Rivals Dogpile on Amazon

Jeff Bezos named his company after the longest and largest river in the world. So it’s appropriate that the past week has shown just how influential Amazon has become in both the online and offline retail spaces, as competitors and the Seattle-based e-commerce giant threw a series of punches and counter-punches.

Try to keep up with the opponents’ jabs:

  • On Friday, real-world retail behemoth Wal-Mart announced price cuts to as low as US$10, and free shipping, for some forthcoming titles by Sarah Palin, John Grisham and Stephen King when pre-ordered on its Web site. The retailer is also cutting prices on books now available in its stores as Wal-Mart attempts a combined bricks-and-mortar/online attack on Amazon’s bookselling dominance.
  • On Thursday, Google announced that next year it will offer Google Editions, the search company’s strategy for online bookstores that will enable consumers to read e-books on any device with a Web browser.
  • Earlier in the week, Gizmodo posted some leaked images of what may be a Barnes & Noble-branded e-reader with touchscreen capabilities. The photos spread throughout the blogosphere, with some headlines actually employing the phrase “Kindle-killer.”

Amazon’s Answer

Here’s how Amazon ducked, weaved and counter-punched this week:

  • Amazon matched Wal-Mart’s discounts Friday, effectively saying “bring it on” to a price war without officially acknowledging it. “Our approach is to offer low prices every day,” Amazon spokesperson Drew Herdener told the E-Commerce Times. The company doesn’t comment on competitor’s strategies, Herdener added, but you can now order Palin’s “Going Rogue” for $9 at Amazon.com.
  • A day earlier, Amazon announced same-day delivery service in six U.S. cities: New York, Boston, Philadelphia, Washington, Baltimore, Las Vegas and Seattle. Ordering before 10 a.m./1 p.m. (depending on time zone) with membership in the Amazon Prime preferred shopping service has the potential to make holiday shopping procrastinators’ lives much easier this year.

    “We want to make online shopping as convenient as possible,” Amazon spokesperson Sally Fouts told the E-Commerce Times. “That’s why we are constantly working on giving customers fast and inexpensive shipping options.Local Express Delivery is a great next step and complements the other shipping programs we offer like Prime and free Super Saver Shipping.”

If you count other recent company moves — lowering the price on the domestic Kindle and introducing an international version for worldwide e-book downloads — one can see that Amazon refuses to stand still regarding both its core e-commerce strategy and its substantial e-reader investment. It’s also evidence that the company is willing to react quickly to the competition. However, the week’s events show just how important it is for Amazon to remain on its toes.

The Biggest Threat to Amazon?

The Wal-mart/Amazon battle could prove to be the most interesting to watch in the short-term, Yankee Group analyst Carl Howe said, considering how strong both companies are in pricing clout and resources. “The Wal-Mart move is, I would say, 100 percent classic Wal-Mart,” Howe told the E-Commerce Times. “It’s like they say, ‘everyday low prices.’ It’s the way they’ve always gone after competitors. That one is easy to explain. They have the supply chain to back it up and the negotiating power with prices.”

Google Editions and another e-reading device on the market, on the other hand, offer some of the same questions currently beguiling Amazon, Sony, Plastic Logic and anybody else placing bets on the nascent e-reader market: If you build it, will people read? Google’s play is more about an online service that would be accessible to a range of devices, including smartphones, but it still involves changing long-held consumer reading habits. That’s despite Google’s deep pockets.

“New competitors are always a cause for concern,” Howe said. “As I said in a tweet earlier, any company that’s making money without government bailouts in this economy is doing something right. Google and Amazon are clearly formidable competitors. But I think the bigger point is whether consumers will read books online. And quite frankly, it’s yet to be proven that (the e-book) is a form the consumers like.”

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