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Interesting piece in the Seattle Post-Intelligencer about how Wal-Mart’s Internet sales activity seems to be gaining on’s, and how this battle could draw into sharper focus the advantages of being a multi-channel retailer as opposed to being a pure-play Internet marketer.

"The big advantage of multichannel retailers is that they give consumers the option to shop in different ways," Sucharita Mulpuru, a retail analyst with Forrester Research, tells the newspaper. "Shoppers can research online, and pick up in store if they want immediate satisfaction, or call someone in a call center to get more specific product information."

In contrast, "it is nearly impossible to find a 1-800 number on Amazon's Web site," she said. "They are very focused on self service. ... That's why they have customer reviews -- it's their substitute for someone holding your hand and helping you through the sales cycle."

In addition, people who order from Wal-Mart can return products to the store, as opposed to having to ship them back to Amazon. Wal-Mart also reportedly is piloting an in-store pickup program, which will allow people to order online and then pick up products at a brick-and-mortar location.

Still, Amazon is perceived as having other strengths – such as a better customer loyalty focus, superior fulfillment logistics, and extensive free shipping offers (which Wal-Mart derides as a “gimmick”).
KC's View:
We suspect that one of the reasons that is growing faster at this point than Amazon may be that it is extending its appeal to a greater number of people in the mainstream. And that’s a good thing for e-commerce – the more mainstream it becomes, the healthier the category.

Certainly Amazon, like every other retailer in the world, needs to be concerned about Wal-Mart. It would be myopic to ignore the threat. But we suspect that founder CEO Jeff Bezos has more than a few new tricks up his sleeve to keep Amazon’s competitive advantage.

One other thing. As a consumer, when we shop we feel like a shopper. When we go on Amazon, we feel like a member of a vital and thriving community…which to us, at least, makes it a more satisfying shopping experience. For example, has launched a new service called “Amazon Connect” that allows authors to post messages to readers on the retailer’s home page – the kind of community-building exercise that has not attempted to this point.

And another note. Free shipping is hardly a gimmick. And while Wal-Mart may deride it as that for the moment, watch for that to change down the road.