A message from Bezos - welcome Zappos friends; you will be assimilated... world domination will soon be ours. (as much as I complain about overpriced CEOs, certain guys like Bezos deserve every penny for what they have created - great company, great leader)
Then we have Walmart, which ironically has one of the worst charts out there after a stellar 2008... (people are fleeing it as we anticipate the 2nd half 2009 recovery) - taking a direct blow at Best Buy (BBY). With the bankruptcy of Circuit City, Best Buy should be prospering but as the pooring of America continues Walmart is taking more and more share of the formerly middle class and even striking higher up the food chain. Remember, for now it appears we have deflation in things we want (clothing, electronics), and inflation in things we need (food, energy).
And if you want to see electronic deflation at work (to be fair electronics prices are ALWAYS falling over time), see what Walmart has planned in the back to school area. I think this is a very smart move, as consumer electronics is the one thing that will hold up reasonably well - just look at these teens and preteens; their electronic gadgetry is attached to their bodies. Social networking is not a choice (opt in, opt out) - it's the lifestyle. I didn't think Walmart would be a direct competitor to Best Buy in some parts of electronics, because of a lot more selection at BBY but many consumers - again - are being forced to go low end, whether they want to or not. $300 laptops? (no not netbooks, full fledged laptops) - that's going to drive foot traffic magnificently.
- Wal-Mart Stores Inc has expanded its laptop selection by 40 percent and will be aggressive in pricing the computers and the accessories to go with them as the discount retailer looks to win sales from frugal back-to-school shoppers.
- Starting this Sunday, Wal-Mart will begin selling an exclusive Compaq Presario notebook computer that it developed in partnership with Hewlett-Packard Co for $298. A similar unit currently sells at Wal-Mart for $548. "You're going to see us focus dramatically not only on price, but the value for that price."
- The Presario notebook will be selling at a price that would normally purchase a less-capable netbook laptop.
- Wal-Mart is looking at the back-to-school season as a chance to showcase its expanded selection of notebook and netbook computers, with Severson saying laptops are becoming a staple item for students of all ages.
- "There's no question that our customer is shifting from a desktop solution to a portable laptop solution," Severson said.
- He also said Wal-Mart views low-cost netbooks as a "growth" category. Netbooks, the bare-bones PCs, generally sell for $300 to $400, but prices are dropping as new offerings flood the market and wireless carriers offer subsidies with the purchase of a data plan.
- Retailers have started the back-to-school shopping season on shaky ground as consumers show an unwillingness to spend on anything but basic goods. According to a National Retail Federation survey, the average family with children in kindergarten through 12th grade plans to spend 7.7 percent less on school gear this year than a year ago.
- One bright spot in the survey was consumer electronics, where students plan to spend more. In addition, nearly 75 percent of respondents said they intend to shop at a discount stores for their new school purchases.
- To gain leadership, Wal-Mart is following tactics it used to become a major player in flat screen TVs -- expanding its selection of name brands while trying to beat the competition on price.
- Wal-Mart has already started its back-to-school push in earnest and is offering Dell Inspiron laptops for $398 in colors ranging from pink to purple to aqua. The retailer also stocked accessories to match the colorful laptops, like $60 Western Digital hard drives and $25 Logitech cordless optical mice in black, blue, pink and red.
- Wal-Mart said the Dell offering was a popular one, and it expects a similar response for the Compaq Presario that goes on sale July 26. It will have 3 gigabytes of memory, a 160 gigabyte hard drive, and it will come pre-loaded with Microsoft Corp's Windows Vista operating system.
- On Sunday, Wal-Mart will also cut the price of an Acer laptop with an 8-hour battery by $50 to $548. The computer has 3 gigabytes of memory, a 320 gigabyte hard drive and qualifies for a free upgrade to the Windows 7 operating system when it is released.
- Wal-Mart will unveil more offerings during the summer, like a mini netbook by Hewlett-Packard and a Dell laptop with 4 gigabytes of memory and a 500 gigabyte hard drive.
- Severson said Wal-Mart is looking at ways to offer shoppers deals on netbooks that come bundled with a wireless plan. "We're having conversations with carriers and with the hardware manufacturers around that, and are really trying to find where that great value sweet spot is," he said.
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