Amazon.com ly Seattle. It took some ribbing from a handful of
analysts who criticized the e-tailing giant’s money-spending ways over the
handling of the Harry Potter epic The Goblet of Fire. The theory
goes, Jeff Bezos has been promising to curtail Amazon’s customer
acquisition “at any cost” strategy ever since Wall Street started demanding
profits from profitless dot-coms. And, the company lost big bucks on this
latest stunt.
I couldn’t disagree more with the rebuke of the pioneering bookseller, and
it’s a guesstimate at best of exactly how much money has actually been lost
when all factors are weighed. A couple of watershed events took place
during the weekend that some pundits may have overlooked. I’ve simply got
to start with the obvious, or not-so-obvious coup, depending on where
you’re sitting. Barnesandnoble.com .
Maybe this rivalry was over a long time ago. We all know the circuitous
route taken by brick-and-mortar Barnes and Noble in
spinning off its online sibling cost the parent company dearly. By the time
baby barnesandnoble.com hit the new issues market, investors weren’t
willing to award plain vanilla booksellers with rich premiums. By summer of
last year, Amazon.com had more in common with Wal-Mart , and the market cap to prove it.
The latest episode in the mind-share battle over books on the Web draws a
clear illustration why the market thinks barnesandnoble.com is worth a
paltry $200 million, about the market cap Amazon gains and loses in an
average trading day.
Apparently someone neglected to send barnesandnoble.com the memo that
foretold Christmas would be arriving in early-July for thousands of boys
and girls, and perhaps more importantly, working Moms and Dads. Meanwhile,
Amazon was busy preparing a preemptive strike that would blanket online and
offline media with feel-good stories of its grandiose exploits.
Dubbed the biggest bookselling event in e-commerce history by none other
than the king of e-tailing, Amazon tag-teamed with FedEx to deliver a highly publicized marketing blitz that would have
made P.T. Barnum green with envy. Oft sounding more like a sophisticated
military operation, the event collected more goodwill, free publicity, and
buzz than any string of multi-million dollar Super Bowl ads. And rival
barnesandnoble was missing in action.
Amazon blew the doors off most consumers expectations by pricing the
hardbound Harry Potter book 40% off the cover price, or $15.57. In the week
preceding the “big literary event,” barnesandnoble.com priced the book 30%
off, or $18.16. Not until hours before the Harry Potter book would go on
sale did barnesandnoble execs finally match Amazon’s bargain price. But by
then, the damage had already been done. And Amazon had already won. Again.
According to Amazon’s nifty hour-by-hour Muggle count, the company has shipped nearly
400,000 copies of the bestseller, rivaling even offline Barnes & Noble. A
barnesandnoble.com spokesperson announced roughly 7,000 orders per day
rolling in. At that rate, it would take barnesandnoble.com about two months
to catch up. Which not-coincidentally has been the story all along between
these two rivals. The early bird gets the worm. Or a day late, and a dollar
short. Feel free to choose your own adage.
Smaller brick-and-mortar bookstores spent their share of time gnashing
teeth at Amazon’s one-upmanship. They claimed the company couldn’t offer
that extra mile of personal service. Well, anyone who says that, never
ordered a book from Amazon. My own Mom is an analog gal in a digital world,
and you should have seen the way she gushed at the little brown-paper
package so carefully gift wrapped when it arrived from drizz
left a more profound impression than any Mom and Pop shop, and that’s a fact.
Sure, Amazon.com has to get its finances under control. While Wall Street
has punished the company recently for its sagging credit rating, Main
Street has also rewarded Amazon for its aggressive stride to be number one.
One school of thought has Amazon filing for bankruptcy in a year, while the
other has the e-tailer turning the corner to profitability. I’d bet
neither. Although I wouldn’t be the least bit surprised to see a
deep-pocketed merger involving the company, don’t hold your breath for
Amazon to fold its tent.
On a side note, did you know The Goblet of Fire is nearly 700 pages?
Sheesh, that’s longer than Alex Haley’s Roots. But one thing I have
to say without a doubt, is that anytime children get this excited over
reading, that’s a win-win for everybody in my book. Kudos to Joanne
Rowling, Scholastic , and Amazon.com’s Kevin
Spacey look-alike for another job well done.
Any questions or comments, love letters or hate mail? As always, feel free
to forward them to kblack@internet.com.
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Harry Potter or Bust
