Amazon Paying the Price for ‘Showrooming’?
Just in time for the Christmas rush, Amazon is getting the bum’s rush from Walmart stores.
The mega-retailer announced Thursday that it no longer sell Amazon’s Kindle Fire tablets and is removing all Amazon inventory from stores. The move follows a similar step by Target stores in May.
Amazon angered many brick-and-mortar retailers last Christmas by promoting a smartphone app called Price Check that allowed users to compare Amazon’s prices against the price of items in stores by scanning the bar codes — a practice called showrooming. While Amazon has since dialed back promotion of the app, hard feelings linger. The Kindle Fire, which in addition to its digital media capabilities also functions as a mobile Amazon storefront for all manner of items also sold by Walmart and Target, is unlikely to improve relations.
Amazon and Walmart also increasingly compete in digital media, with Walmart-owned Vudu and Amazon Prime Video going head-to-head in VOD movies.
â€śA lot of these technology companies look like theyâ€™re great friends in the beginning, and as they grow and add products, they move from friend to foe,â€ť Fiona Dias, chief strategy officer of ShopRunner and the former chief marketing officer of Circuit City, told the New York Times. In addition to Amazon, she noted that Google’s recent decision to charge merchants to be included in product searches could lead to friction with brick-and-mortar retailers as Google edges into the consumer electronics business, as could Apple’s Passport mobile payments system and the increasing range of items being sold through iTunes.
Best Buy, Staples and RadioShack all said they will continue to sell the Kindle Fire this Christmas, although all are also more dependent on electronics sales than are Walmart or Target.
While the loss of shelf space in Walmart won’t be fatal to Amazon’s Kindle hopes, it does come at an awkward time for the e-retailer. Amazon recently rolled out its next-generation Kindle Fire HD tablets, at a time when the market for tablets is getting increasingly crowded and competitive. In addition to Google’s entry, with the Nexus 7, Microsoft will soon begin shipping its Surface tablets, and Apple is expected to unveil the new iPad Mini in the fourth quarter.