Retailers Beware, Amazon is Coming
A Wall Street Journal article back in March discussed the market share threat that Best Buy faced from Amazon.com. A growing number of consumers had taken to going to Best Buy to test consumer electronics and then going online to get them at a cheaper price. As Greg Melich of ISI Group and others have pointed out before and since then, Best Buy appears to be in danger of turning into Amazon’s "showroom."
It turns out that Best Buy is not the only chain that needs to be looking over its shoulder at Amazon. The e-tailer, according to William Blair & Co. analyst Mark Miller, is gaining ground in quite a few categories beyond just consumer electronics.
William Blair conducted a study of 2,400 items at 24 retailers (22 with stores) and compared them in terms of product selection and price to Amazon, according to a MarketWatch report. The results found that Amazon’s prices on average were 11 percent cheaper than the competition. The price differential was even greater when factoring in free shipping on items priced over $20.
Interestingly, William Blair’s research found that even if Amazon was collecting sales tax, which is wasn’t in many instances, its price would still be cheaper.
Among the chains seen most at risk to Amazon were Bed Bath & Beyond, Best Buy, Dick’s Sporting Goods, hhgregg, Kohl’s, PetMed Express and Target.
"The price-comparison risk for hhgregg is a particularly high concern because of the high average ticket, and 84 percent of the overlapping items are available at lower prices," Mr. Miller told MarketWatch.
Walmart was seen at being only at a medium risk to Amazon, largely because it concentrates on sales of more lower-priced items than the other merchants.
- Retailers Risk Losing Share To Amazon – MarketWatch/The Wall Street Journal
- Forecast for Best Buy: Worst Is Yet to Come – The Wall Street Journal
Discussion Questions: What are Amazon.com’s greatest strengths? As a retailer, what would your answer be to the competitive threat posed by Amazon?