Someday, in the afterlife, Napoleon Bonaparte, Douglas MacArthur and other military legends will gather around chief executive officer Jeff Bezos of Amazon.com (Nasdaq: AMZN) and congratulate Bezos on his battlefield tactics. For e-commerce has never known a more cunning general.
Actually, to call Amazon’s latest bait-and-switch move in offering and then canceling free shipping a brilliant offensive move would be an understatement. Amazon informed its customers of its free-shipping offer, waited a couple weeks and then let the world know that it was, of course, only a trial period all along.
Of course, during that “trial” period, main online book selling competitor Barnesandnoble.com (Nasdaq: BNBN) matched Amazon’s ante. And BN.com did what any aggressive competitor would do: It raised the stakes.
Trial and Error?
In BN.com’s press release — yes, Amazon even got BN.com to announce its intentions to offer free shipping to the world, making it that much harder to retreat or change course quietly — BN.com pointed out that it was not raising prices. The statement was a shot across the bow at Amazon, who customers say factored in shipping costs in re-stickeringmany items.
So what does Amazon do? It not only folded, but got up from the table, walked away and said it was only sitting in for a couple hands anyway. There, at the table, red-faced and swallowing hard, sits BN.com.
This is where the brilliance of the bait-and-switch is highlighted, where we learn just how cunning the battlefield maneuvers were.
BN.com is in a corner; it is going to have to shoot its way out. And no matter which direction it aims, there is going to be crossfire and, as the military now euphemistically calls it, collateral damage.
Escape Plan 1 for BN.com involves hunkering down in the corner and using the ammunition that Amazon provided. That is, keep the free shipping in place, hoping that the contrast with Amazon will lure enough new customers placing multiple book-and-music orders to make it worthwhile.
That’s fine. But the potential collateral damage here is to BN.com’s bottom line. It’s early in the third quarter yet, but those numbers will be closely watched later in the year. And given what we know about shipping costs eroding profits, this option could spell bad news with investors and analysts.
The other option is to try to beat a retreat along the same path that Amazon took. The only problem is that Amazon has mined the roadway with a public relations nightmare.
If they too leave the table, the people at BN.com will have to explain that they were only matching Amazon, an embarrassing admission. Plus, they have to tell their customers that they’re taking away something they sold as a bonus, a gift to them. They shall have to tread very lightly.
My guess is that BN.com will take a combination approach. Stick it out for a while, then announce at some logical point, say the end of the summer, that it’s going back to charging for shipping, maybe with some new wrinkle added in. A good solution? No, but it’s all that’s left.
Of course, it’s possible that Amazon truly did intend its shipping freebie to be a test. It wouldn’t be the first one. Remember the customized pricing debacle? That was called a test as Amazon beat a retreat.
I didn’t believe it then and I don’t now. Amazon is too forward thinking, too focused to be caught at a loss like that. Maybe some other e-tailer, but not Amazon.
No, this was planned, I’m sure of it. And so far, it has worked to perfection. The war is far from over, but this battle goes to Bezos.
Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.