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Is Walmart Winning The Online Retail Wars?

|Includes: AMZN, Walmart Inc. (WMT)

Here is something that should shock Amazon.com (NASDAQ: AMZN) fans: Walmart Stores Inc. (NYSE: WMT) seems to be beating the Everything Store in the current round of the online retail wars. The latest battle-the July 15 Prime Day Sale designed to celebrate Amazon's 20th anniversary-turned out to be something of an embarrassment for Jeff Bezos' company and a win for Walmart.

Yahoo Finance's Rick Newman evaluated Amazon and Walmart.com's Prime Day performance in four categories: Name Brands, Relevance, Pricing, and Shopping Experience. Walmart.com outperformed Amazon in every category, as you can see. Walmart's final score was 14 and Amazon's eight.

On Prime Day, Amazon offered shoppers a poor selection, a confusing pricing strategy, a limited number of name brands, and a poor shopping experience, Newman noted. He also found that Walmart.com was simply easier to use. Amazon's Lightning Pricing made it hard for customers to tell what the actual prices were.

According to Newman, Amazon's Prime Day had a bargain basement feel to it with come and go deals, lots of off brand merchandise and deals on unusual items. Yet perhaps the most damning criticism of the online pioneer was this comment:

"Walmart offered a lot of mainstream products typical families can use, while Amazon offered a strange collection of miscellanea that could have come from some gigantic leftover bin," Newman wrote. He pointed out that Walmart was offering specials on toilet paper and cribs while Amazon was promoting bargains on anti-callous gloves, 55-gallon barrels of industrial lubricating oil and Fifty Shades of Grey DVDs.

Social Media Hates Prime Day

Newman was not alone in his criticism of Amazon's Prime Day performance. Ad Age reported that Social Media was filled with gripes like this one:

"I'm starting to think #PrimeDay wasn't really intended for me," MaryCatherine Finney complained on Twitter. "There's a waitlist to save 25% on GARBAGE BAGS."

The complaints include that items sold out fast and could not be loaded onto shopping carts. Many customers were also annoyed by Amazon's lighting pricing, which appeared and disappeared at random.

Amazon's Pyrrhic Victory

Although, Prime Day was a success from a volume standpoint; Amazon's U.S. sales rose by 80%, and its European sales rose by 40% on July 15, Ad Age reported. Amazon may have won a pyrrhic victory by sacrificing customer loyalty for sales.

It looks like Amazon messed up big time on Prime Day. It turned an opportunity for good publicity into a debacle that boosted its deadliest rival. A Walmart spokesman told Internet Retailer that the number of customers picking up items ordered online from his stores tripled on Prime Day. That means Prime Day even helped boost Walmart's sagging foot traffic.

Walmart did have a few problems on Prime Day however. Walmart.com was running slowly; it took 7.68 seconds to load on July 15 while Amazon.com took just 3.18 seconds to load, Catchpoint Systems reported. Walmart.com also almost crashed; Ad Age reported that some customers got an error message when they tried to enter the site.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: I conduct online retail sales through Amazon.com.