Walmart vs. Amazon: Which is Cheaper?
- August 14, 2018
- Posted by: Max Vanegas
- Category: Personal Finance
Walmart and Amazon are two of the largest and most notable retail entities in the world. Both have a common goal: to convince consumers that they can provide all of their consumption needs at the lowest costs.
Amazon, which operates almost exclusively online, has primarily drawn customers through convenience. Today an Amazon Prime account costs $12.99 per month or $99 annually (if paid all at once) and gives members access to free one-day, two-day, and same-day delivery on millions of items.
Walmart, which operates primarily through its brick and mortar locations, has been attempting to enter the e-commerce market to compete with Amazon. In an effort to provide the widely sought-after convenience factor, Walmart has recently announced that it will offer free 2-day shipping on over 2 million products that are listed on its website. Differently from Amazon though, there is no membership fee required to receive this deal. However, a $35 minimum cart balance must be met.
To further explore the differences between these two companies, LendEDU conducted a study on what really matters - the products they sell and the prices they charge.
To do this, we compiled a list of 50 products and did a cross-comparison analysis to assess which retailer saves you more money. The product list was split into five different categories: Home Goods, Kitchen/Home Appliances, Technology and Entertainment, Food & Beverages, and Miscellaneous Items.
Interestingly we found that the total cart balance of our 50 identical items would be 10.37 percent more expensive if purchased from Amazon as compared to Walmart. Furthermore, Amazon was found to be more expensive in four of the five categories examined, with the widest margin occurring in the "Home Goods" segment.
Amazon did secure a very notable victory however, as it was found to be 22.51 percent cheaper than Walmart in the "Foods & Beverages" category. This statistic suggests that Amazon may be succeeding in its attempt to beat out Walmart by bringing a traditionally physical shopping experience to a much more convenient online setting.
Below, we have listed our data as well as a comprehensive breakdown of each category in order of greatest price disparity to least.
Full Pricing Comparison By Category
Some of the most commonly purchased items, whether they be online or in-store, are home goods that people use every day. Perhaps it may be the nature of these products and their widespread availability at brick and mortar stores that Walmart has them available for far less than Amazon. Out of the ten items that fell under the home goods umbrella, Walmart, overall, was 33.6 percent cheaper than Amazon. Items that were included consisted of hand soap, toothpaste, paper plates, and red solo cups which had the highest price dispersion at 131.96 percent. When shopping for everyday Home Goods, Walmart is an easy favorite to save you money.
Right alongside home goods are the kitchen and home appliances that a majority of households use every day. The total price dispersion for this category was 20.66 percent, with Walmart being $258.28 cheaper in all. The items we chose for this group were based off common appliances that can be found in your typical household. Once again, Walmart proved to be the superior retailer in terms of more cost-effective items.
The Miscellaneous Category can be defined as common items under $100 that people would likely have in their homes for the purpose of utility. Products such as pens, batteries, and common tools are found in many homes across the United States because they are necessary to carry out numerous activities in daily life.
After conducting our research, we found that Amazon is 16.30 percent more expensive in total and 28.96 percent more expensive per item on average than Walmart for miscellaneous items. For example, a 6-Piece Stanley Tools Screw Driver Set is about two times more expensive on Amazon. In addition, a 28qt Igloo Cooler is about 70 percent more.
On the flip side however, a consumer could save almost 25 percent by purchasing a box of 12 Bic Gel-Pens from Amazon rather than Walmart. Furthermore, those who like to barbecue will save themselves about 14 percent on a George Foreman 12-Serving Outdoor Grill.
When it comes to miscellaneous items, it is all about convenience. Some may not mind spending an extra 16.97 percent on Scotch Tape if it gets delivered to their door in the next 24 hours and ultimately saves them a trip to the store. However, if your concerned about your budget and interested in getting the best deal on your purchases, Walmart proves to be the cheapest option for miscellaneous items.
Technology & Entertainment
In respect to price differences for commonly purchased technology and entertainment products, our research found that Amazon is notably more expensive costing 4.92 percent more in total and 4.29 percent more per item on average. This disparity is the narrowest of the five categories that we analyzed.
Interestingly, a recent LendEDU study which conducted identical product price comparisons between Amazon and Costco, also found that the slightest differences occurred with technology products. In that report it was found that Amazon was 2.23 percent more expensive in total and 0.23 percent more expensive on average than Costco.
Although Walmart is generally cheaper when it comes to these types of products, Amazon is certainly worth checking out. For example, a consumer searching for a JBL Flip 3 Bluetooth Speaker could save 18.94 percent by purchasing it on Amazon as opposed to Walmart. For situations like this, it is always wise for consumers to do their research to make sure they are getting the best deals before they click the buy button.
Food & Beverage
Based on our research, Amazon has proven to be more expensive than Walmart in every category – except for Food & Beverage. This is very interesting in light of LendEDU’s Costco v. Amazon study which was conducted in November of 2017. This report noted that Amazon was 120.15 percent more expensive on average and 95.82 percent more expensive in total when comparing identical food and beverage products.
Amazon recently launched its AmazonFresh subsidiary in March of 2017. Furthermore, the e-commerce giant made its acquisition of Whole Foods just a few months later in August of 2017. It is now believed that Amazon has an 18 percent of share the online grocery market. With this new focus, Amazon has not only become more competitive, but according to LendEDU, is actually cheaper than Walmart when it comes to food and beverage products.
Our research of identical food and beverage products from the two companies found that consumers shopping at Amazon will save 20.58 percent on average and 22.51 percent in total on these types of products. Add in the convenience factor of same day and one-day shipping provided to Amazon Prime members and it becomes obvious why many are now choosing to do their grocery shopping from their computers.
Observations and Analysis
Based on our research and analysis, it is very apparent that Walmart is willing to go head-to-head with Amazon to compete for online sales. Because of this, pricing has become very competitive between the two companies. Our study shows that Walmart is still definitely the cheaper option as long as the customer is willing to travel to a physical location to shop or pickup ordered items. However, Walmart has been successfully perfecting its online presence and affordability by utilizing its expansive network of physical locations.
Amazon, although found to be more expensive in four of our five categories, has proven to be cheaper in perhaps the most desirable one, Food & Beverage. While technology products are cheaper at Walmart, they are usually infrequent purchases. For example, a Samsung television will likely remain adequate to a consumer for years before a newer technology surfaces and encourages an upgrade. However, items such as spaghetti pasta, soda, and peanut butter are offered for lower prices on Amazon and are in need of replenishment much more often.
The battle for lower prices and greater convenience shall continue between Walmart and Amazon. Most interestingly though, “We The Consumers” ultimately get to decide the winner.
The data that was featured in this report was acquired thorough examination of both Walmart's and Amazon's online marketplaces. The 50 items that were compared were exactly the same on each site in style, quantity, and model. The prices that were cataloged were taken directly from their respective retailer websites. For Walmart the "in-store" price was used and for Amazon the cheapest price specified on the site was used.
After all the products were compiled, we were able to calculate the price difference of each product. In order to determine these results, the formula was designed as follows:
(Price of Amazon Product - Price of Walmart Product)
Price of Walmart Product
The calculation was then multiplied by 100 which resulted in the percentage by which either Amazon was more expensive than Walmart or Amazon was Less Expensive than Walmart (when percentage was negative). It is important to note that these prices are not fixed and that they are subject to fluctuation between the current time and the time the study was published. Additionally, shipping costs were not accounted for nor were Amazon prime specific bundles or deals. No discounts from credit cards used were included either, including the Amazon Rewards Visa Signature Card, the Amazon Store Card, the Amazon Prime Rewards Visa Signature Card, or any others.