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Walmart Draws Line in the Sand With Amazon

Posted by Dale Buss on September 21, 2012 04:19 PM

Enough is enough, Walmart seems to be saying. That's why America's largest retailer no longer will sell Amazon's Kindle tablets after the store chain runs out of its current supply.

Enough of what? Although Walmart said little in its official statement about its decision, it's clear that more and more bricks-and-mortar retailers are resisting "showrooming," in which their physical, tangible displays on their expensive physical, tangible real estate turn into a mere testing ground for consumers who then turn on their heels, walk out of the stores without buying a tablet there, and order them online.

Most of Amazon's Kindles — which began as e-readers but now can stream a wide variety of digital content — are bought online from Amazon. Target said in May that it would stop selling Kindles. 

Also, Walmart had had enough of Amazon's perceived tricks such as what the online retailer did last year during the annual holiday fistfight between the retailers (and eBay): promoting a smartphone app called Price Check that allowed users to compare Amazon's prices to those at stores by scanning bar codes.

Is that enough of enough? There's more: Walmart also was unhappy, the Wall Street Journal reports, with Amazon's decision to offer a cheaper Kindle Fire product that contained advertising without disclosing that consumers could remove the ads after paying a $15 fee.

In short, Forrester Research analyst Brian Walker told WSJ, "Walmart and other retailers don't want to facilitate Amazon in any way."

"The Kindle Fire is the Trojan horse," Andrew Rhomberg, CEO of Jellybooks, an e-book recommendation site, told the New York Times. "It's a shopping platform that covers so many more categories than e-books. It affects Walmart in a different way than the early Kindles and e-readers did."

Walmart is continuing to sell other tablets even though, according to analysts, the margins are slim on all except Apple's iPad. And while Amazon clearly is doing just fine selling Kindles online and at other, remaining bricks-and-mortar chains such as Best Buy and Staples, the loss of Walmart real estate just before the Christmas shopping season can be expected to sting.

But meanwhile, Amazon keeps marching to its own, unique drummer. The company just announced that, like Apple, it is ditching Google Maps in favor of an in-house solution that is powered by data from Nokia.

The ongoing digital revolution will continue to create more such frenemies.

Comments

Dan S. United States says:

Interesting move by Wal Mart. It is truly brick and mortar vs online and I will be watching to see how all of this plays out. Perhaps Wal Mart has the clout to launch a low priced version of the e reader themselves?

September 24, 2012 10:00 AM #

Comments are closed

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