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Published on October 18, 2009

Posted by Paul Christ

Book Wars! Wal-Mart, Amazon Slash Costs (MSNBC)

Wal-Mart’s troubles in the international market are not slowing down what it is doing in the U.S. as the big retailer is now taking on Amazon in what on the surface seems like loss leader pricing but in reality is much more.  Loss leader pricing is a strategy that is primarily intended to drive traffic to retail stores either to its physical location or online.  But this battle between Amazon and Wal-Mart has all the makings of something much more.  It appears the two are about to go down a road that could test Amazon’s role as the Internet's bookselling king.  And this battle is likely to expand beyond the book market.

In the past seven weeks, Bentonville, Ark.-based Wal-Mart has ratcheted 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 1 million items — from baby products to sports memorabilia — through its Walmart.com site.

Amazon and Wal-Mart can probably handle heavy price competition but who else are likely victims of this battle?

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Published on October 15, 2009

Posted by Paul Christ

M-Commerce's Big Moment (BusinessWeek)

The promise of big things in mobile commerce has been talked about for many, many years – going back to the early cellphone days.  But finally with the evolution of smartphones the time for m-Commerce may soon be here.  Marketers love the idea of people buying through their cellphones (it may be a perfect device for impulse purchasing).  Expect to see this market explode over the next few years.

And now, thanks to the growing popularity of smartphones with rich, detailed Web browsers and easy-to-use keyboards, consumers across the country are finally using wireless devices to buy physical items—not just pizzas and sodas, but also books and clothes and the sorts of things typically associated with in-store browsing or online shopping via personal computer.

It is easy to say that m-Commerce owes a lot to the growth of the Apple iPhone, Blackberry products and other smartphones but besides these devices, what else needs to be in place for this to really be a new frontier for marketers?

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Published on October 15, 2009

Posted by Paul Christ

Wal-Mart's Painful Lessons (BusinessWeek)

Everyone in America knows Wal-Mart is a behemoth and is feared by competitors and suppliers alike.  But outside the U.S. the fear level is not quite as high.  In fact, in several countries Wal-Mart would seem to exercise very little power (e.g., they dropped out of both the German and South Korean markets).  This story looks at challenges facing Wal-Mart as they try to spread around the world.  In particular, it looks at the retailer's position in four markets: Japan, India, Russia and Chile.

The results are mixed: International sales rose 11.5% in the second quarter (before the impact of exchange rate fluctuations), while U.S. sales barely budged. But over the past few years, operating profit margins have declined on the international side, which now has 3,805 stores operating under 53 distinct banners in 15 markets.

Of the four markets discussed which one will be the most difficult for Wal-Mart to gain a legitimate foothold?