Wal-Mart is taking a page from its playbook and has launched a full fledged price war with Amazon.com and a nation of other book retailers by lowering their online prices on certain highly anticipated hardback book titles to nine dollars each.
Wal-Mart has built its strategy on using its massive buying power to undercut competitor’s prices. But it sells enough products in enough categories to make up for any losses on individual items it uses to bring people into its stores.
The barrel of discounts, which began on Thursday when the retailer listed prices for some upcoming hardcover releases such as Dean Koontz’s “Breathless” and Stephen King’s “Under the Dome” at ten dollars, was countered with a similar price cut by Amazon, presently the largest online bookseller. That sparked the two competitors to lower their prices even further to nine dollars.
The book discounts, the latest in a series of aggressive online maneuvers by the world’s largest retailer, could position the company to do to the online marketplace what Walmart stores did to local merchants decades ago.
“While it is the largest retailer in the United States, it’s not the largest online retailer in the United States,” said Albert Greco, professor of marketing at New York City’s Fordham University. “And this appears to be an attempt to increase its position in online sales.”
The price war also is not very good news to the large chain bookstores Borders, and Barnes & Noble, which have been squeezed hard by Amazon.com’s discounting and a decline in their music business.
In the past few months Wal-Mart has sparked up the competition in several retail arenas, beginning with an Amazon.com like announcement in late August that it would allow outside retailers to sell nearly one million items ranging from baby products to sports memorabilia on it’s Walmart.com site.
Next came the news that the low price specialist would fill 90 day supplies of over 300 generic prescriptions by mail for as little as ten dollars each and was also launching it’s own cell phone plan.
And just this week, the company announced it would begin selling health and beauty products online also. But it was the announcement about books that created the biggest stir.
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