Book battles ramp up between Amazon and Walmart

Amazon may be the undisputed front-runner in e-book market share, but Walmart recently announced its expansion into the arena with a new partnership with Rakuten Kobo.

Walmart eBooks features access to Kobo’s library of more than six million titles that are now available in a monthly subscription program priced at $9.99 a month, which includes one audiobook per 30-day period. Customers who don’t want a subscription can make a la carte purchases from the new expanded offering. Walmart said its e-book selection is accessible through co-branded iOS and Android apps as well as on Kobo e-Readers.

“Walmart eBooks will complement our vast physical book assortment and offer customers a comprehensive digital book solution, introducing an entirely new category that hasn’t been previously available at Walmart,” said Mario Pacini, general manager of entertainment at Walmart e-Commerce U.S.

The move to expand Walmart’s e-book presence comes as the category is experiencing a decline in sales. NPD reports e-book unit sales fell 10% last year. NPD reports e-book unit sales hit 162 million last year, down from 180 million units in 2016. The top selling e-book in 2017 was “The Handmaid’s Tale.” Adult fiction remained the most popular e-book category representing 44% of sales in the digital format, but e-book sales in the segment dropped 14% from 2016, to 108 million units, according to NPD. In the non-fiction genre, e-books for adults accounted for just 12% of segment sales in 2017, up 3% from the prior year.

NPD reports the steepest decline in e-book sales was in the children’s category which fell 22% from 2016. In the young adult category e-book sales were down 8% year-over-year.

Scribd CEO Trip Adler recently told Forbes his e-book subscription company welcomes the competition from Walmart. But Walmart’s biggest obstacle is Amazon’s decades head-start in this category. Adler said Scribd already has 750,000 paying subscribers on top of Amazon’s 100 million Prime members and he’s intrigued to see how Walmart differentiates itself from its competitors.

Walmart will always try and win on price and value and that looks like the strategy with this launch. Walmart’s subscription is $10.99, undercutting the $14.99 Amazon charges for Audible books, but it’s more than the $8.99 charged by Scribd.

“We’re really excited about this new category, and we know our customers will be too. To celebrate the launch, we’re offering first-time customers who sign up online $10 off their first a la carte e-book or audiobook. In addition, customers who sign up for the audiobook subscription will receive a 30-day free trial,” Pacini stated in the release.

Annibal Sodero, assistant professor of supply chain at the University of Arkansas, has praised Walmart for partnering where it can to grow its e-commerce business against the likes of Amazon and Alibaba. He said partnerships like Rakuten are key for Walmart to fast-forward to where Amazon has been for some time.

NEXT GENERATION
While Walmart is vowing to grow e-book sales with a lower price and expanded category of titles, Amazon announced another play aimed directly at its 100 million U.S. Prime members and the next generation.

On Tuesday, (Aug. 28) Amazon announced Prime Book Box subscriptions that deliver curated printed children’s book every 1, 2, or 3 months. Each box contains hardcover children’s books hand-picked by editors to encourage reading in children ages 0-12. Amazon said the subscription costs $22.99 per box, and represents a 35% discount off of List Price.

Amazon said it began testing this service with select customers in May and decided to roll it out to all Prime members because of the positive feedback received from the pilot.

Amazon is also targeting Generation Z with this initiative hoping to foster a relationship as early as possible saying the Prime Book Box is ideal for readers and future book lovers from baby to 12 years old. Prime customers tell Amazon about the reader’s age, reading level, birthday, gender and name to help the curator choose books for each child. The subscription also allows members to preview and customize the books from a list of curated options if they don’t want to be surprised by what’s in the box.

Amazon is likely tapping into a growing market and gleaning valuable intel on it’s next generation of Prime members. While Walmart is chasing a declining market trend, physical book sales did manage to increase last year, albeit just 1.9%. Kristine McLean, books industry analyst at NPD, said children’s books are the last refuge of print publishers. She said children’s book sales rose 3% in 2017, and early childhood book sales increased 11% year-over-year, young adult graphic novel sales soared 20% in 2017.

Sodero has said it’s important to remember Amazon is a technology company first, not a retailer. The endeavor to entice Prime members to sign up for another subscription is again what Amazon does to tether itself to the 100 million paying U.S. Prime members. Gaining information on the children through the Prime Book Box subscription also gives the retailer future leverage to market to the households through their children.