Amazon in America is offering $5 off a purchase if the user orders via their mobile app. As of Saturday, if you go to Macy’s or Toys R Us and physically scan an item’s barcode with the Amazon App, Amazon will give you up to $5 off that item if you add it to your (mobile) cart and leave Macy’s empty handed.
This is about as aggressive as business gets: if you walk into a competing retailer, scan the very item they’ve spent money on to put in store, we’ll do you a better deal today. Does pricing get any more predatory? Amazon don’t want to be a major retail player online, they want to be the retail player, period. eBay and Google can play around with physical pop up shops, but not Amazon. They know where their expertise lie: online. And they aren’t shy about getting you there either.
It’s yet another stunning lesson from Bezos of using market-leader advantage to further leverage your position. The banks are claiming “Caveat emptor,” or buyers beware, as a retort to the mis-selling and exploitation critique. I can’t help but think Amazon will be saying, ‘sellers beware,’ in the coming years as they turn retailers’ own guns back on them having mined the data to within an inch of its life.
When staff, especially service staff, say that customers where okay, it’s often not the case. “But they didn’t stay, they didn’t buy, they didn’t engage,” you reply.
Disgruntled, dissatisfied, unhappy customers don’t scream and shout or spill blood. They leave. Simple as that. They might moan to their partner in the car or once the phone is put down, but they’ll very rarely feedback constructively to your team and offer suggestions (unless they’re from New York!).
I’m never happy to receive a complaint from a customer because we’ve obviously caused a problem, but I welcome the chance to rectify the situation. Personally, I’d vote my with feet rather than write you an email, so I’m chuffed that people can try and help us improve and win them back as a customer.
But given that we know the majority simply walk, what are we doing to spot those signals and what comes next?
Amazon has shown itself as the first true competitor to Apple in the tablet war. The launch of the Kindle Fire this week is an audacious move to out-price the iPad with a dumbed-down system costing just $199.
Tablets are a future cornerstone for the world’s data consumption. As ever, Jobs lifted the curtain on that future and then he charged us a fortune to let us walk behind it. Amazon’s Jeff Bezos has had the hindsight of not being the first mover – he’s seen others throw pebbles at the armour of Apple with their tablet efforts (HP’s TouchPad was surely the most ham-fisted go at it).
I agree with Jason Calacanis that price is the key here, as you need to flood the market to gain traction and lock out competitors. Of course the product needs to be sellable in the first instance. Free may convert latent demand but it doesn’t create demand. No price reduction is enough if the product is tat – you could stand on every street corner in the country selling Betamax recorders for 1p. If you’d raised a whole £1 after a year I’d be stunned.
Amazon also had the gumption to go big. To double down as the yanks would say. And it needs to be so audacious because the scale of winning in this tech war is simply stratospheric. It’s not just about a few million bucks on the hardware, that’s just the entry fee to the club. The real win is at the bar. Consumers are paying for data that the world thought would be free for all time until the App Store showed us otherwise.
And nowhere is content more available than Amazon. Books, music, movies and TV shows are there. And of course, physical products from the deepest marketplace imaginable. Regardless of whether Amazon want to outgun the iPad, they are undoubtedly set to sell a whole tonne of content.
This is a killer strategy that doesn’t work in a cash strapped start-up with very little runway money and time. It’s the epitome of a loss leader, but it comes with the double whammy of providing a huge content channel as well as seeing off hardware competitors. Advantage Amazon.
This is a great move and a business test case for millions of students in years to come. What can Microsoft come back with?
News Corp’s readership numbers are on the up since they introduced their paywall last July. Surely that’s all good news?
The Times and The Sunday Times has grown from 50,000 monthly digital subscribers in October to 79,000 at the end of February. They seem to have brushed under the carpet the fact that the growth rate is slowing. They also lost 90% of visits the moment the paywall was cemented but that was expected by all.
However, volume isn’t the same as value because revenues are less online per customer due to their aggressive pricing strategy and smaller variable costs (another 1,000 iPad subs cost virtually zero to deliver, greatly less than a 1,000 physical papers).
It’s a bit disappointing that these figures aren’t broken down across all platforms but the papers say digital is digital regardless of your hardware so we can’t glean who’s using on Kindle, iPhone etc.
But the most surprising and impressive number is that churn is just 1%. 99% of subscribers in month one, stayed and paid for month two. Wow, talk about sticky.
This is interesting stuff. Tablets are having their 15 minutes of fame and The Times et al will only help reinforce that. Horse versus car; email versus letter; telephone versus telegram; paper versus digital news. All have an obvious ending but the sting in the tail sees all these publishers frantically trying to work out how to monetise their digital content. The world is watching.
Read the Guardian for a (free) great take on the numbers. You’ve got a savvy business mind, what do you think is the correct model?
January challenge: take a look around T-mobile’s website and try finding the page that lets you cancel your mobile contract. Go on, take a minute. Good luck.
If you think call centre telephone systems are a way of companies sending you round in circles, this site was designed with the same penmanship. Not only is there is no cancellation page, button or form, there’s not even a mention of how to do it (e.g. by email, letter or telephone).
The ‘Contact Us’ page doesn’t show a list of departments with corresponding telephone numbers, rather it’s a loop of FAQs and forums. None of the FAQs mention cancelling. However, if you click to enter a specific FAQ (rather than just reading several on the page) there’s a feedback box to leave comments. Maybe we should try there?
Yes, yes, yes, this is a rant, but don’t we all understand now that customer service includes having the option to NOT sell. It’s the dentist offering preventative methods of cleaning. It’s the petrol company educating on how to drive more efficiently. It’s the social network that allows you to export all your contacts and data (to probably use at a rival). It’s the advertised cooling off period and no quibble returns policy that reassures buyers they’re not entering a hostile marriage.
An example of such customer service producing a winner is Zappos. It’s so good in fact, Amazon paid $1.2bn to buy the company.
I totally understand T-mobile don’t want the holes in their sales funnel to be bigger than the mouth of it but come on folks. Do they really think that after trawling their site and then spending over 30 minutes on the phone to their foreign call centre that I’ll be more enamoured with their brand?
They haven’t lost me as a customer this time around; they’ve lost my family and me for life. T-mobile: love their flashmob advertising, hate their stickiness.
Seth would say there’s a dilemma when wanting to grow your customer base of going deeper or wider with your product offering. Victor Churchill in Melbourne is a fabulously extravagant example of going deeper.
They’re in the meat business but they’re anything other than a simple a butcher’s shop. This store takes things to an extreme, adding plenty of marketing sizzle to help the business stand apart.
Merchandising – the act and skill of butchery is part of the merchandising in store with the team working at timber butcher’s blocks on stage behind floor-to-ceiling glass. It’s practical and visually arresting.
Hero product – the daily special is on a pedestal inside a glass dome with over a dozen security cameras trained on it.
Depth of range – they’ve specialty cuts of meat and carcasses. These are hanging from a custom-designed, revolving, metal chain rack.
Story telling – the number one thing the father and son owners want you to notice is the backdrop brick wall made of Himalayan rock salt. Apparently, it infuses the hanging meat with flavour and sterilises the air!
Specialist service – could you receive anything less from these guys?
The best consumer-facing businesses are authentic; they have stories and a personality. Have you got a better example of that than Victor Churchill?
TED is one of my favourite sites on the Internet. The talks are simply magnificent. Watch this one from John Gerzema (photo) of Brand Asset Consulting.
He hits us with as many salient blows as is possible in 20 minutes, but one that particularly stood out for me was of values. Our mindless consumerism is turning into mindful consumerism.
It’s not just about the added value of the goods anymore; it’s about the company’s (and the brand’s) values. Does what they stand for align with me and my values?
I guess the big question is, is he only referring to a bunch of elitist, Prius-driving Californians, or is this actually a movement?
I presumed this recession and the near-meltdown of the banking sector would have a lasting positive effect on our society’s mindset. Apart from the obvious pain of the cutbacks, I can’t say I’ve seen it to date. Perhaps John’s got clearer vision than me.
A product, service or brand that’s being raved about is all well and good until you try it out for the first time. With mountains of people talking so wildly about something, you’ve naturally put it in the remarkable box. But what happens when it’s not remarkable; when it’s only OK; when it doesn’t blow your mind?
Apple has this hype problem. Mac lovers sermonise so wildly about using them instead of PCs anyone taking one out of the box for the first time almost expects a Mac to do the work for them – or at least perform it by telepathy. I met a Mac newbie this week and they were seriously underwhelmed by their box-fresh MacBook Pro, “It’s not as special as everyone bangs on about, is it?”
Buy an iPad this weekend and see if it lives up to your undoubtedly weighty expectation. (What do you mean it doesn’t change nappies?)
Word of mouth is the pinnacle of marketing – until, that is, when it sets the bar too high. Then it leads to disappointment and a distrust of the next ‘big thing’ and marketing in general.
Hadfield Road in Cardiff is a haven for the car buyer. It’s just a mile long but straddling nearly every inch of it you’ll find over 20 car dealerships. This proximity to your competitors certainly isn’t unique – pub chains all gather together in city centres. So does the sex industry in London’s Soho, and jewellry in New York’s diamond district around 47th Street. All apply the same phenomenon of proximity.
A similar thing is happening with e-book readers. The iPad launched earlier this year and threatened to decimate existing readers like Sony’s Pocket Reader, Barnes & Noble’s Nook, and, most notably, Amazon’s Kindle. But it appears to have done the opposite as sales of Kindle have trebled this year compared to the first half of 2009.
Amazon is now selling more E-books than they do hardbacks! Just think about that [undisclosed] number for a minute. In an interview with USA Today, Amazon’s CEO Jeff Bezos said, “I predict we will surpass paperback sales sometime in the next nine to twelve months. Sometime after that, we’ll surpass the combination of paperback and hardcover. It stuns me.”
They’re releasing a new Kindle at the end of August that’s smaller, lighter, better and half the cost. I don’t know if it can launch an artillery strike but it’s going to further enliven their product life cycle.
All this should remind us that the next time competitors threaten to join our market or emulate our products, we should wonder if we cant use proximity to grow the whole together, rather than needing to turn into cannibals. It’s another argument for the thoroughly modern co-opertition, not necessarily competition.
Steve Jobs said, “This is really hot,” when he unveiled the iPhone 4 at his Worldwide Developers Conference last month. He wasn’t joking.
It took Apple 72 days to sell a million of their original iPhone when it launched in 2007. Last year, the iPhone 3GS sold a million units in three days, a benchmark it took the iPad took 28 days to achieve. But all these look positively lethargic compared to the iPhone 4 and Apple’s most successful launch in its history: they’ve sold over 1.7 million phones in just three days since its release on June 24.
Estimates for Q3 claim sales of 10.2 million units, rising to 12.2 million for Q4.
The really interesting thing is that 77% of those early sales were to existing iPhone owners. Over three-quarters of sales are to folks who are upgrading! That’s the very definition of a want, not a need.
As Seth Godin might say, seek out committed customers and harvest a tribe by finding/making products for them. Inspire and reship.
Steve Jobs is the ultimate tribe leader. Love him or loath him, make no mistake you’re watching the Pied Piper of tech, folks.
Old news: technology and consumerism are intertwined. Simple example, the cheque book and then the debit card were tech replacements for cash.
Today’s smart phones and the rush of tablets we’re about to see really are changing the landscape now, not just tomorrow. Watch Scoble interview the head of eBay mobile, Steve Yankovich to see how serious one of the globe’s largest retailers is about mobile.
They’re serious about augmented reality; serious about decoupling from the desktop PC; and serious about going truely global. It’s 25 minutes long but hang in there, the second half is more ‘business’ than the first.
Smith-Harmon has released a study of American retail email trends for last year. Unsurprisingly, 2009 saw record volumes distributed.
It states that the 100 largest retailers sent an average of 132 promotional emails to each of their subscribers. That’s an average of 11 emails a month and 2.5 per week, per subscriber (peaking at 15.4 in December). Overall, top online retailers sent 12% more promotional emails in 2009 than they did the year before—and 39% more than during 2007.
You’ve got to wonder if we’re going to kill the golden goose here. The overwhelming number of emails threatens to neuter your subscribers’ inbox. I’d argue consumers are becoming numb to special offers and super savings.
This is about perfecting frequency, not necessarily content. It’s a nexus that lies between maximum engagement (revenue in most cases) and maximum disengagement (unsubscribers). Think about consumers’ distain for physical junk mail promotional mail shots. It’s not too much of a leap to imagine that feeling about your inbox - even if you did volunteer your address.
If a salesman turns up for a meeting in new Porsche 911, he’d better be flogging footy players, not underwear or umbrellas to BHS.
Most salespeople understand the principles of the game: set a tone that’s both professional and in line with your brand and product offering.
That’s why I’m amazed at business people who rock up to meetings in £40k cars and then produce cheap, battered, old laptops from leather briefcases.
If you’re selling top-end tyres, tiaras, towels, till systems or toothpicks, surely it’s unwise to do so with dated equipment?
Salesmen want you to procure something with an intangible benefit associated with brand equity (think perfume for the classic example where a tiny fraction of the cost goes to production). My problem is they often do so while displaying a lack of desire themselves. Yes it’s shallow. And yes, playing the game is a branding exercise.
It’s the equivalent of a builder turning up at your house in a beat up old transit, while he tells you how much quality and added value he brings with his £30k conservatories.
Cheap is perfectly understandable – frugal is fine – but when you’re selling luxury, quality or style, know that you should display some yourself as well (let’s call it ‘acting out’).
Easy win: an £800 MacBook comes over way better than a four year-old Dell some folks would schlep around. (And, no, don’t kid yourself, it’s not JUST about the label.)
Following their best Christmas to date, the very on-form John Lewis was recently voted Britain’s best shop by Verdict and its 6,000 shoppers. Let’s be honest, what’s not to like? The stores are upmarket but unpretentious. They’ve a quality product offering and peerless customer service.
John Lewis is different from normal retailers. They’re known as a bell-wether for high street trading, not because they mimic other retailers but because they report sales figures weekly as opposed to the normal quarterly results from the likes of Tesco and M&S. They are incredibly transparent; a throwback to being a ‘partnership’, owned by its 69,000 employees partners. This transparency and an old fashioned willingness to ‘serve’ clearly run through this business.
Although, that said, the latest ForeSee Christmas E-Retail Satisfaction Index tells a slightly different story of their online offering. In this brief but excellent study of the top 40 retailers (according to traffic), Amazon trump John Lewis as clear overall winners.
JL did come out on top when looking at the multichannel category, ahead of Boots and HMV. Most surprisingly of the pure plays (Internet only retailers) ASOS rank seventh, behind QVC and M&M Direct.
Regardless, both polls show JL is getting it very right where its customers are concerned. If I were Andrea O’Donnell, JL’s Commercial Director, I’d be very pleased but a little puzzled as to how a cold pure play like Amazon could best me when customers can’t even speak to an individual, let alone be impressed by one. Email updates obviously go a long way.
It’s pretty much a given that SMEs are more likely to be passionate about what they do than lumbering corporates answering to the City. Let’s be honest, most SMEs don’t tend to start a gardening business if they can’t stand the sight of grass. Unfortunately, that passion can overrun into myopia where those in business [...]
Charging for postage is the perennial debate of e-commerce. I think Amazon’s decision this week to extend its free postage charge trialled before Christmas might favour a good deal more consumers than Amazon serves. I can see other retailers having to follow suit as they look to win a friend and gain a client from [...]
I used to work for someone who claimed proudly that he knew almost nothing about our product and he certainly wouldn’t use our products. He would even speak derogatorily of those who did. With pride he’d say, “I’m a businessman, I don’t need to know about a product to sell it.” Of course there’s quite [...]
Yet another naval-gazing award ceremony took place last week where BSkyB were claimed Britain’s Most Admired Company from Management Today. Clearly, MT’s judges didn’t base the trophy on Sky’s email campaigns. If they had, MT wouldn’t discover personal, relevant and timed messages – their emails are more like blanket mini-billboards. Every week or so Sky [...]
I was asked this week, ‘What does a manager really do?’ It was a fairly innocuous, rhetorical, jovial question from a well-paid, senior person. The graduate switch flicked and I immediately thought, ‘seeing that the company’s goals are met’. After all, it’s the leader’s job to define and create those goals and aims, and it’s [...]
On the right – Prevent search engines from indexing news content and have readers pay through a variety of subscriptions to recoup lost earnings from physical news sales. People have no right to free journalism and aggregator sites (especially Google News) are to news, what Pirate Bay is to music. On the left – If [...]
Piano maker Kemble & Co is closing after nearly 100 years producing over 350,000 pianos. They were the UK’s last large scale piano manufacturer. It’s a reflection of yesteryear when a piano was a central asset in the home. Mum and dad would teach their kids the odd tune in the hope of lighting their [...]
Most people think the saying ‘first impressions count’ is all about clothes or hair. They’re wrong (to a degree). It’s more about attitude than anything else. How you carry yourself when you enter the room; how you interact in the opening few seconds; your handshake; your eye contact; your confidence. It’s the X Factor test. [...]
All businesses want to control their own destiny. Surely, it’s natural. The old-fashioned classic is to cut out the middleman and access the wallet yourself. After all, why go to the trouble of producing a wonderful product, only to pray fickle retailers buy into it and run the gauntlet of the supply chain? It’s sorely [...]
A while ago, I had the pleasure of listening to Google’s Robert Swerling talk saliently about site design. The brief version of his presentation: Velocity – give it fast and let them get on with other things Visibility – don’t surprise consumers Value – provide real value Variation – never come out of beta (love [...]
By day, Nick Fluck is a director of Tredz, a bicycle retailer with a strong web presence. By night, Nick can be found moonlighting on Digitally Minded, waxing un-lyrically about marketing, business, new media, technology and innovation. This semi-personal, part-professional blog is a collection of Nick’s weekly(ish) ramblings as the wannabe business partner/love child of Seth Godin Want to know more?
Amazon in America is offering $5 off a purchase if the user orders via their mobile app. As of Saturday, if you go to Macy’s or Toys R Us and physically scan an item’s barcode with the Amazon App, Amazon will give you up to $5 off that item if you add it to your (mobile) cart and leave Macy’s empty handed.
