.)

“This year there’s been a marked rise in discussion about an online price war,” Keith Anderson, Profitero senior vice president of strategy and insights, said of his firms study in October. “While lower prices are good news for shoppers, suppliers and retailers will inevitably feel the pressure as we head into peak holiday season, as this price war is only set to intensify.”

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Costco beats Amazon on price | Retail Dive.

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