Is Amazon.com becoming complacent, and resting on its laurels?

I was intrigued to read this article by Karl Denninger.

Walmart has said they expect a 40% e-commerce increase (in dollar terms) over the next 12 months.

Here's my view on them vis-a-vis Out-Amazoning Amazon: Amazon is in trouble.  Serious trouble.

WalMart has done a lot with their online presence of late.  Further, and far more importantly, they do not charge a "subscription fee" for some "premium" tier such as Amazon does with Prime.

Why is this important?  Several reasons:

• Walmart now handily beats Amazon for a lot of products when it comes to price.  In fact if you don't check Walmart's online listing before ordering from Amazon you are a fool and almost-certain to overpay.  It's that blatant now, and has been getting more-so over the last few months.

• You need buy no special plan to get free delivery.  You can, as with Amazon, get free delivery to your house if you have a modest amount spent in one transaction.  However, you can also get free delivery to any of WalMart's stores irrespective of the amount of the transaction and typically the product is there in 2-3 days -- in other words, just as fast as PRIME.  WalMart will hold it at their customer service desk for about a week and you can come get it at your leisure.

. . .

Next up Walmart has announced that they intend to make returns of their internet purchases zero hassle (requiring just seconds) at any of their stores.  That's a huge win over returning something via Amazon where you typically have to go to a UPS retail outlet or similar to drop it off and deal with printing their return label.  In this case just take it with you the next time you go to Walmart, check it back in at the store and it's done.

There's more at the link.

On Sunday morning, I was researching the purchase of some home gym equipment to supplement the strength training that Miss D. and I are currently doing.  After reading Mr. Denninger's article, I decided to do a direct, like-for-like price comparison between Walmart and Amazon (same equipment, same manufacturer, same model, just a different vendor).  To my astonishment, Walmart had the cheapest price every time - and it wasn't a small difference, either.  Across six different products that I wanted, Amazon and/or its third-party vendors averaged 258% - i.e. two and a half times - more than the prices at Walmart.  That's astonishing!  Admittedly, this was for relatively expensive specialty items, not "normal" shopping like groceries or clothing;  but even so, that sort of difference in price is mind-boggling.  What's more, Walmart offered the same free shipping I'd receive from Amazon.  In addition, it was far cheaper than every other online retailer I could find selling the same make and model of equipment - many of whom would have charged shipping and handling fees on top of their retail prices.

Needless to say, I dug out my credit card and ordered what I needed from Walmart without further delay, for about $450 less than Amazon would have charged me for the same goods.  I'll be able to pick up my order at my local Walmart on Thursday.  It's nice to know it'll be held securely for me;  I don't have to worry about someone stealing it from my front porch (which has happened in the past, in other towns).  That's a definite plus.

After that experiment, you can bet I'm going to be much more diligent about price comparisons between online vendors in future.  Amazon has done a wonderful job of making online transactions as easy and painless as possible.  Where the difference in price is very small, I'll probably opt for the convenience of using their tried and trusted services, rather than open accounts at more vendors.  However, when buying more expensive items, the kind of savings I've just enjoyed have been a real eye-opener.  I suspect Amazon has been "coasting", resting on their (well-earned) laurels for customer service, trusting that clients will value that so highly that they won't bother to check prices elsewhere.  For me, that's just come to a grinding halt!  I only have so many dollars to spend.  If I can stretch them further by taking a bit more time and trouble, so much the better.  I'll use Amazon to check user reviews of products I'm considering (it's still by far the best online resource for that), but I'll check prices elsewhere, too, and "follow the money" in terms of savings.

Kudos to Walmart for putting so much effort into improving its online ordering process, which is noticeably easier to use than it was in the past.  They've definitely upped their game.  If their handling of my order is equally good, they're going to become an e-commerce force to be reckoned with.  I think Amazon is going to have to work very hard to maintain its current leadership position.

(For another perspective on the e-commerce rivalry between the two behemoths, see "The Amazon-Walmart Showdown That Explains the Modern Economy".  It's a good article, and worth reading.)

Peter