Amazon is growing on-demand services after reporting a 20% sales increase in 2015.
The world's largest retailer will no longer sell the world's largest e-retailer's Kindle products.
Add Wal-Mart Stores Inc. to the growing list of bricks-and-mortar retailers that have decided to stop selling Amazon.com Inc.'s Kindle line of tablet computers and e-readers. The world's largest retailer joins the likes of Target Corp., which announced earlier this year it would cease carrying Amazon's line of e-readers and tablets.
"Wal-Mart Stores made a business decision to not carry current Amazon products beyond our purchase commitments and existing inventory," says a Wal-Mart spokeswoman. "Our customers trust us to provide a broad assortment of products at everyday low prices, and we approach every merchandising decision through this lens. We will continue to offer our customers a broad assortment of tablets, e-readers and accessories at a variety of great price points."
The move came just weeks after Amazon unveiled a new group of Kindle tablets—the Kindle Fire HD family of devices that range in size from a 7-inch display to an 8.9-inch display and in price from $199 to $499—and upgraded its standard-definition Kindle Fire with a faster processor, twice the memory and longer battery life.
The Kindle Fire devices are not just e-readers but full-fledged tablet computers. They come with the Amazon shopping app pre-installed and in a position of prominence. And they facilitate sales of merchandise through Amazon. In short, every Kindle Fire in the hands of a consumer gives Amazon an edge in online sales competition, says Nikki Baird, managing partner at Retail Systems Research LLC.
"The Kindle is absolutely a device designed to bind shoppers more closely to Amazon," Baird says. "It doesn't surprise me at all to see traditional retailers catching on. We may see more such decisions about the Kindle during this holiday season—either in the run-up or immediately after. But I think one thing we won't see is a drastically negative impact on Kindle sales."