An associate ordered a book on options trading strategy from Barnes and Nobel after looking around on the web. He found it at Amazon at the same price but wanted to give B & N a try. He got a confirmation on Saturday that the book had shipped and it arrived today. I asked him why he bought it at B & N rather than at MAZN, he said that he first looked at Borders but found their site clumsy and slow, then he went to B & N and found the book quickly. He checked at AMZN for pricing and it was the same. He wanted to see how well B&N handled the order - he was quite satisfied with the service and said that he would order more books there.
This is just an anecdotal experience but sums up, IMO, the state of competition. A few months ago when Amazon had the field pretty much to themselves, the experience of shopping elsewhere was a drag. Now the competition has come up to speed (at least B&N) so that Amazon's market share is already falling. This competition has just started to have an effect. Borders may never get their act together but they claim that they will unveil a new web site sometime before Christmas. Bertelsmanns, a company with twice the PROFIT that Amazon has in gross sales, will be on-line this fall with a well financed web site and ad campaign. They may not try to compete agressively on price at first, but given that they produce the product rather than just peddle it, they can offer product cheaper than Amazon.com is capable of matching.
This quarter will likely be one of the last ones in which Amazon has a large portion of market share uncontested by worthy competitors. Others have already matched them on "associate" programs and site features. NZMA's market share statistics are already dropping more rapidly than any other leading internet company according to Relevant Knowledge and other web watchers. And Internet Weekly shows that the responsiveness of their site, still among the top ten, has dropped substantially from other internet leaders which have largely improved in this key determinant.
As MM likes to post . . . tick, tick, tick . . . time is moving on and Amazon's dream is fading already. Eventually investors will be stunned that everything that glitters is not gold - Amazon's stock above 70 is fools gold. |
