Seeking Alpha

Wal-Mart takes advantage of Disney-Amazon pricing skirmish

  • Demand for Disney (NYSE:DIS) DVD titles is on the rise at Wal-Mart (NYSE:WMT) after the retail giant decided to aggressively step into a distribution void left when Amazon (NASDAQ:AMZN) blocked Disney DVD purchases on its website.
  • Pre-orders for Captain America: The Winter Soldier soared 90% after Wal-Mart offered a price cut on the Marvel film to $14.96 vs. the list price of $14.99 on Amazon where consumers can only sign up for an e-mail notification on availability.
  • Analysts note that although DVD sales are only a small piece of the e-commerce pie, any development that levels out the playing field is a boost to Wal-Mart's online brand.  Global e-commerce sales rose 24% at Wal-Mart in Q2, led by double-digit growth in the U.S. and China.
  • What to watch: DVD sales typically peak during the holiday shopping season giving Disney even more leverage in ongoing negotiations with Amazon over pricing.
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Comments (39)
  • Sean Erickson
    , contributor
    Comments (289) | Send Message
     
    I think you could argue that the peaking of dvd sales during the holidays gives the leverage to amazon
    17 Aug 2014, 10:28 AM Reply Like
  • silverscreen
    , contributor
    Comments (217) | Send Message
     
    Not if Disney can find other channels, which is what WMT is offering. Customers want certain products, they don't want certain retailers. Whichever retailers offer the products that they want, they will shop there. What is more important in this story is the opportunity to cross-sell.
    17 Aug 2014, 12:10 PM Reply Like
  • FATUGLY
    , contributor
    Comments (44) | Send Message
     
    @silverscreen............ not true"customers don't want certain retailers" It's soooo much easier to shop on Amazon if they have all of your info and you have prime. All things being equal I shop Amazon first.
    17 Aug 2014, 03:15 PM Reply Like
  • silverscreen
    , contributor
    Comments (217) | Send Message
     
    @Fatugly - I don't dispute that, I have my own preferences too. However, not "all things being equal" now, are they?
    17 Aug 2014, 05:14 PM Reply Like
  • Minutemen
    , contributor
    Comments (1656) | Send Message
     
    Fatugly: And if Amazon doesn't have it? It is just another click or two away to find it conveniently somewhere else.
    18 Aug 2014, 07:48 AM Reply Like
  • deaverb
    , contributor
    Comments (147) | Send Message
     
    Clearly Walmart has become the Avis here, trying harder and getting more trial. Amazon is hopelessly outgunned by Walmart on so many fronts. Now that Walmart has gotten more serious, think of the wonderful situation Walmart is in thanks to Amazon's aggressive behavior, Walmart wearing the white hat? The good guys? Wow. What a turnaround in positioning. I like Amazon as a consumer and a supplier, though a small one. Sorry to see them take on one battle too many, if not more than one. In the last week or so they are now facing Google & Barnes and Noble on one flank and Walmart & Disney on another.... And, Walmart made in 20 days last Q what Amazon made since its inception....
    17 Aug 2014, 10:36 AM Reply Like
  • DrP79
    , contributor
    Comments (2225) | Send Message
     
    "any development that levels out the playing field is a boost to Wal-Mart's online brand"

     

    Wal-Mart is increasing their sales online. Their scale alone means even small changes are huge.
    17 Aug 2014, 10:55 AM Reply Like
  • Gary J
    , contributor
    Comments (6631) | Send Message
     
    It's about time they beat Amazon at something! Even though it changes nothing.
    17 Aug 2014, 12:47 PM Reply Like
  • ClassicLib
    , contributor
    Comments (121) | Send Message
     
    Sure it does. It just demonstrates Amazon is the not the end-all-be-all that you and other Amazon worshipers make it out to be.

     

    They are facing increased competition on almost every front. This includes AWS, which is starting to see big competition/losses to Azure and other competitive cloud offerings.

     

    We are finally starting to see some sanity for this ridiculously overvalued company.
    17 Aug 2014, 02:26 PM Reply Like
  • Gary J
    , contributor
    Comments (6631) | Send Message
     
    Clearly I was talking about the Disney DVD which you chose to make into something else so to reiterate - it changes nothing.
    17 Aug 2014, 02:41 PM Reply Like
  • DrP79
    , contributor
    Comments (2225) | Send Message
     
    Amazon thought it could force the issue based on their size, but competition is self correcting.
    17 Aug 2014, 02:46 PM Reply Like
  • chopchop0
    , contributor
    Comments (4103) | Send Message
     
    Amazon has been losing the profit war for years
    17 Aug 2014, 09:03 PM Reply Like
  • Long Term Value
    , contributor
    Comments (192) | Send Message
     
    I did an on line order with wmt this week. Fabulous experience. Fast, accurate, free shipping (over $50). Would 100% buy again. Other than this I never shopped at WMT.
    17 Aug 2014, 12:53 PM Reply Like
  • DrP79
    , contributor
    Comments (2225) | Send Message
     
    Long Term Value demonstrates the real value of this. WM is getting a customer that they have not reached in the past
    17 Aug 2014, 12:58 PM Reply Like
  • Gary J
    , contributor
    Comments (6631) | Send Message
     
    Does this make up for the many they lose to Amazon every day?
    17 Aug 2014, 01:15 PM Reply Like
  • chopchop0
    , contributor
    Comments (4103) | Send Message
     
    "Does this make up for the many they lose to Amazon every day?"

     

    It's of little consequence long-term. Unlike AMZN, WMT actually cares about making a profit for its shareholders and paying a dividend.
    17 Aug 2014, 01:50 PM Reply Like
  • Gary J
    , contributor
    Comments (6631) | Send Message
     
    "making a profit for its shareholders"

     

    Here is hoping you are not talking about share price which most shareholders would call "profit" LOL

     

    Take a look at a 10 year chart. Or would you rather play the time frame cherry picking game?
    17 Aug 2014, 02:00 PM Reply Like
  • ClassicLib
    , contributor
    Comments (121) | Send Message
     
    Does this make up for all of the new Prime cancellations (myself included)?
    17 Aug 2014, 02:27 PM Reply Like
  • Gary J
    , contributor
    Comments (6631) | Send Message
     
    Prime growth nothing less than spectacular. no time for people who just make stuff up. /done
    17 Aug 2014, 03:43 PM Reply Like
  • chopchop0
    , contributor
    Comments (4103) | Send Message
     
    "Take a look at a 10 year chart. Or would you rather play the time frame cherry picking game?"

     

    You know what the guru himself says....

     

    “In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
    17 Aug 2014, 09:04 PM Reply Like
  • eenk
    , contributor
    Comments (429) | Send Message
     
    Once again Gary makes the point that it was a good idea to buy AMZN 10 years ago.

     

    Thank you, Gary, very helpful.
    18 Aug 2014, 01:13 AM Reply Like
  • Gary J
    , contributor
    Comments (6631) | Send Message
     
    guess you missed out - that's a YOU problem
    18 Aug 2014, 06:53 AM Reply Like
  • eenk
    , contributor
    Comments (429) | Send Message
     
    But whether to buy today -- that's a WE problem, don't you think?
    18 Aug 2014, 07:25 AM Reply Like
  • Long Term Value
    , contributor
    Comments (192) | Send Message
     
    It is really interesting. I never shop at walmart but we use amazon a lot. I will probably never go to a walmart store and I would not have placed the order except I am researching it for investment.

     

    But i can be a walmart customer on line and their price was better than Amazon and I didn't have to buy a bulk amount - i could buy the items one at a time. This is great cause, for example, I don't need 12 Purell hand sanitizers, I just want one.

     

    I cannot do that at costco or at amazon, but walmart did a great job. If they can market to a wider consumer range, they can match amazon on line, i think.

     

    They are doing 10 bill on line now, Amazon is doing approx 80bill. Walmart can take share if they keep at this.
    17 Aug 2014, 01:57 PM Reply Like
  • jpintoctr
    , contributor
    Comments (562) | Send Message
     
    Amazon behaviour with its vendors is unacceptable.

     

    Trying to force one price for all books is like asking Toyota to price its Lexus equally to its Sentra. Or having a Kia priced as a Porsche.

     

    Books are unique human products, not commodities or merchandise as Amazon wants to treat them.

     

    Portraying the publishing companies as Villains is disingenuous and dishonest.
    17 Aug 2014, 02:04 PM Reply Like
  • Gary J
    , contributor
    Comments (6631) | Send Message
     
    What would really be unacceptable is anything else.

     

    Like other than a free market economy where supply and demand do not determine prices. Get over it.
    17 Aug 2014, 02:11 PM Reply Like
  • jpintoctr
    , contributor
    Comments (562) | Send Message
     
    @Gary J How you will price a Nobel Price winner like Garcia Marquez or a great author a JD Salinger compared with a first time un-edited writer?

     

    Book are not commodities and in a free market, producers (authors and it's publishers) should determine the price not a retailer.

     

    By trying to dictate prices to its suppliers Amazon policies seems to follow socialism, not a market economy
    17 Aug 2014, 04:23 PM Reply Like
  • Gary J
    , contributor
    Comments (6631) | Send Message
     
    "and in a free market"

     

    Doing a 180 but at least you're catching on!
    17 Aug 2014, 04:54 PM Reply Like
  • ClassicLib
    , contributor
    Comments (121) | Send Message
     
    Owned.
    17 Aug 2014, 07:54 PM Reply Like
  • jpintoctr
    , contributor
    Comments (562) | Send Message
     
    @Gary 3 Sorry you read it wrong Where do you see 180 change??

     

    I consistently favor freedom of choice and Free Markets, that is why is so up setting to see a dominante party, Amazon, trying to dictate prices to publishers and now studios

     

    History and markets eventually will judge and punish Amszon arrogance for trying to impose "non market" price policies and been disingenuous by claiming to act in favor of consumers.
    18 Aug 2014, 05:50 AM Reply Like
  • ClassicLib
    , contributor
    Comments (121) | Send Message
     
    Gary,

     

    How is the "Bezos is the next Steve Jobs" Fire phone doing these days?
    17 Aug 2014, 02:38 PM Reply Like
  • triode
    , contributor
    Comments (11) | Send Message
     
    If I were a Wal-Mart manager, I would have a 10 foot sign "NOT AVALABLE ON AMAZON" at my video counter!
    17 Aug 2014, 03:23 PM Reply Like
  • DrP79
    , contributor
    Comments (2225) | Send Message
     
    The best place for a banner is on WM's ONLINE site to get the attention of the ONLINE buyer, who like Long Term Value may not be a customer of the physical store.

     

    The banner at the physical store would be nice, but WM is already getting that customer.
    17 Aug 2014, 03:38 PM Reply Like
  • Gary J
    , contributor
    Comments (6631) | Send Message
     
    What a dream job that is huh? lol
    17 Aug 2014, 03:44 PM Reply Like
  • DrP79
    , contributor
    Comments (2225) | Send Message
     
    Store Manager for a Wal-Mart is a good job. Unfortunately not one Gary J would qualify for as the first requirements are

     

    - respect for their customers
    - respect for their employees

     

    Amazing that when a Wal-Mart is announced the number of folks who want to be employees are listed in the thousands.

     

    Yet the reason why Wal-Marts are not opened is because of organized campaigns for political reasons.
    18 Aug 2014, 07:04 AM Reply Like
  • Gary J
    , contributor
    Comments (6631) | Send Message
     
    All correct! I try hard to never be there let alone work there!
    18 Aug 2014, 08:11 AM Reply Like
  • psychological-dividends
    , contributor
    Comments (816) | Send Message
     
    I was in a ratty little village (actually, several in India) this year and what I noticed was Coca Cola billboards everywhere!

     

    "Open happiness"!
    17 Aug 2014, 08:44 PM Reply Like
  • OnlineStockTrading
    , contributor
    Comments (136) | Send Message
     
    Wal mart have smart thinker that's why they always take advantage
    18 Aug 2014, 04:20 AM Reply Like
  • Benjamin Frost
    , contributor
    Comments (462) | Send Message
     
    Amazon is historically best known for its low prices and good customer service. It seems ironic that at a time when both these aspects are floundering, its most ardent advocate here on Seeking Alpha, Gary J, demonstrates, in the sum total of his posts, exactly the opposite attitude to good customer service.
    18 Aug 2014, 10:59 AM Reply Like
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