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Science & Technology

Wal-Mart Challenges Amazon 'Prime Day' With Rival Sale

ROBERT SIEGEL, HOST:

It may be mid-July, but there's a Black Friday-style sales event tomorrow. At midnight Pacific Time, Amazon is putting thousands of items on discount for one day - but only for its Prime members, the people who pay $99 a year for perks like free shipping. And as NPR's Jason Margolis reports, Wal-Mart is punching back.

JASON MARGOLIS, BYLINE: The idea started innocently enough, a birthday party of sorts.

UNIDENTIFIED WOMAN: On July 15, which is the eve of Amazon's 20th birthday, we're introducing Prime Day, a one-day global shopping event offering Prime members more deals than Black Friday.

MARGOLIS: Wal-Mart quickly countered, offering its own online sale with the tagline, low prices - no admission fee. In a blog post, Wal-Mart's CEO, Fernando Madeira, said, the idea of asking customers to pay extra in order to save money just doesn't add up for us.

Amazon Prime's vice president, Greg Greeley, came back in an email, the idea of charging your in-store customers more than your online customers doesn't add up for us.

So in this battle of the retail heavyweights, who emerges as today's winner? Stephen Beck is a managing partner with the consulting firm cg42.

STEPHEN BECK: I think what Wal-Mart did was a typical miscalculation by an older, slower competitor. So Amazon decided to celebrate its 20th anniversary, and Wal-Mart decided to make it a bigger deal by also celebrating its 20th anniversary.

MARGOLIS: Celebrating Amazon's birthday, that is.

OK. How about a second referee? Brian Yarbrough, a consumer research analyst with the company Edward Jones says, no question - Amazon knocked down Wal-Mart this week. He says Wal-Mart is grasping at straws.

BRIAN YARBROUGH: One-hundred percent. I definitely think it is a confused message when you go back and look at what they've been doing over the last few months.

MARGOLIS: He says this because Wal-Mart is offering its own version of Prime - a $50 online membership. Yarbrough says that undercuts its message today that you shouldn't have to pay a premium to get an online deal.

YARBROUGH: It's funny because the management team, they've talked about how, well, we're going to get away from gimmicky sales, it's all going to be about every day low price, et cetera, and here we are...

MARGOLIS: Promoting a gimmicky sale. Ultimately, Wal-Mart's counterpunch boils down to one thing, says Greg Maloney, the CEO of the retail division of JLL.

GREG MALONEY: The real question is, are they going to be able to lure new customers, or will they be able to lure Amazon customers over to their site or to their store? And being just a value retailer, I don't think that's possible to get all those shoppers.

MARGOLIS: And what about Wal-Mart shoppers? What do they think of all of this? We went to the Wal-Mart in Secaucus, N.J. and spoke with shoppers there. None were paying attention to the tit-for-tat online membership fees. Shoppers like Vanessa Thompson are only paying attention to one thing.

VANESSA THOMPSON: I go wherever the deals are.

MARGOLIS: She shops at both Amazon Prime and Wal-Mart, and she's delighted they're having a price war for her benefit. Jason Margolis, NPR News. Transcript provided by NPR, Copyright NPR.