Richard J. George, Ph.D.

Braintrust Query: Amazon/Walmart.com - An Interesting Battle to Watch

October 20, 2009

FROM RETAILWIRE:
A battle between titans began last week. Walmart announced it will be offering ten highly anticipated hardback books on its website for $10. After Amazon responded to match the $10 offer, Walmart.com raised the stakes by lowering their price to $9. Is there a motive behind Walmart's online book promotion beyond just books?      [more...]

Walmart always has a strategy behind its tactics. In this particular case, I believe the "bricks & mortar" king recognizes the increasing importance of an enhanced online presence. The "book price battle" is the opening salvo of the online war that Amazon has effectively avoided, to date.

Also, this battle takes some of the attention off of Walmart's current issues confronting its more traditional channels. These issues include the following: SKU rationalization, project impact disruptions, and the transition to a greater private-label presence. The battle over books provides an opportunity to increase its online penetration and take some of the focus off of the key initiatives that will affect its performance in the short run. Great strategy!