Walmart today confirmed today that it won’t be selling any more Kindle products going forward, as part of its future “merchandising strategy.” Reuters first broke the story this morning. In an official statement, Walmart said —[quote style="boxed"]Recently, Walmart Stores, Inc. made a business decision to not carry current Amazon products beyond our purchase commitments and existing inventory. Our customers trust us to provide a broad assortment of products at everyday low prices, and we approach every merchandising decision through this lens. We will continue to offer our customers a broad assortment of tablets, eReaders and accessories at a variety of great price points. This decision is consistent with our overall merchandising strategy.[/quote]
So if you want to buy a Kindle at your local Walmart store, you’d better do so now while they have the existing inventory. While Amazon stock is slightly down after the announcement, I wonder if there will be a blip in Kindle sales at Walmart for the next two weeks?
Do you think Walmart had issues with the price it paid for Kindles? I don’t buy that as I’m sure they get squeezed more by Apple for selling iPads and iPods than by Amazon.
Is their decision to drop Kindles surprising? Not if you believe that Amazon is the online version of Walmart. Target made a similar decision back in May. You see, traditional brick and mortar mega-retailers are finding it increasingly hard to compete with Amazon, while Americans are increasingly buying more products and services online.
Even the recent battle over collecting a sales tax here in California, which Amazon is fighting against, will probably not impact the many people who have become so comfortable with buying online as a matter of convenience, rather than price. Amazon’s shipping terms, methods, and costs are also very convenient for many people. The need to drive 10 miles to get it today, just isn’t as strong as it once was.
Amazon clearly sees itself as a broad online reseller of everything! Everything that Walmart also tries to sell. The Kindle line — and the Amazon-branded smart phone if and when it emerges — is the bedrock for every product and service that Amazon sells. This includes books, music, movies, TV shows, and other content in the future. This also includes all the other categories on Amazon.com from housewares to beauty supplies and clothing. As Jeff Bezos has repeatedly said, “We want to make money when people use our devices, not when they buy our devices.”
So Walmart fires Kindle. With Amazon increasingly looking to find ways to increase customer stickiness through its existing and future hardware platforms, I would imagine that selling Kindles outside of Amazon.com would become increasingly rare. At least in the U.S.
I don’t think Amazon will be embarrassed by this. It wasn’t after the Target loss. After all, Walmart was just a big frenemy anyway.
— Randy Giusto, SVP, Innovation Research and Industry Analyst