Today’s Value Shopper Heads to Amazon, Not Walmart

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Walmart became the world’s largest retailer by attracting consumers who were most interested in low prices, not a highfalutin, top-notch shopping experience. So it’s unsurprising that Walmart has received poor ratings in studies covering customer service and broad range of shopping categories. But at least Walmart’s got the cheapest prices and packs in the most value, right? Well, no.

A year ago, a head-to-head study revealed that Target actually had lower prices than Walmart when it came to everyday groceries and household products. More recent surveys show that shoppers who are most focused on value are increasingly turning away from the world’s overall largest retailer to the world’s largest online retailer, Amazon.

YouGov’s BrandIndex specializes in the tracking of brand perception among consumers. If ever there was a prototypical Walmart shopper, it is someone earning $50,000 or less annually. In BrandIndex surveys filtered just for that group’s contingent that at least occasionally shops online, over the last two years the perceived value of goods purchased at Walmart has dropped, while Amazon’s scores have soared.

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BrandIndex scores are based on customer feedback—positive and negative—and can range from -100 to 100. A score of 0 would mean equal amounts of positive and negative feedback, and both Walmart and Amazon are in positive territory. But whereas in 2008 and 2009, when Walmart and Amazon were mostly neck and neck with scores usually in the 40s and 50s, starting around mid-2010 Walmart’s scores consistently hovered in the 20s and 30s, with a most recent score of 22. Amazon, by contrast, seems to be giving more bang for the buck, with competitive pricing, abundant possibilities for free shipping—and BrandIndex scores that have stayed mostly in the 50s and 60s over the past few years. At the beginning of April, it got a 71 value rating.

It’s hard to tell exactly how these figures translate into consumer behavior. But retail analysts consulted by Bloomberg say Walmart knows that more and more consumers—including those at the lower end of the economic spectrum—are shopping online, and that it understands Amazon is shaping up as one its biggest competitors, if not the biggest. Kantar analyst Bryan Gildenberg had this to say:

“Amazon has moved from being this unusual niche competitor for Wal-Mart to a force that can reinvent the industry,” Gildenberg said in a phone interview.

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In recent times, Amazon’s revenue growth was measured at 41%, compared to 8% for Walmart. Some have even speculated that Amazon could surpass Walmart as the No. 1 shopping destination for the winter holidays at the end of 2012.

To battle back against Amazon, Walmart is renewing focus on the online shopping market. This month, is introducing “Pay With Cash,” allowing customers to reserve products online and then pay for them in cash at a Walmart store. The option is aimed at shoppers who don’t have credit cards or other online payment tools, or who’d just shop online and pay in cash.

Walmart also recently pledged to cut $2 billion in costs over the next two years, and to pass those savings along to customers in the form of lower everyday prices. The Star Tribune quoted Carol Spieckerman, president of the retail management firm, who said:

“I think Wal-Mart is still better positioned to maintain its price leadership. The company still enjoys a positive value proposition” among consumers.

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That’s true. It’s just that consumers may have even more positive feelings about other retailers—and they’re more aware than ever that there are plenty of other options for low prices beyond Walmart.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.