Thursday, October 22, 2009

Book Wars

In case you haven't heard, Wal Mart has thrown down the gauntlet to be the number one reseller on the internet. One of the things they've done that has caused a real stir in the book world is to drop their price on the top 10 pre-order hardcovers to $8.98 per book, including shipping.

Now that's a crazy deal. The retail price matters not; all of the top 10 are all $8.98. Originally they were being offered at $10, which Amazon promptly matched, so Wal Mart dropped the price to $9. When Amazon matched that, they went down a penny. When Target matched that, they went down another penny.

Wal Mart's CEO expressed his goal of making Wal Mart the biggest online retailer, with the lowest prices. Wal Mart has also adopted the same business model as Amazon, featuring merchandise from 3rd party vendors on their site along with their own.

Those of you who follow this blog know that I am a defender of Wal Mart from all those folks who think that they are evil. So what do I think of this new push to be the internet online store leader?

Sorry, but Wal Mart is 2nd rate compared to Amazon. There is no comparison.

I looked at Wal Mart's site tonight and indeed, they are offering some pretty good prices and in many cases (this is from looking at the blu rays), lower than Amazon's price. For example, the Wizard of Oz special edition blu ray is $46.86 at Wal Mart compared to $49.99 at Amazon. Factor in sales tax, however, and in the land of waste o'plenty (California in case you didn't know = Waste Mart), that jacks up the price to $51.43 (in L.A. County). On top of that you have to pay for shipping, whereas Amazon has free shipping on many items over $25. Wal Mart offers free site-to-store shipping but who wants to go to a Wal Mart and hassle with them to pick up your order? I'd rather stay at home and let the UPS guy hassle with traffic to deliver it to me.

While Wal Mart has improved the look of its site and also the ease of navigation, it is still miles behind Amazon in terms of breadth and design. Amazon has tons more merchandise, the benefit of not charging sales tax, numerous customer reviews (sorry, but many of the customer reviews on Wal Mart sound like Grandpappy McCoy wrote them after just learning how to type on a computer) and overall a higher level of sophistication.

Of course, the competition is good for us consumers, at least in the short run. I don't see how a price war winds up being good for anyone because eventually you price yourself out of business. These two giants have the megaresources to duke it out for a long time, though, so it will be interesting to see what happens.

My bet is on Amazon. The image of Wal Mart being a dinosaur when it comes to technology just won't disappear from my head.

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