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Down to Business: Amazon hulking over retail landscape | The Daily Gazette

With physical stores, Amazon will be “a new competitor for retailers,” says Ouimet.

That will come in large part from Amazon’s “sophisticated, dynamic pricing” — flexible prices influenced by supply and demand.

“Retailers are going to find themselves competing with a competitor that can react within 90 seconds . . . to a price change,” he said. In contrast, most retailers use “very manual processes” that won’t accommodate a price change for three months.

“We’re talking about a totally different game coming right within the next two years,” Ouimet said.

Wal-Mart already has taken note and moved to dynamic pricing online, he said, particularly for grocery items.

His slides cited a news report in February that Wal-Mart planned to make product comparisons in 11 states in the Midwest and Southeast aimed at closing price gaps with supermarket deep-discounter Aldi, which Ouimet said has been using its private-label brands to make inroads into Wal-Mart’s low-price edge in food sales.

For a retailer like Wal-Mart, with a deeply ingrained philosophy of everyday low prices, the move to dynamic pricing signifies that “something important has happened,” according to Ouimet.

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Down to Business: Amazon hulking over retail landscape | The Daily Gazette.