The California example is exactly what has to happen to keep this behemoth in check. I’m still amazed people will drive miles out of their way and wait in lines for an item that is .94 at Wal-Mart but .99 elsewhere. My time is a hell of a lot more valuable than that. The low wages and economic strain Wal-Mart puts on a local economy is enormous; music may not be affected right now but other products are such as gasoline are affected. Margins are already tight in the petroleum industry and as Wal-Mart/Sams continue to offer this as a loss leader, the local competition base will steadily erode until the consumer has no other viable options. I wonder what will happen then…bend over, because Wal-Mart won’t be rolling any prices back, only up. Amazon/Target cater to a different clientele, so you are correct; they will be around to compete. Wal-Mart also is heavily involved in censorship which is another factor. Wal-Mart has asserted itself as the dominant supplier to the (for the most part) uneducated and conservative groups. Many of these are short-term thinkers who see only the $.05 savings they gain immediately rather than the dangerous consequences down the road. The typical Wal-Mart customer is not the target demographic for Amazon or Target for example. The relationships in both business models are quite interesting in that they are very segmented in who they target. Wal-Mart is trying to crack the stereotype by venturing into the online music world and naturally, undercutting competitors prices. Whether this succeeds or not remains to be seen. I’m also not familiar with the file characteristics of Wal-Mart’s music versus that of I-Tunes, for example. Perhaps they are different but I don’t know.
[edited by slacker6 on 11.02.2004 06:16]