Amazon to Sell Toys and Electronics
Amazon.com Inc., the world’s largest Internet retailer, continues its march toward becoming a mass merchandiser today when it begins selling toys, games and consumer electronics.
With previous expansions into movie videos and music, Amazon instantly became the leader in online sales. Many analysts believe it will have similar success rolling over online retailers of consumer electronics and toys.
“Amazon has moved well beyond competing against Barnesandnoble.com and EBay,” said David Cooperstein, an analyst with Forrester Research Inc. “They’re taking on Wal-Mart, and this is a move to solidify that strategy. It’s a must-do in order to be a mass merchant online.”
But consumer electronics and toys are unlike the books, music and video areas already dominated by Amazon.
Because there are no giant distributors of toys and consumer electronics, Amazon will not be able to match the comprehensive selection it has in other categories.
Consumer electronics are bulky and complicated, requiring Amazon to ramp up its customer service forces, because people are more likely to struggle with hooking up a camcorder to a videocassette recorder than with Tom Clancy’s latest bestseller.
“It is a new ballgame, and it is a harder customer service challenge,” said Christopher Payne, general manager of Amazon’s electronics store. “It takes more information and guidance to make a buying decision, because they’re more complicated items and they’re at higher price points.”
Amazon declined to say how much it will boost its customer service staff to handle the new categories.
Consumer electronics buyers also are more likely to want to try the product. Circuit City recently announced that it will open an online store where people can buy items on the Web but return them in person.
Still, selling consumer electronics online, a field with a slew of lesser-known competitors, is a good match for Amazon.
“Generally, it fits perfectly into the demographic of online users overall, who tend to be wealthier, better educated and early adopters of gadgets,” said Jae Kim, an analyst with Carmel-based Paul Kagan Associates.
Amazon shares fell $8.13 to $117.38 on Nasdaq.
