Walmart, Books-a-Million Now Toasting Marshmallows on Amazon-Hachette Conflagration

9285812653_8eaa7eae43_b[1]When Amazon started short-stocking titles in their contract dispute with Hachette, they signaled a clear willingness to let customers go elsewhere.Late last week 2 of Amazon's competitors thanked them for the gesture.

A few days ago Walmart took belated notice of the contract dispute and started taking advantage. Walmart doesn't carry many titles in store, but they do have an extensive selection of books on their website. According to the email they sent out to the press:

Earlier this week, Walmart reached out to customers to alert them about the online, in-stock availability of their favorite books from Hachette Publishing Group. All books are available online at the everyday low price, which is 40% off the cover price.

We’ve seen a strong customer reaction since alerting them to Walmart’s in-stock availability, with a 70% sales lift for our books category on Walmart.com.

We’re committed to making it easy for our customers to have access to a broad assortment of the products they want, at the low prices they want – including copies of their favorite books that they might not be able to get elsewhere.

Walmart is the third retailer, following Books-a-Million and Zola Books, to take advantage of the ongoing contract dispute between Amazon and Hachette. This dispute has been going on since November 2013 but only went public in early May 2014.

The latest estimates place Walmart's total online sales in the 10 billion dollar range, far smaller than Amazon, but as everyone knows the key to growing that figure is to attract and keep customers. And Amazon gave Walmart another opportunity to steal customers.

And the same goes for Books-a-Million.

This bookseller launched a new section on their website on Friday which focuses on Hachette titles and features discounts of up to 40%, in some cases. This announcement comes in addition to Books-a-Million’s commitment to offer their customers a discount of up to 30% off a wide selection of Hachette Book Group pre-order titles. The discount is Books-a-Million’s way of poking their larger competitor in the eye while also securing better terms for themselves.

But will they be able to keep those terms, once this is said and done?

It's not clear that they will, nor even that this will be an effective tactic against Amazon. Both Books-a-Million's and Walmart's book sales are negligible, and in the long run neither party is likely to compete as aggressively as Amazon. One cannot afford it, while the other has too many other product categories (including more profitable ones) to keep its attention focused on marketing books.

And even if Walmart did decide to make books their focus for building up online sales (hey, it worked for Amazon) I'm not sure that publishers are really going to like the idea of an even bigger and scarier retailer aggressively discounting books. That is less likely to squash Amazon than to steal market share from smaller competitors and independents.

The US book market could end up being dominated by two huge retailers, with even fewer small fry to balance them out. That doesn't strike me as being a better situation than what we have now.

image by Thomas's Pics

About Nate Hoffelder (11582 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

7 Comments on Walmart, Books-a-Million Now Toasting Marshmallows on Amazon-Hachette Conflagration

  1. Amazon angst leads to interesting places: fearful of Amazon’s size and power and product diversity, they “threw in” with Apple and its scheme. Bye-bye small independent bookstores. And Nook and Kobo didn’t exactly prosper.

    I’d love to see what a serious Walmart thrust into books will bring. Somehow I doubt they’ll be doing much for the midlist and backlist, though.

  2. I like the idea that Amazon is fighting for pricing book as they did in the old model. I didn’t buy any agency books… I’m sure many more also didn’t buy them once they moved to agency.

    I think the fear is if you get used to buying a new release at 9.99 in ebook format, you mentally start to shift your thinking in what the value of a book is. Why pay 20 for a hard cover if you can get the ebook for 10?

    • The good news is that if the BPHs want $9.99, the $2.99 to $5.99 indie titles will look a lot more attractive. Just like during the conspiracy…

  3. I hope at some point we get to know how much business Hachette loses during this period in total. I suppose when they report results we will see what the impact was on their Q2 performance. My hunch is it will be far greater than people realize now and over the coming weeks will lead to an agreement being announced. I doubt the lost sales mean nearly as much to Amazon as they do to Hachette. And I doubt shoppers are flocking to Walmart or BAM in nearly enough volumes to offset the Amazon effect. But we shall see!

    • Hachette’s last quarterly report indicated that (publishing) revenues were down 5%, and that was in the early stages of the dispute. I’m almost afraid to guess about the next quarterly report.

      • Thanks Nate. I spent some time last night reading through Lagardere’s 2013 financials and was interested to note that the US and Canada combined only make up 10% of their revenues. Their three-year trends for operating income have been down but flattened out over the past two years. They will next report results in August so you might want to dig into that then and see if there was a YOY Amazon effect. Nice article on Michael Pietsch in the NY Times today; I only wish he had hacked Goldfinch into shape the way he find with Foster’s debut. I was unable to complete The Goldfinch and see from the Goodreads reviews many also felt the same, Pulitzer aside.

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