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How-is-Walmart's-Everyday-Low-Price-(EDLP)-Strategy-Game-changer

Since inflation is impacting customers and businesses continuously, it is essential to keep product or service pricing as low as possible. Walmart is the leading eCommerce giant globally, and people recognize it for its EDLP pricing strategy. Walmart's everyday low-price strategy has played a significant role in its success for many years. This strategy helped Walmart differentiate itself from competitors, reduce costs, gain customer loyalty, and generate sales. The online marketplace of the platform is growing significantly with the EDLP strategy. In 2023, Walmart US generated online sales worth 53 billion USD, around 3x compared to sales in 2019. In this blog, we'll explore the Walmart EDLP - Everyday Low Price strategy and walk through how retailers will utilize it to offer value to customers.

What is the EDLP pricing strategy of Walmart?

When a brand or company consistently maintains a low price for products instead of offering discounts or organizing sales deals, it often is an EDLP strategy. Walmart has applied this pricing strategy since the first day of company operations. They built a reputation using this strategy and led the retail industry with a low-cost pricing strategy.

How does Walmart use EDLP Strategy for its Digital Marketplace?

Walmart's Everyday Low Price strategy works on the following principles that you can apply in your online business marketplace:

  • Increased Sales Volume and Reduced Operational Costs: Walmart can generate more sales volume and close more sales by offering products at lower costs than Amazon, which can reduce the cost of operations.
  • Supply Chain Management with Power of Negotiation: Walmart's robust negotiating power and supply chain management allow it to bargain lower product prices from suppliers, and it helps Walmart offer products at lower prices for customers and sellers.
  • Options with Private Labels: The platform owns private label brands like Equate, Sam's Choice, and Great Value, which helps offer lower price options to name brands by reducing product costs for sellers.
  • Direct Sourcing: Everyday Low Price strategy of Walmart: depends on direct sourcing. It allows Walmart to bargain lower prices from product manufacturers and bypass mediators to keep prices as low as possible for customers and sellers.
Walmart's-Everyday-Low-Price-strategy

How to Make a Decision If EDLP Strategy is Accurate for You?

It is essential to consider multiple factors to decide whether the EDLP strategy suits your retail business.

  • Competition: If your rivals use a Low-high Pricing Strategy, offering promotions and sales deals frequently, you can differentiate your business using the EDLP strategy to offer lower prices. But if your competitors also use the everyday low-price strategy, you must use other pricing factors to keep yourself in the competition.
  • Customer Base: The primary benefit of the EDLP strategy is that it attracts price-sensitive buyers who look for the best value-for-money products. If your customers are value-conscious, an Everyday low price strategy may suit your business.
  • Long-term Goals: EDLP strategy works well for long-term goals, as businesses must continuously maintain lower pricing. If your business goals are short-term, you may find this strategy challenging as it may not achieve goals for you.
  • Profit Margins: Retailers need to keep lower profit margins while using the EDLP strategy compared to high-low pricing methods. It means businesses must concentrate on operational efficiencies and cost-cutting to use this strategy and maintain profitability.
  • Supply Chain: To use the EDLP strategy, retail sellers must have strong inventory management and supply chain system to offer low prices consistently. The EDLP pricing method may affect your business goals if your supply chain management needs to improve.

How can E-commerce businesses use Walmart's EDLP Strategy in their Pricing Strategies?

Consider the below factors to apply Walmart's Everyday Low Price strategy to sell your eCommerce products.

Consider offering low prices options or making private label brands with your ownership.

Concentrate on direct sourcing to bargain lower product prices from manufacturers.

Instead of increasing product prices, consider shrinking package sizes.

Explore cost-cutting options like reducing material packaging costs or improving the supply chain management system.

Negotiate lower product prices from suppliers using bargaining power.

You can scrape Walmart's EDLP strategy data using web scraping to learn how they are using it effectively. Study the data you've got using Walmart's everyday low price Data scraping and use insights to develop your eCommerce pricing strategy.

Conclusion

We've briefly shared how Walmart's EDLP strategy is game-changing in eCommerce. If you want to know how Walmart uses EDLP strategy, contact Actowiz Solutions, our team will help you with Walmart pricing data collection services.

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