BarnesandNoble.com by a day.
The price wars underscore the importance this season holds for online
retailers, especially booksellers. Apparently even a 1 percent difference in the discount on books
can make a difference this holiday season.
"It is very important," said Amazon CEO and founder Jeff Bezos. "A large
fraction of sales are done in the fourth quarter."
In fact, he said, many
online merchants are only profitable in the fourth quarter. "It's a very
Bezos said Amazon hasn't experienced that same kind of "seasonality"
because of its rapid growth. "Nobody knows what to expect. Last Christmas
may or may not have been a good indicator," he said.
Amazon is using the holidays and the promotions that come with them to
leverage what Bezos says is a 55 percent return rate for customers. Both
the discounts and the holiday gift center are designed to draw in new
customers, who are statistically likely to buy from Amazon again.
"We have a very high return rate for a company that has grown as fast as we
have. If we can get someone to try our site, the chances are good they'll
come back and use it again," Bezos said.
Amazon's new discounts include 30 percent off selected audio books and
20 percent off selected calendars. Amazon also is offering up to 89
percent off what it calls "special value books," beating
BarnesandNoble.com's 88 percent discount.
Both companies are vying for an estimated $156 million in fourth-quarter online sales. Many analysts believe this is an especially important time for electronic retailers because many consumers will be making their presence felt in cyberspace for the first time.
Customers buying online for the first time are experimenting with different brands this season, looking for the company with the best prices, the largest library of titles, and the safest transactions. The companies are in a heated war to one-up each other with added specials such as discounts, recommendation services, and gift wrapping.