Amazon attempts to challenge the all mighty retail chain Wal-Mart this holiday season. This all started when Amazon went head to head with matching the low prices of Wal-Mart of new books and DVDs. This price war set a precedent for the dropping of prices of all types of things, ranging from Easy Bake Ovens, to Xboxes, to cell phones.
However, the war between them is more than about price alone. The future and new technology play a huge role in this battle. Though online retailing is onyl 4% of retail sales, it is rapid spreading, it did not suffer as much from the economy, and access to online shopping is faster and easier to access. There is still the factor of instant gratification that offline shopping provides. However, Amazon now has same day shipping.
Do you think Wal-Mart should be seriously concened? How wise is it that prices are already so low before Black Friday? How will it hurt the economy, or do you think it's a good thing? How has online shopping revolusionized the retailing industry? Do you think the easiness to compare for the best prices is going to help or hurt our economy at all? To read more, the link is embedded in the title.
-Sandy Chen
Tuesday, November 24, 2009
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9 comments:
Which would yield more profit: more customers and lower prices, or less customers and higher prices? Would the profits be the same? Or are their ulterior factors favoring one over the other?
-Julia B.
I had the same question as Julia. But instinctively, I would think that lower prices and more customers would yield more profit, but that's just because I come from a family that does that and have been exposed to other people who do that too.
Well either way, personally, I'm happy that things are getting cheaper.
-Yuzo Yanagitsuru
I saw a news broadcast that said retail shopping is lowering prices a little more than last year so people are still able to shop on Black Friday even with the economy. However, they are worried that people will be more resistance to buying in the bulk this year they way we have in years passed. Stores are stocking less items so that costumers feel the need to buy rather than wait so they don't miss the item. Perhaps this is true for technology items too, which are still more expensive than other items even with price cuts. By this point, I would also say most people already have phones, computers, ipods etc and so the demand for these items is alot lower.
Sally Shearer
I think it would be more profitable to have more customers and lower prices. This way, more people can buy their products. Even the poorer families can purchase cheaper items and they will gain profit from them too instead of just the richer families. It works out both ways.
From the perspective of a bassist, I see it as such: The higher quality basses are more expensive yet, far less people own them. The lower quality basses are much less expensive and the masses of bass players own these. This rule applies here as well because I believe more people will be buying more things at lower prices than less people buying more expensive things. Even though the quality of the items remains the same, price matters in this economy. The cheaper something is, the more likely it will be bought.
However, a counter example to this is something like grey goose vodka. Just like any other vodka, yet people will pay more for it and this is caused by ADVERTISING.
Overall, I feel like the economy will be hurt by this black Friday surge because many people are buying on credit, so they are using money they do not actually have.
This shopping craze of Americans is kind of unsettling when you think about it. We are SOOO materialistic it is not even funny anymore. something should be done. We need to value mankind more than stuff we accumulate and then never use again.
Black Friday is an annual event that almost everyone knows about. The media does a good job promoting this day, in which people save up to stock up on items for the year. MOST items that are on sale still don't go below the manufacture price; therefore, the companies are still profiting.
Market analysts take Black Friday seriously, as they do with quarter expectations, yearly expectations, etc etc. If the company doesn't reach their expectations, the market falls and vice versa.
I believe that the CFOs of these companies are educated in the 'profit' aspect. Each company has its own expectations that needs to be met in order to 'break even,' or become a bull and bear market. Studies show that in the past years, hype for black friday has grown so I think the analysts should be careful what their expectations should be.
No, this won't kill our market or get us out of the recession, but it can be the start of a very positive momentum. With the holiday season rolling around, you never know.
Just hope that the annual/quarter expectations are met and we'll be fine.
I don't think Walmart should be worried. In my opinion, online shopping will never be as good as buying from retail stores. When you shop online, you're not seeing the whole product, you're seeing pictures of it. So when you buy things online, you may get things slightly different than what you see. For example, a computer you buy online might end up being a slightly different shade than what you saw. Also, regarding clothes, you don't have the luxury of trying them on like in retail stores. So if you buy a pair of shoes online, there is always that possibility that those shoes don't fit to your true size, and so when you order them based on your regular shoe size, they may not end up fitting. This is where retail stores have the upper hand over online shopping, and because of this, I don't think Walmart will face that big a competition from amazon.
-Michael Chan
Yeah, I also don't think that Walmart should be that worried. Are Amazon's prices still cheaper than Walmart's even after the ridiculous shipping fees? Although, I guess it is more convenient for people to buy something while sitting at home, more people might not want to pay a shipping fee or wait such a long time to get a product. I think that is why most people just put in that effort of going to stores. I know I'm waiting for something I ordered last Friday and had it been in a store, I would have gone to the store.
-Henry Zhang
As an avid online shopper (I can't stand lines, crowds and stores) I think Amazon will definitely go neck to neck with the super store. Amazon offers free shipping for a year and THERE IS NO SALES TAX! That alone is reason enough to aviod Wal-Mart and go shopping from the comfort of your own home. I think this will put the economy in the right direction because now people have the option of not paying taxed (more money in your pocket!) and can even save money on gas (even more money in your pocket!).
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