Wednesday, October 28, 2009

Walmart.com: Part Deux

As I recall, there was some disagreement in the comments section of last Tuesday's post re: the Walmart vs. Amazon imbroglio, so I wanted to clarify a couple of points.

I agree with those of you who (correctly) pointed out that retailers like Walmart and Target don't stock title counts anywhere near comparable to those sported by the major chains or independent book stores. They generally only take expected bestsellers (books by big-name authors like Patricia Cornwell or James Patterson, or by existing celebrities, most of them actors or politicians). I remain concerned, however, for the following reasons:

· The price war is over bestselling titles, which is where publishers make a significant amount of revenue. Should a company like Walmart gain a significant majority of market share in those bestselling titles, they may (and I think they will) use that opportunity to dictate discounting and pricing to the publishers and for the rest of the industry. As I previously mentioned, I think this is potentially disastrous for the major chains and independent stores, some of which are barely turning a profit in the current economic climate as it is.
· In my opinion, Amazon's primary advantage over Walmart.com is their superior selection. Should discounting escalate beyond the current handful of bestellers, though—e.g. into romance titles, children's books, and so on—or if pricing continues to drop on currently discounted titles, say to $8.49, then to $8.00, then to $7.99, then I think the industry is going to be in serious trouble.
· While you, gentle readers, do represent an important subsection of the book-buying market, you are not necessarily representative of the much sought-after bestseller buyer. These are the folks who are going to determine who wins The Great Book War of Aught Nine: the men and women buying The Scarpetta Factor, The Lost Symbol, Going Rogue, The Secret, and so on. If they hand Walmart victory, it's going to be a rough time for the chains and the independents.
· Finally, as was also mentioned last Tuesday, the advent of e-books is going to completely reconfigure the pricing structure of books, which (in my opinion) the industry is, to its detriment, trying to put off dealing with as long as possible. As I said on Monday, I think forcing the industry to not only negotiate the transition from print books to e-books, but to simultaneously completely alter its long-held pricing structure for those print books, is going to be more stress than it can bear in the short term. Maybe I'm not giving them enough credit, but I really think that this kind of change needs to be enacted slowly (not publishing-slowly, but still slowly), and Walmart et al are not going to sit around and lose market share waiting for that to happen.

7 comments:

  1. All good points, Eric. This topic isn't showing any signs of cooling off soon.

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  2. Nice distinction Eric. Although most of us who read your blog won't buy $9 books from Wal-Mart, that's not going to stop hundreds of thousands of books from being sold there to people less discriminant about where they buy.

    Every Bestseller sold to Wal-Mart, Target, or Amazon for $9 is a book that could potentially be sold by B&N, Borders, or a local store (for more). The lost revenues and profits are the lifeblood of those stores, which allow them to carry all our favorite mid-list and new authors, hoping they'll sell off the shelves.

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  3. I do live so much in my own small corner of the world, that I forget that the real market driving forces are not book nerds, but people who (not to stereotype) have read everything that Danielle Steele has ever written.

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  4. Freakin' Walmart...

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  5. I second Anonymous. Freakin' Walmart....

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  6. Reminds me of the movie where Taco Bell won the 'Franchise Wars.' It is scary.

    Also brings to mind The Tragedy of the Commons theory.

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  7. Addional, Right now Target is only matching prices ONLINE not in the stores.

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