Issue of the week: Walmart fires Amazon’s tablets

last updated 8 January 2015

Walmart is kicking the competition from its shelves, said Stephanie Clifford and Julie Bosman in The New York Times. The nation’s biggest retailer announced last week that it would no longer sell Amazon’s Kindle tablets. It’s the latest sign that brick-and-mortar chains see Amazon as an existential threat to their business, since Target made the same move back in May. Early Amazon tablets were only good for reading books, but the latest Kindle Fire comes with a built-in Web browser, perfect for buying just about anything Amazon sells, from patio furniture to toilet paper. For Walmart and Target, that’s like putting a “Trojan horse” in every store. Consider Walmart’s move a salvo in the retailers’ war against “showrooming,” said Ann Zimmerman and Greg Bensinger in The Wall Street Journal. Big-box stores are increasingly frustrated that consumers check out products in person, only to turn around and buy them more cheaply online. By booting the Kindle, Walmart and Target are making a strong statement that they don’t want to do their chief online competitor any favors.

Other big-box stores are sure to follow, said Tim Worstall in Forbes.com. The purpose of the Kindle Fire is to sell products, pure and simple, which is why Amazon doesn’t mind that its profit margin on the devices is close to zero. If chains like Best Buy and RadioShack are smart, they’ll stop selling “Amazon order pads” in a hurry. It’s a surprise they haven’t already, said Walter Loeb, also in Forbes.com. Amazon will soon begin experimenting with same-day delivery, a logistical advantage that will further erode big-box stores’ appeal. And I can’t say that’s a bad thing for consumers. Just as the big chains put the mom-and-pop variety stores out of business a generation ago with heavily discounted prices, online retailers are now challenging their brick-and-mortar rivals with lower costs and greater convenience. And “when retailers compete, the consumer wins.”

Don’t be so sure, said Craig Timberg in The Washington Post. Walmart and Target are “acting in their own interests, not those of their customers.” It’s not unlike Apple’s decision to drop the superior Google Maps from the iPhone 5 in favor of its own, error-riddled map app. That may have seemed like a great strategic move back in Cupertino, but it doesn’t do much good for iPhone users trying to get from Point A to B. Similarly, from a business standpoint, Walmart banishing Amazon tablets “makes total sense.” Unless, of course, you’re a Walmart customer “who happens to want to buy a Kindle.”