In the era of Big Data and sophisticated algorithms, major retailers such as Amazon (AMZN),...


In the era of Big Data and sophisticated algorithms, major retailers such as Amazon (AMZN), Target (TGT), and Wal-Mart (WMT) keep pushing for a pricing edge. The gamesmanship includes changing prices hourly and undercutting heavily promoted deals from rivals by cents. But the biggest winner of all may be consumers. Tracking data over the holiday shopping rush shows a higher sell-through rate on items where retailers give up the most margins as mobile-empowered shoppers see through false markdowns. On watch: A potential casualty of the trend of real-time pricing could be dollar and bargain stores.

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Comments (3)
  • krk
    , contributor
    Comments (856) | Send Message
     
    These tactics of racing to the bottom brings to mind the proverb:
    In the land of the blind, the one-eyed man shall be king.
    1 Dec 2012, 11:38 AM Reply Like
  • MohanTX
    , contributor
    Comments (133) | Send Message
     
    Market Share as well as profit margins to be maintained for a successful business model. AMZN wants to be a profitable company and wants to be a disruptive company for existing brick and mortar businesses by lowering profit margins.

     

    It is trying to be a disruptive force in IT warehousing space. The competitors are fighting by lowering prices. Wine Shop is another area where success is still not obvious.
    So, it is apparent, that AMZN will not be consistently successful. I would not buy this stock and possibly short it.
    1 Dec 2012, 11:40 AM Reply Like
  • chopchop0
    , contributor
    Comments (5157) | Send Message
     
    yup. As they say however, "The market can remain irrational longer than you can remain solvent"

     

    I think WMT and AMZN are going to be the yin and yang of the consumer retail space. WMT is already pushing into mobile commerce heavily with things such as order online and pay with cash at pickup. Once the sales tax advantage is removed, I think you may see AMZN have some sort of B&M presence (not a full retail outlet, but rather a place to pick up merchandise)
    1 Dec 2012, 12:00 PM Reply Like
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