I opened this article with a reference to High Fidelity, a 90s book. Curious? Amazon’s site would let you see that 559 readers reviewed it, with the average rating being 4.3 (out of 5) stars. Wal-Mart’s site has a publisher’s few sentence description of books, with few to no reviews.
I could use examples for other categories – sports gear, house stuff, etc. The fact that Amazon.com, Inc. (NASDAQ:AMZN) has such a massive online head start means its helpful algorithms are unlikely to be beatable for a while.
(iii) The ‘Don’t Fix What’s Not Broken’ Factor
Amazon is dependable. If good customer service were the norm, people would not rave as they do about Apple Inc. (NASDAQ:AAPL) stores, for instance. I’m not saying anything negative about Wal-Mart Stores, Inc. (NYSE:WMT), as I have no experience dealing with Wal-Mart. But it seems foolish to mess with what’s not broken.
And price?
I didn’t mention price because it’s an obvious factor. I checked several items. In most cases, Amazon’s prices were better. In the few cases where Wal-Mart’s product prices were a bit lower, they were mostly lower only if you went to pick up the item at the store. The savings vs. Amazon’s delivery, for those who are Prime members, was very small.
Example:
Model: Black & Decker 6.5-amp 18″ Electric Mower
Amazon:
Price: $148.99 (free shipping for Prime members)
Wal-Mart:
Price: $143.00, but out of stock online. The site notes this model is “not available” at my local stores.
IF Wal-Mart had this model available, I could drive to my local store (3.2 miles away), and spend about 40+ minutes (drive/park/wait in line, load/unload a fairly heavy item) to save $5.99. That’s not worth it to me.
Foolish bottom line
Amazon may lose an occasional online big-ticket order to Wal-Mart Stores, Inc. (NYSE:WMT) and fail to put some relatively new online shoppers in its camp. However, Amazon.com, Inc. (NASDAQ:AMZN) doesn’t need to fear that many of its existing customers are going to flock to Wal-Mart’s (or other competitor’s) site, in my opinion.
As to Wal-Mart’s online efforts, I’d guess they’ll primarily convert some current in-store shoppers into occasion online shoppers. Given its huge number of customers, even a small conversion could be quite successful if these customers bought more online than they would have in-store.
The article Why Wal-Mart’s e-Commerce Push Won’t Budge Amazon’s Core Customers originally appeared on Fool.com and is written by BA McKenna.
BA McKenna has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. BA is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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