Amazon vs. Walmart
Published on By Raechel Conover
As American consumers increasingly choose online shopping over bricks-and-mortar retail, Cheapism set out to compare the two superstores in each space: Amazon and Walmart. We embarked on a shopping spree that pitted Walmart, the big-box behemoth, against Amazon, the online superstore, to find out whether the Internet or a physical store is the best source for cheap holiday shopping. We chose these two vendors for several reasons: They are the giants of American retail; they are universally recognized for offering an extensive array of products at low prices; and they represent two very different business models and shopping experiences.
Amazon scores with a huge selection of items and brands and a positive overall user experience. Frugal shoppers appreciate the 24/7 stay-at-home convenience of shopping at Amazon, the low prices, and the free shipping options. The scale of the site makes navigating unwieldy for some, and others may have qualms about ordering items without first looking them over.
Walmart shines in several areas, offering a return policy that's easy to understand and use, price-matching programs, and low prices. The in-store selections are somewhat limited, but Walmart.com expands shopping options. Some shoppers are put off by crowds and slow checkouts and the need to leave home to make a purchase.
Amazon vs. Walmart: The Superstore Showdown
After filling our carts with holiday gifts and checking the bottom line, we concluded that the choice between Amazon and Walmart is a personal call. A strict price comparison shows Walmart is the cheapest, but barely, for a final tally of most items on our shopping list. For a small sample of identical gifts, Amazon wins by a greater margin with the lowest price total. If you figure in applicable sales taxes, shipping costs, and convenience, Amazon retains its lead. But Walmart holds its own with customer-friendly price-matching and return policies.
We started our research by comparing the cost of a list of gifts at each retailer. We shopped at a Walmart store in early October and clicked away on Amazon during the same period. Into our two shopping carts went items from a variety of categories, such as electronics, toys, home goods, clothing, and athletic gear. We quickly discovered that Amazon and Walmart carry very few of the exact same items. Of all the gifts on our list, only 16 were a one-to-one match (same brand, same technical specs). The shopping cart totals for those 16 items reveal Amazon as the cheapest, by $47.51, or 3.5 percent. The bottom line at Amazon came to $1,305.64 compared with $1,353.15 at Walmart. A recent study by the investment bank William Blair & Company used a different methodology but essentially confirmed our findings. As reported by The Economist, the research found that of a randomly selected group of 100 items sold by each, only 28 shared identical specs and these were 5.4 percent cheaper, on average, at Amazon.
But the limited array of identical, cheap Christmas gifts available at both retail venues didn't fulfill our holiday shopping list. So we also searched and compared prices for 41 similar items and found that Walmart bested Amazon by $9.13. The bottom-line total at Walmart was $3010.87 compared with $3,020.00 at Amazon, a 0.3 percent price difference in Walmart's favor. (The NRF survey found that consumers expect to spend an average of $704.18 on gifts and other seasonal purchases this year. We wanted to include an assortment of big-ticket items in our comparison, which made for higher totals.)
Our shopping trip detoured from our usual mission of finding the best low-cost products. This time we zeroed in on price alone and looked for the cheapest item carried by each retailer in a given category. We glossed over judgments of quality primarily because we didn't physically compare one item against another and consumer reviews didn't prove helpful. So keep in mind that, at rock-bottom prices, you sometimes get what you pay for. For example, a Mainstays bath towel we examined at Walmart costs $3.97 and is very basic -- forget plush, warm, and fuzzy. The cheapest bath towel we found at Amazon, the Revere Mills Waverly, costs $11.99 and may be closer to what you think a gift-worthy towel should be.
Differences in inventory aside, a simple price comparison can be misleading. For one thing, prices posted on Amazon change frequently -- in some cases, hourly -- so the prices recorded on the days we shopped in early October may be slightly different when you shop. In addition, shipping costs and sales tax are not included in our cheap holiday shopping cart totals. Obviously, shipping costs are irrelevant if you do your shopping at an actual Walmart store, and they may not matter at Amazon, either; there are no extra charges with Amazon if your purchase qualifies for free Super Saver Shipping or you shell out $79 to join Amazon Prime for a year. Sales tax, however, can affect total cost. Walmart charges sales tax in states that levy one, even when the transaction goes through Walmart.com. Amazon doesn't add in sales tax except when items are sent to a handful of states.Given the similarities in price between Amazon and Walmart, where and how you do your holiday shopping may turn on the shopping experience itself. Online shopping certainly has its appeal. You can click away and submit an order at any hour of the day without leaving home. But navigating the Amazon website can be a challenge. The sorting and filtering options don't always deliver a manageable list of choices; for example, we sifted through hundreds of hand towels and washcloths before locating the cheapest bath towel. Also, there may be some uncertainty about what you're buying because you can't give the item a careful once-over. When you walk around a Walmart store, by contrast, it's easy to find the departments and items you're looking for. (Walmart.com, which offers more than 1 million items, seemed to us more user-friendly than Amazon in terms of search options and results, although we didn't rely on the site as a source for our gift list.) Still, shopping at Walmart means getting to a store during business hours. In the midst of holiday shopping season, especially on Black Friday, traffic in the parking lot and the aisles can be thick, encounters with other customers may be disagreeable, and there may be long lines at checkout. On the other hand, you have the opportunity to touch and inspect the items you want to purchase.
Return policies are another factor worth noting before embarking on your holiday shopping spree. Walmart's 90-day policy is hassle-free. Refunds are handed over right away, even when certain items are purchased online and returned to a Walmart store (return shipping costs are deducted from the refund if you send back what you bought through Walmart.com). Amazon has a 30-day return policy on most items, but longer on holiday gifts; be sure to check the policy for each item you buy. Amazon deducts return shipping costs from the refund, which takes time to be processed.
Price matching is an invaluable aid for frugal shoppers on the hunt for cheap Christmas gifts, and here, too, we found a big difference between Amazon and Walmart. Amazon matches prices only on televisions, whereas Walmart maintains an ad-matching program that meets the price listed in any advertisement the shopper has seen. In addition, a new Christmas Price Guarantee will match a local retailer's advertised lower price on the identical item you already bought at Walmart.
Finally, the elephant in the room: Shoppers seem to either love Walmart or hate Walmart. We came across numerous customer comments, posted online and in interviews, alleging negative in-store experiences, ranging from crude customer behavior to indifferent employees, long lines, and slow checkouts. For some, avoiding all that by shopping from home is worth the more complicated return process, lack of a lowest-price guarantee, and inability to know exactly what the item looks and feels like. That said, we enjoyed a pleasant shopping experience on the days we visited Walmart. The store was clean, employees were polite and helpful, and lines were minimal.
What follows is a detailed, side-by-side comparison of how Amazon and Walmart fare in the cheap holiday shopping sweepstakes. Bear in mind that Walmart's offerings vary somewhat by location and Amazon prices may differ from one day to the next. If you find something cheaper or have different information from what we present below, please let us hear from you in the comments section.
Shopping Cart Test
One of our main goals for this holiday shopping guide is to help you get through the season while staying true to your thrifty ways. We filled our virtual shopping cart with gifts intended for spouses/partners, kids, parents, siblings, grandparents, cousins, aunts, uncles, co-workers, and others you likely have on your holiday gift shopping list. We searched Amazon and Walmart for identical items at the cheapest price but often came up empty. At Walmart, house brands are invariably the cheapest and obviously not available through Amazon. In the best electronic gifts category, for example, each retailer carries a slightly different mix of brands, and where they overlap, the specs usually differ. This disparity in product offerings pushed us to perform two shopping-cart comparisons: one for items that are identical in terms of brand and specs, and one for items that are similar but not exactly alike.
Into our shopping cart went an assortment of consumer electronics (TV, video game components, gaming equipment, video games, DVDs, Kindle, laptop, desktop computer, digital photo frame, iPad, batteries), clothing and accessories (fashion tops, jeans, and sneakers for women and men, slippers, perfume/cologne, men's belt, jewelry), kid stuff (baby onesie, several popular toys, bike), home goods (Keurig coffee maker, mixer, knife block, pots and pans, toaster oven, cookbook, comforter, bedding set, towels, throw blanket, sewing machine, candles, candle holder, abstract artwork, decorative wall clock), fitness/athletic gear (yoga mat, treadmill, golf balls, golf bag), and a few miscellaneous items (five-piece luggage set, men's electric razor, two bestselling books). Our exact-comparison shopping cart included only the TV, a gaming component, gaming equipment, two video games, Kindle, two DVDs, two books, three toys, AA batteries, cookbook, golf balls, and men's electric razor. The grand total for the identical items came to $1,315.50 at Amazon compared with $1,366.01 at Walmart, a $50.51 savings (3.7 percent) through Amazon. The remaining items on our cheap gifts list amounted to $2,998.01 at Walmart compared with $3,010.14 at Amazon, a $12.13 (0.4 percent) win for Walmart. None of these totals reflect state or local sales tax or shipping costs, and the prices recorded in early October may have since changed.
Electronics and Toys
Electronics and entertainment items are popular holiday gifts that often cost a pretty penny. Our shopping cart for this category includes an HDTV, two gaming systems, several video games and DVDs, a Kindle, a laptop, a desktop computer, a digital photo frame, an iPad, and two bestselling books. This is the category with the greatest number of identical gifts offered by both retailers. Prices are also identical, nearly to the penny. A 42-inch LG LCD HDTV with the same specs, for example, costs $498 at Walmart and $497.99 at Amazon. The Xbox 360 sells for $199 at both venues and the paperback edition of Stieg Larsson's The Girl Who Played with Fire is priced at $10.97 at Walmart and $10.85 at Amazon. On the other hand, Amazon's signature Kindle e-reader, equipped with a keyboard and Wi-Fi, carries a $99 price tag compared with $114 at Walmart. Amazon also sells cheaper and higher-end Kindle models, while the Walmart store we visited stocked just this one. We didn't find a digital photo frame with identical specs at Amazon and Walmart, but the cheapest and most similar eight-inch frame each retailer carries comes from Philips; the Walmart version includes a remote and sells for $69 compared with $69.95 on Amazon for a model without a remote. As one shopper advises on My3Cents, it's always a good idea to check the technical specs when comparison shopping because retailers such as Walmart try to keep a lid on prices by carrying models with fewer or different features than the competition.
For the other cheap gifts in this category, we found differences in price and/or shopping options. The two DVDs on our list, The Fighter and Harry Potter and the Goblet of Fire, are cheaper at Amazon (by 50 percent for the Harry Potter DVD, which is priced at $7.49 compared with Walmart's $15). One of the two video games on our list, culled from a report in BetaNews about the best video games for the 2011 holiday season, is almost identically priced (Madden NFL 12 costs $39.96 at Walmart and $39.95 at Amazon) and the other differs by about $3 (Gears of War 3 costs $59.96 at Walmart and $56.99 at Amazon). One minor distinction between Walmart and Amazon in the video games segment concerns product availability. Many of the season's hottest video games will be released throughout the holiday shopping season. If hype and buzz propel a game into the popular stratosphere, it may be hard to snag in a store on release day, so preordering is a fail-safe strategy. With Amazon, you can preorder a copy to lock in the price and guarantee receipt, although not necessarily on the release date. Walmart.com boasts a pre-order option with a 97-cent shipping fee that ensures delivery on the release date.
Toys.Toys, toys, and more toys -- perfect for any child on your cheap Christmas gift list this holiday season. As with video games, we sought expert advice about the hottest toys for the 2011 holiday shopping season and found a helpful list compiled by The Street. Of the 15 items mentioned, the Walmart store we visited carries six and Amazon, the online holiday shopping source, sells nine. For the toys carried by both retailers, prices are quite similar. The greatest price difference shows up in a 12-inch kid's bike by Huffy: Walmart sells an unnamed model with training wheels for $39.97 compared with $51.73 at Amazon for the Pro Thunder model, also with training wheels. Walmart is clearly the better deal, but not only for price: The bike comes fully assembled, at no extra charge. If you order this cheap Christmas gift from Amazon, you're on your own.
Online Clothes Shopping
Shopping for cheap Christmas gifts in the clothing and accessories category involves more than just comparing prices. There are costs and benefits to offline and online holiday shopping for tops, jeans, sneakers, jewelry, belts, purses, and perfume.
Walmart primarily carries clothing bearing its own in-house labels, George and Faded Glory, along with several other brands, such as Levi's jeans. Although choice is limited at Walmart, prices are lower on several cheap Christmas gift items. A Faded Glory top for women is $9 at Walmart, for example, and the cheapest comparable top we found while online holiday shopping at Amazon is a Sag Harbor top for $12.41. A generic pair of slippers costs $9 at Walmart compared with Daniel Green slippers for $10.75 at Amazon. A woman's purse and a pair of men's jeans are also cheaper at Walmart. On the other hand, a $9 Faded Glory top for men at Walmart is pricier than a relatively comparable $7.55 men's top by Van Heusen at Amazon. The price for a man's belt is roughly the same -- $12 when you buy it while doing offline holiday shopping and $11.66 if you opt for online holiday shopping.
Online holiday shopping for clothing at Amazon presents you with scores of brand name choices. In the women's category alone, you'll find labels ranging from A Pea in the Pod and A. Byer to Z. Cavaricci and Zobha. And yet, the process for finding the ideal cheap Christmas gift at Amazon can be complicated. The clothing department is broken down by category -- women, men, juniors, kids, baby -- and each is sliced and diced numerous ways. You need both patience and a strategy when searching for cheap gifts at Amazon. For example, when we typed in the simple search term "women's tops," we got more than 130,000 results, including women's top grain goatskin gloves. There's no shortage of filters to narrow your search -- by, for example, size, style, color, or brand -- and you can sort by variables such as price and popularity. But if you don't have something specific in mind, the hunt for the perfect cheap gift could take a very long time. Moreover, it's hard to assess quality and fit from a picture. Technical specs and user reviews (when available) are helpful but may not provide all the information you need. At Walmart, the stock is logically organized and neatly displayed, so you can quickly find what you're looking for or browse without feeling overwhelmed. Plus, you can pick up a shirt or sweater, say, gauge the quality, and get a sense of how it might fit the intended recipient.
Both Amazon and Walmart carry an assortment of perfumes, colognes, jewelry, purses, and belts. Perfumes and colognes are roughly comparable at the offline and online holiday shopping venues -- a one-ounce bottle of Eternity by Calvin Klein sells for $24 at Walmart and a 1.7-ounce bottle goes for $28.75 at Amazon. Jewelry prices diverge, however: Walmart charges $34 for 10K cubic zirconia studs and Amazon prices similar studs at $44. If you're willing to pay up, you'll find much higher-end jewelry at Amazon. Ditto for purses; Amazon carries designer labels.
Best Home Gifts
Whether you shop at Walmart or Amazon, you'll find a large selection of cheap holiday gifts for the kitchen, bedroom, and bath. Walmart prices are consistently lower, although the items available at the two venues are not identical. A 12-piece set of non-stick Farberware pots and pans goes for $49 at Walmart compared with $65.36 at Amazon, but the outside finishes are different. The least expensive bath towel we found at Walmart costs $3.97 compared with $11.99 for a slightly smaller bath towel at Amazon. A simple 50x60-inch plush throw is only $5.88 at Walmart compared with $12.61 at Amazon for a throw of the same size.
Home Decor.Home decor is a category filled with cheap gift possibilities for the boss or co-workers. Here we looked at candles and artwork and found prices to be very similar and the selection quite comparable. We did have a hard time finding traditional burning candles at Amazon, however. Our search turned up mostly flameless candles, while Walmart stocks shelf after shelf of candles in various colors, sizes, and scents. On the other hand, Amazon scores in the artwork department. The day we shopped at Walmart, there were only three abstract prints that came in one of two sizes (approximately 11.5x11.5 inches and 14x26 inches), whereas Amazon sells a wide assortment of decorative art, including framed photos, abstract prints, and metal wall hangings at a wide range of prices.
Exercise and Athletic Equipment.Some exercise and athletic equipment easily qualifies as a good cheap gift for an active loved one on your list. Our search of the exercise and athletic equipment aisles found cheaper prices at Amazon for similar, but not identical, items. For example, the same 12-pack of Wilson golf balls cost $9.86 at Amazon and $12.86 at Walmart. At Amazon, the cheapest yoga mat sells for $11.83, but Walmart doesn't seem to carry a simple yoga mat; the only comparable item we found was an eight-piece yoga fitness kit for $17. The cheapest treadmill at Amazon, the Merit Fitness 715T Plus, sells for $349.99 (with 250-pound capacity, 18x46-inch workout area, manual incline adjustment to 5%) compared with $587 at Walmart for the Gold's Gym Cross Walk 570 (with 300-pound capacity, 20x55-inch workout area, electronic incline adjustment to 10%, built-in fan, and MP3 port).
Travel Items.If you're on the prowl for a cheap gift of suitcases and overnight bags, Walmart is the price leader in this category: $84 for two uprights and one cargo bag with telescoping handles and inline skate wheels, a carry-on, and a small personal bag. The same five-piece Jeep luggage set is available through Amazon Marketplace for $119.99.
Online Holiday Shopping
Cheap holiday shopping abounds beyond the traditional "storefronts" of these mega-retailers, whether you're shopping through Amazon or Walmart. Walmart.com sells more than 1 million items, including many not found in Walmart stores. Our hands-on test of the site found it well-organized and user-friendly. Walmart.com also hosts a Marketplace where outside retailers approved by Walmart can sell items through the company's website that might not otherwise be available to Walmart.com shoppers. The page showcasing the item clearly states "Buy from Marketplace." Marketplace retailers don't have to follow Walmart.com policies for returns and order cancellations; they can adopt their own.
Amazon also features a Marketplace, but unlike Walmart's, it adds a layer of complication to the site. You may see up to three prices for the same item. If the phrase "Ships from and sold by Amazon.com" appears under the first price on the product page, this is a straight Amazon.com deal. Absent that phrase, the Marketplace seller's name will be noted, which means Amazon is serving as the intermediary and the seller handles customer service, returns, cancellations, and refunds. You may also see a "new" and a "used" price, the latter signaling that a third party (not Amazon) is selling the item. Sometimes an item is sold by an outside seller but shipped from Amazon. In that case, you'll see "Sold by (seller's name) and fulfilled by Amazon," which means Amazon controls shipping and customer service (including return and cancellation policies). Some customers grumble about Marketplace vendors, noting on sites like My3Cents and Epinions that prices are sometimes set too high and used or refurbished items may be in poor condition.
Shipping Costs and Sales Tax.One concern for frugal shoppers when deciding whether to shop at Amazon or Walmart is the cost of shipping. Amazon tries to minimize the potential for bottom-line shock with a variety of shipping options. First is the free Super Saver Shipping, which is offered on purchases of eligible items totaling $25 or more; delivery takes five to eight business days. Another alternative is Amazon Prime: For a $79 annual membership fee you get free shipping and two-day delivery for qualifying items. CNET points out you can leverage the cost of an Amazon Prime membership by sharing it with up to four family members (at your address) or four co-workers who shop on the same account. Consumers seem to like Amazon Prime. One member we spoke with says her orders always arrive within a day or two, and the free shipping makes the final cost seem like a wholesale deal. Reviews of Amazon posted at SiteJabber also commend the shipping service. One committed Amazon shopper says orders often arrive sooner than expected, and even the free Super Saver Shipping rarely takes the stated five to eight business days.
Shipping costs are a non-issue when shopping in-store at Walmart, but they can add up on Walmart.com. To help ease the pain, the retailer's online division just introduced (in time for the 2011 holiday shopping season) free shipping to your home with a minimum $45 order on items that qualify. Walmart.com also offers free shipping on qualifying purchases through a program called Site to Store. Orders are shipped to a Walmart store or FedEx location of your choosing, where you can pick them up. This service is open to any Walmart.com shopper -- no membership required. Items that qualify have a note in the buying options table that says "Free shipping to store." You should figure on one to two days for the order to process and another five to eight business days for it to arrive at the delivery site; you'll receive an email or text when the order is ready for pickup. Thousands of items qualify for free Site to Store shipping; the most common exceptions are perishable, hazardous, or extremely heavy (350 pounds or more) items. A much smaller selection of items can be ordered on Walmart.com and picked up that day at your local store.
Sales tax is another added cost that may affect your choice of Amazon or Walmart. When you buy something at any bricks-and-mortar store in 46 of the 50 states, you're hit with state and/or local sales taxes; Delaware, Montana, New Hampshire, and Oregon are the exceptions. (According to the Tax Foundation, Tennessee's combined state and (average) local sales tax levy of 9.43 percent is currently the highest.) If you shop at Walmart.com, the relevant taxes for your place of residence are applied to the final cost. Amazon takes a different approach to the sales tax issue. The website states that if you purchase an item and have it shipped to Kansas, Kentucky, New York, North Dakota, or Washington, the sales tax applies; orders sent to other locales escape tax-free. As one Amazon shopper we interviewed says: "(Shopping at Amazon is) quicker, easier, and less hassle than going to a store. Plus, no sales tax!" But note: Some states require that you declare how much money you spent on tax-free online purchases during the year and pay up when filing your state income tax return, so be sure to check the laws in your state.
Return Policies and Price Matching
The holiday shopping season is fraught with anxiety for gift buyers and gift receivers. Did you, the shopper, get the best price? Do you, the recipient, like the gift? If the answer to one or both of those questions is "no," you want to be able to return the item without any hassle. This is another variable that may factor into the selection of Amazon or Walmart.
Here, Walmart holds the edge with its straightforward return policy: Items must be in the original package with the tags attached, accompanied by a receipt or gift receipt, and returned within 90 days of purchase. If you don't have the receipt, Walmart can look up the purchase if you know the exact sales date. Failing that, you'll get a cash refund for items costing less than $25 and a gift card for items costing more. The refund on anything returned without a receipt will be equivalent to the price of the item the day it's returned. (For example, if you don't have a receipt and the item has been put on clearance, the refund will be the clearance price.) Some items bought on Walmart.com can be returned to a Walmart store, but check the return guidelines for each item; shipping costs on items sent back are deducted from the refund unless Walmart.com initially made an error. Shopper reviews posted on SiteJabber say returns are really easy at Walmart and its online operation.
Making returns at Amazon isn't quite as simple. The return policy depends on the item, so you need to check the guidelines at the site's Returns Center. Most items have a 30-day return window, with leeway for holiday gifts purchased through Amazon proper, not the Marketplace; items shipped in November and December can be returned until January 31. With no store to visit, you must send the item back to Amazon and processing takes 10 to 15 business days once the item is received. The refund is credited to the account used for payment (e.g., credit, debit, or Amazon gift card) with a deduction for return shipping costs -- unless an Amazon error is the reason for the return. If a gift is returned, the recipient needs the order number on the packing slip and receives an Amazon gift card, via email, in the amount of the gift. If there's no packing slip, the gift recipient must contact Amazon customer service. Despite the seeming hassle of sending something back, many Amazon shoppers posting at SheSpeaks say the process is easy, whether you're dealing with a return, refund, or exchange. One reviewer had very kind words for customer service, noting she received a free upgrade on a Kindle cover in exchange for the malfunctioning one she had purchased.