I was pleased to learn this morning that Amazon.ca is now carrying building tools and supplies. Not so much because I’m a huge buyer of tools or an Amazon fan, but rather, because Canada needs this sort of competition. With Amazon continuing to expand its Canadian offerings, retailers that were only half serious about their online offerings will have to step up their game or get out of the way. Home Depot online has always been a bit of a hassle and their prices really aren’t that great. A quick comparison of their prices and service with what Amazon is offering bears that out.
For example, take the Milwaukee 18 volt Hammer Drill. Home Depot lists it at $419. Add HST and shipping, and this drill will set you back $483.97.
By contrast, Amazon is selling it at just $398 and includes free shipping. The final price tag at Amazon is just $456.75 – a tidy savings of $27.22 over Home Depot.
Home Depot has the advantage of its retail locations that give customers the opportunity to do some hands-on shopping and comparison. However I’m certain that for many items, the savings will be enough to compel many customers to do their browsing in Home Depot’s big box stores and place their order online after they’ve made up their mind to make sure they capture the savings that Amazon is passing along.
Reading the stories about the Kindle Fire this morning, I think Amazon might have a real shot at capturing some real market share in the tablet segment.
Not because of the hardware configuration – better options exist elsewhere. Not because of the software and features – again, both exist in better form elsewhere.
Distribution and Operations.
Apple has been successful with the iPad not because they invented the iPad, but because they have the right business model. Design + Technology + Manufacture + Distribution + Sales + Marketing. And they are great with each.
Amazon already very nearly does many of these things. They already have awesome Distribution + Sales and their Marketing is quickly coming up the curve. They are weak in the area of Design + Technology + Manufacture, but not nearly as bad as what we’ve seen from RIM, DELL and others. Amazon can definitely improve in these areas, and press reports lead me to believe that they are worried about the right things – learning the lessons they need to learn quickly to be competitive in the right time frame. Amazon’s track record with distribution and operations is nearly as outstanding as Apple’s.
Here’s a crazy thought. Amazon has a market cap double HP and nearly quadruple DELL. If Amazon can make a dent in the tablet market, I wonder what they could do in the mobile market with the assets of either of those two companies. Google buying Motorola might just well set the stage for a round of dizzying mega-consolidations.
Never underestimate the power of distribution.
I can’t believe it…
One of the most promising product releases in years and they blew it.
…it lacks a camera,
…doesn’t have a widescreen aspect ratio,
…have you seen that ugly thick bezel?
…doesn’t have a proper USB interface. I hate proprietary connectors.