Wal-Mart, Amazon Battle For Online Retail's Future 272
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.'"
Amazon has one advantage (Score:5, Insightful)
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.
Stereotypes much? (Score:5, Insightful)
Wal-Mart ... dominates by offering affordable prices to Middle America... while Amazon ... caters mostly to affluent urbanites
Because we all know how there are no Wal-Marts along the East or West Coasts, and those backward "middle Americans" don't have the Internet.
We all win (Score:5, Insightful)
No way Walmart (Score:5, Insightful)
Re:Amazon has one advantage (Score:2, Insightful)
Re: Products (Score:3, Insightful)
What? Walmart: $14.49 [walmart.com] Amazon: $14.50 [amazon.com]
The cited prices applied at the book's release. They've gone up in the intervening month.
not really (Score:1, Insightful)
Welcome to the new economy (Score:5, Insightful)
Remember all those quirky startups? That was a dead end. The new economy is 3 or 4 giant retailers selling everything.
Huzzah!
This is a Long Term Fight (Score:4, Insightful)
Good? (Score:3, Insightful)
No matter who wins, the money still goes to China.
Walmart has a website? (Score:2, Insightful)
And you can buy stuff on it? brb while I google that.
considering the arcane state of tax laws, (Score:5, Insightful)
let alone laws governing what can and cannot be shipped to where it is pretty easy to understand that one of the biggest hurdles of establishing a new business is government.
I code for distribution systems myself and the complexity of where items can go, the taxes on each per locale, and even how they must be transported, are mind boggling. Too many times competition includes fighting local governments who seem to find ways to create fines based on that day's interpretation of a law
Wait, WTF? (Score:5, Insightful)
Yes! Down with the Amazon monopoly! Give the underdog with twenty times the annual sales a chance! Preserve competition!
Re:Sales Tax (Score:3, Insightful)
It would eliminate some of the price advantage, but certainly not the logistics advantage. I still shop at Newegg, despite the fact that I pay sales-tax, vs say other vendors like Provantage. Why? because newegg can get it here in ~2 days, while other places like Provantage or GearXS will take a week.
Re: Products (Score:4, Insightful)
Prices have since changed, so the prices you've found don't reflect historical pricing. As for the "Black Friday feeding frenzy" vs. price wars... those aren't mutually exclusive. Periods of high sales volume are when it's most important to be able to adjust prices relevant to competition -- especially if engaged in a price war to capture volume.
Hah. How many Walmarts are there in NJ, the nation's most densely populated state? Lots. How about the San Francisco Bay area, as another poster pointed out?
At any rate, it is competition. What cracks me up is that someone siding with Walmart is claiming that Amazon is trying to drive B&M shops out of existence, and Walmart must defend B&M retail outlets against the predations of Amazon. Seems to me that Amazon is playing the same game Walmart played that drove all the traditional retailers out of business... giving customers lower prices due to reduced overhead.
Re:Wait, WTF? (Score:1, Insightful)
"Wal-Mart probably employs *way* more people, too, so you could even say it's better for the economy ;)"
Underemployment at wal-mart is NOT better for the economy than the mom & pop shops and even smaller chains it replaced. Not by any means. The profits get leeched out of the community, the products are never made in the US.
Re:purveyors of crap (Score:4, Insightful)
Your company's name will be tarnished, and you will get the blame, not Wal-Mart.
I'd say the blame belongs where the customer places it. Brand recognition and loyalty goes both ways, and if a company is going to slap a strong name on a piece of garbage just to get on a Walmart shelf then they deserve the erosion.
Re:Amazon Prime (Score:4, Insightful)
And they are now trialling $6.99 same day shipping in select cities, order before 11am and have it by the end of the day.
Re:Amazon has one advantage (Score:3, Insightful)
It's probably not fair to say they were ripping customers off. Wal*Mart's economies of scale allow it to do things a mom-and-pop simply can't do.
However, when my tire went flat on a Fourth of July weekend, it wasn't the mom-and-pop tire stores that were open. It was Wal*Mart.
Eh.. What about the environmental impact. (Score:4, Insightful)