Wal-Mart and Amazon.com are battling toe-to-toe in the book market. Shortly after Wal-Mart announced plans to sell 10 new books for $10 apiece yesterday, Amazon.com announced that it was matching the price. Wal-Mart responded by saying that it would sell the books for $9.
Wal-Mart is serious. According to Walmart.com’s CEO Raul Vazquez:
If there is going to be a ‘Wal-Mart of the Web,’ it is going to be Walmart.com. Our goal is to be the biggest and most visited retail Web site.
My take: Maybe it makes sense to aggressively compete for book buyers with low, low price. I can see the rationale for this strategy: Books are already a commodity, so why not cut prices and build scale so you can squeeze cost from the supply chain and cross-sell other products. But that’s a very boring and uncreative strategy.
So how would I go after this market?
I’d add value to the overall experience. The first step would be to uncover the unmet needs, wants, and desires of different segments of book buyers. This would include ethnographic studies of how consumers buy, use, and discuss books as well as an examination of successful independent book stores. I would then use this information to create experiences that would reduce some of the price sensitivity
Even without the research, I can already think of potential options for creating value for some segments of book buyers:
- The Reading Plan (return a purchased book for a specific price based on how long they keep it and the condition of the book when it is returned. Return could be cash or credit towards another book).
- Usage Price Plan (the price of a book takes into account the return price; buyer agrees to return it in a certain time in a certain condition).
- Author Appreciation Plan (buy a book from an author and you can return it for a significant discount on another book by that same author).
- Book Loyalty Club (buy “x” books and you get the next one for free.)
- Virtual Book Club (earn points based on book purchase and turn points in for experiences like presentations from authors, books with personalized signatures from the author, discussions and lectures from literary figures and professors, and early access to new books).
- The NetFlix Plan (pay a fixed fee for a certain number of books you have out at a time. Maintain a queue online and get the next book in the queue after you send back your current book).
The bottom line: Book buying experiences don’t need to be a commodity.