The Book war which erupted in the US last week is set to get more serious with the Booksellers Association seeking Department of Justice intervention. The argument is that Aamzon.com, Wal-Mart and Target are using predatory pricing. The discount on top selling new release books is close to 70% off the cover price.
This battle started when Wal-Mart and Amazon engaged in a tit-for-tat price war close to two weeks ago. Walmart.com was offering the books for US$8.99 with free shipping; Amazon had the same books for US$9. Target soon joined in.
While the three retail giants slug it out, smaller booksellers are left floundering in their wake and publishers are wondering whether there will be a long term shift in new hardcover pricing and, if so, what the implications will be for their model.
This is all happening on the backdrop of continuing significant moves on e-reader device sales and digital content promotion.
The recent US experience is relevant to us because it reflects another impact of disruptive technology and the lengths to which major retailers will go to drive their businesses in a tough retail climate.
One way or another, the US book war will impact on book retailing here in Australia. We will have to wait and see the size of the ripples.
The problem with this kind of pricing is that no one has the guts to do anything because the consumer cannot see a problem with it. All they see is the low price and cannot understand that while this is good in the short term, it kills of the little operators that in the longer term keep the big boys honest.
We see it all the time with fuel, grog and now with recharge and to a lesser degree cigs.
Until the Govt steps in and pulls it up nothing will change.
But like I stated earlier, consumers cannot see the damage it causes in the longer term, all we have to do is look at the destruction Walmart has caused in the US
Im glad i dont rely on books. Last week i could buy a best seller from Big W and resell it for less than A and R and still get a 20% return.