One Showroom Too Far: Why Wal-Mart Shut Its Doors to Kindle.
Last May, Target, one of America’s biggest retail chains, announced it would no longer carry Kindles. Today it’s the turn of an even larger chain – indeed, the country’s largest. Wal-Mart will no longer carry Kindles either, report Stephanie Clifford and Julie Bosman of the New York Times.
Speculation focuses on the practice known as showrooming. In showrooming, customers enter a retail store and, when they have located the product they’re shopping for, walk out, go home and purchase the item on the Internet at a lower price. Some shoppers simply scan the bar code of the product in the store and order it online on the spot. This in effect makes the brick and mortar store a mere “showroom” for customers to examine products they have no intention of buying there. Last Christmas Amazon actually promoted the practice, alarming and outraging many stores and store chains. We know of at least one publisher that fought back by discontinuing distribution of its books on Amazon.
Though Wal-Mart didn’t give a reason for ditching Kindles, it appears that it was Kindle’s Fire tablet that pushed the retailer over the line. The Fire, a far more all-purpose device than the original Kindle e-book reader, can be used to buy from Amazon countless products carried by Wal-Mart, and buy them perhaps at a price lower than Wal-Mart. “’The Kindle Fire is the Trojan horse,’” the Times reporters quote the head of an e-book recommendation site. “’It’s a shopping platform that covers so many more categories than e-books. It affects Wal-Mart in a different way than the early Kindles and e-readers did.’”
Clifford and Bosman are the same team that wrote up Target’s action last spring. Here’s our posting about that event, and all you have to do to understand what’s going on is substitute “Wal-Mart” for “Target”.
Independent bookstores aren’t the only retailers chafing at the practice of showroom. Just ask Target.
The latest objector is Target, the giant retail store chain. Executives, reacting to what they perceived as showrooming of Amazon’s Kindle e-book reader, informed Amazon they would no longer carry it.
Though Amazon sells most of its Kindles on its own website, many customers like to examine them physically, just as they may now do with Kindle’s rival, Barnes & Noble’s Nook, which may be “road-tested” by customers in B&N’s brick and mortar bookstore. Recognizing consumers’ natural impulse to touch, Amazon began distributing Kindles in big retail chains.
It’s hard to predict what impact Target’s action will have on Kindle sales. With nearly 1,770 stores in 49 states and gross revenues of $65 billion, boycott of a product by Target can have a seriously detrimental impact on any supplier. More ominously, if Staples, Best Buy and Wal-Mart, which also sell Kindles, see themselves as showrooming victims and follow Target’s lead, it could put a crimp in Amazon’s sales – and its image.
For the complete story read Target, Unhappy With Being an Amazon Showroom, Will Stop Selling Kindles by Stephanie Clifford and Julie Bosman in the New York Times.