Walmart is rolling out a new discount program that arch rival Amazon can't possibly copy. The company announced on Wednesday that it will soon offer cheaper prices on thousands of items when they are purchased online and later picked up at the store by customers.
The Pickup Discount, as the program is being called, will launch on Wednesday, April 19, and apply initially to roughly 10,000 items that are normally only available for online purchase. The plan is to expand the discounts to more than one million items in June.
How good are the discounts? Well, they're not going to blow anyone's socks off. For example, at launch, a 150-quart Coleman cooler that sells for $111.49 online with free shipping will be sold for $107.03 ($4.46 less) with the Pickup Discount. A 70-inch Vizio TV being sold online for $1,698 with free shipping goes down to $1,648 ($50 less) if you buy online and pick up in the store.
More importantly, while Walmart is promoting the initiative as a way for customers to save, it may actually be a basic upselling strategy for the company. Initially at least, the discounts seem to apply only to higher-end, higher-priced alternatives to similar items the company sells in stores. There is a different 150-quart Coleman cooler with fewer features than the one above that sells for just $84 at Walmart. The retailer's website also shows that a different 70-inch Vizio TV can be purchased at Walmart stores for $1,298—or $350 less than the one highlighted in the new Pickup Discount program.
Granted, these are not apples-to-apples comparisons. But it appears as if Walmart wants to use the "Pickup Discount" to nudge customers into spending more overall, not less.
Walmart's other motivation for introducing this new program is, quite obviously, to nudge customers to go into physical stores. The company explains that the new discounts are possible because "it costs less for us to ship to stores," and "our customers should share in those savings."
What's left unsaid is that by convincing shoppers to enter stores rather than opt for free shipping it opens up the very strong possibility that those shoppers will pick up groceries and other essentials while retrieving their online purchases. They're also likely to browse a bit and make unplanned, impulsive purchases while employees are getting the online orders ready—a process that isn't necessarily smooth or fast, as many Walmart shoppers know.
Again, the net result here is one that Walmart wants: Shoppers wind up spending more, not less. And, most importantly for Walmart, they're doing that spending with Walmart, not Amazon.