With the new Kindles, Amazon has been able to define the hybrid retail environment. In fact, this reinvention of the retail experience will help the company not only keep fighting with newer competitors such as Apple but also take on today’s leviathans like Wal-Mart.
If you look at the price points of these devices, Amazon is willing to take deep losses in order to build market share and get people using its devices — fast. It needs to do so in order to ensure one thing and only one thing: that people keep buying from it what they need. Amazon has traditionally made money by selling physical goods: books, music and movies.
Given that we are increasingly shifting away from buying physical media and are instead opting for digital goods, Amazon is smart in its introducing the new Kindle tablet. The presence of these outlets allows us to buy more things more often and more easily. And that includes everyday stuff like toilet paper, soap, shoes and toys. Given that we have a new generation of children growing up using tablets, the very idea of ‘toys’ for them might be quite different from what you and I experienced as tiny tots.
When I think of the new Kindle Fire (and whatever comes next), I see a strategic move that mirrors the introduction of Amazon Prime, the unlimited shipping plan that made it easy for us to buy more from the Seattle-based e-commerce giant. “
(from my September 2011 post, Apple is from Venus, Amazon is from Mars)