The United States books market has grown by 1.6% in 2009 to reach a value of $26.1 billion (Data Monitor.com). In this large market sector the focus is more than ever on finding the best prices and firms like Amazon that are known for their high value at low prices strategy are well positioned to benefit from such market need. The Online Bookstore industry have become a fierce business which involves discounts, varied selections and fast delivery in which all companies are challenging each other. The major competitors are Amazon and Barnes and Noble.
Amazon was the first one to get into the whole idea of online retail, and thus being the first mover they had the luxury to set the standards which became the norms for the industry. The only feature lacking for amazon was its presence in the form of real brick and mortar stores. This network of “actual” retail spaces which apparently made it easier for the consumer to return or exchange the products they were not satisfied with. This handicap of Amazon was the basis for the emergence of book retail giants Barnes and Noble to enter into the online shopping industry.
The buyer demographic for the online retail industry is people who have with special interests, highly educated, professionals, students and an access to the Internet and computers. The segment of online shoppers has increased dramatically in recent years due to the convenience of shopping in the comforts of the home and the accessibility of the Internet. These developments have made it easier for consumers to log on and buy on the Internet. Consumers also tend to compare prices among the retail leaders such that buyers are able to buy products with very big discounts compared to ones bought in “actual” retail outlets. The bargaining power of the consumer is based on the competitive strategies of each active firm in the industry. Thus, consumers can challenge one firm for charging more than the other one such that the firm will beat the price of the competing firm