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Wal-Mart, Amazon Battle For Online Retail's Future
Hugh Pickens writes "The NY Times reports that Amazon and Wal-Mart are waging a price war for the future of online retailing that is spreading through product areas like books, movies, toys, and electronics. The tussle began last month over which company had the lowest prices on the most anticipated new books and DVDs this fall, but has now spread to select video game consoles, mobile phones, even to the humble Easy-Bake Oven. 'It's not about the prices of books and movies anymore. There is a bigger battle being fought,' said Fiona Dias, executive vice president at GSI Commerce, which manages the Web sites of large retailers. 'The price-sniping by Wal-Mart is part of a greater strategic plan. They are just not going to cede their business to Amazon.' Wal-Mart, with $405 billion in sales last year, dominates by offering affordable prices to Middle America in its 4,000 stores, while Amazon, with $20 billion in sales, caters mostly to affluent urbanites who would rather not push around a cart. But Amazon is expanding its slice of the retail pie at an alarming rate — its sales shot up 28 percent in the third quarter of this year; and sales in Amazon's electronics and general merchandise business are up 44 percent. 'We have to put our foot down and refuse to let them grow more powerful,' says Dias. 'I applaud Wal-Mart. It's about time multichannel retailers stood up and refused to let their business go away.'"
Last Wednesday, Wal-Mart dropped the price of the oven to $17, from $28, as part of its "Black Friday" deals. Later the same day, Amazon cut its price, which had also been $28, to $18.
Well, color me confused, I see it as $18 on both Walmart's and Amazon's site.
It began last month with what appeared to be a public-relations-oriented competition on book prices, with both companies (along with Target, based in Minneapolis) dropping prices on books like "Under the Dome," by Stephen King, to below $9.
What? Walmart: $14.49 Amazon: $14.50
Don't get me wrong, this is great news for consumers but I think you're just seeing preperation for a Black Friday feeding frenzy and not actual 'price wars.'
'I applaud Wal-Mart. It's about time multichannel retailers stood up and refused to let their business go away.'
Wal-Mart stays away from heavily populated areas and makes most of its bank from the heartland anyway. I actually see this as Wal-Mart trying to steal a piece of the online pie if it isn't just a little bit of good ole capitalistic competition. If you think Wal-Mart's been losing business, their stock sure isn't showing it.
My work here is dung.
Amazon has one distinct advantage: I will never buy anything from Walmart. That doesn't necessarily mean I will buy it from them instead, but at least I'm more likely to.
Fast shipping. Great customer service. Better prices. And most importantly there are better/quality reviews on Amazon. Sorry Walmart... and btw even locally I would go to Target instead of Walmart.
Q: I am short, useless and provide no value. What am I? A: a sig
Remember all those quirky startups? That was a dead end. The new economy is 3 or 4 giant retailers selling everything.
Huzzah!
In Capitalist America, bank robs you!
Yes! Down with the Amazon monopoly! Give the underdog with twenty times the annual sales a chance! Preserve competition!
Ahhh. You must have used UPS. Pretty much everyone I know here (Ontario) avoids them for cross border shipping. They hit you with a tonne of hidden and unexpected charges and I know people who have been burnt really bad by this (ended up paying more than just buying it retail here)
don't forget Amazon Prime. $80/yr for free 2-day shipping? That's a guaranteed money-loser for them. And I'm shocked by what they include in that offer. They've sent me all sorts of heavy and bulky items including a 70-pound air compressor and a storage cabinet that was about 4'x4'x3', all free 2-day shipping. Beats driving to the store any day. It also gets you upgrades to overnight shipping for $3.99, so unless you absolutely must have it this instant, online shopping wins.
Add 12% tax, $5 customs handling, $45 brokerage, ~$20 shipping, and 6% duty onto just about anything you buy from the US online.
I was under the impression that Canadians liked paying taxes.