Will Amazon Make Complete Transition to Third Party Sales?

Amazon has begun to shift from directly selling products to customers due to its success with third party sales. The practice of fulfilling third party sales will continue to grow, and could become the entirety of Amazon’s business plan eventually. Third party sales now account for 39 percent of Amazon’s sales, and massive distribution centers show Amazon’s continued transition. Continue reading Will Amazon Make Complete Transition to Third Party Sales?

Index: Startup Aims to Personalize Your Shopping Experience

Marc Freed-Finnegan and Jonathan Wall left the Google Wallet team in 2012 to launch their own startup. Many thought the two would develop a rival mobile wallet, but the duo’s new venture is heading in a different direction. Called Index, the startup “is essentially offering to turn every store into the same sleek, technology-driven experience of an Apple store, where you get that one-two punch of efficient, yet tailored service,” explains Wired. Continue reading Index: Startup Aims to Personalize Your Shopping Experience

Are Amazon and Google on a Collision Course for 2013?

Amazon CEO Jeff Bezos got a “wake-up” call a decade ago, when he got word of a project at Google to scan and digitize product catalogs. “He saw it as a warning that the Web search engine could encroach upon his online retail empire, according to a former Amazon executive,” reports Reuters. That was just the beginning of a rivalry that will continue heating up in 2013. The two will compete even more fiercely in the online advertising, retail, mobile gadgets and cloud computing realms. Continue reading Are Amazon and Google on a Collision Course for 2013?

Marketing: Retailers Try Twitter for Promoting Holiday Shopping Deals

Retailers are taking a more aggressive approach on Twitter this holiday season, using the social network to heavily promote products and deals. An example of this strategy involves Best Buy, which is using Twitter differently this year than it did in the past. “Last year, the electronics retailer bought ads on Twitter to promote sales the week of Thanksgiving, and not much else,” writes the Wall Street Journal. Continue reading Marketing: Retailers Try Twitter for Promoting Holiday Shopping Deals

Consumer Study Points to iPhones and iPads for Holiday Wishlists

  • According to data from research firm Parks Associates, consumers have Apple devices on their holiday wishlists this year.
  • Parks reports that 53 percent of prospective smartphone purchasers plan to buy an iPhone for the holidays, compared with 33 percent who indicated the same in the third quarter and 24 percent one year ago.
  • “And when it comes to tablets, most of those surveyed said they’d prefer an iPad,” reports AllThingsD. “Following the iPad at 44 percent was Kindle Fire, with 24 percent of consumers expressing interest in Amazon’s touchscreen tablet.”
  • “Twenty-one percent of those surveyed said they’d go with the Microsoft Surface tablet — down from the 45 percent who just a few months ago said they wanted the Surface — and the Google Nexus tablet came in last at 12 percent.”
  • Additionally, Parks notes, “When presented with the iPad mini as a tablet alternative, many of those planning on purchasing other tablet brands opt for the iPad mini.” And among those planning on buying an iPad, 40 percent said they would opt for an iPad mini.
  • The smartphone portion of the Parks survey focused on brands only, not individual models, so it is not clear which version (and price point) of iPhone is enticing consumers.

New Generation of Tablets for Kids Prepare for Battle this Holiday Season

  • This upcoming holiday season will see more tablets for the “older-than-toddlers but not-quite-teenagers” demographic. The market was formally dominated by learning-based tablets aimed at toddlers.
  • Tablets like Lexibook, Kurio and Meep “are educational and entertainment devices, and they are targeting the 6-to-12-year-old demographic,” writes Forbes.
  • But will these youngsters want these tablets, or would they rather just have the real thing, like an iPad?
  • According to a Forrester Research survey of 4,750 U.S. adults, “29 percent of tablet users say they let their children older than six use their tablet.”
  • While Apple indisputably dominates the tablet market, the Toys”R”Us strategy is based on differentiating itself by being kid-specific. Toys”R”Us will sell a number of $149 Android tablets featuring seven-inch screens and wireless access — including its own Tabeo (pictured here).
  • “In the Forrester survey, 26 percent of parents said they’re concerned about their children accessing inappropriate content on their tablet,” explains the article. “On all of the kids’ tablets, however, parents can control the content children can access with a one-time setup and set limits on how long they can use it, something they can’t do on the iPad or Kindle.”
  • The kids’ tablets are also less delicate, built to withstand damage. But as Forbes points out, that won’t mean much unless the kids want them.

Google Taps a New Market with Indoor Mapping at Malls and Airports

  • Google is adding indoors maps for select malls, airports and transit stations with the release of Google Maps 6.0 for Android.
  • “Detailed floor plans automatically appear when you’re viewing the map and zoomed in on a building where indoor map data is available,” explains The Official Google Blog. “The familiar ‘blue dot’ icon indicates your location within several meters, and when you move up or down a level in a building with multiple floors, the interface will automatically update to display which floor you’re on.”
  • Initial partnerships include locations in the U.S. and Japan: Mall of America, IKEA, Home Depot, select Macy’s and Bloomingdale’s, Hartsfield-Jackson Atlanta International Airport, Chicago O’Hare, San Francisco International Airport, and others.
  • “Apart from the obvious advantage to users who would now find it easy to navigate through buildings, we also expect the indoor map feature to provide a significant advertising opportunity,” reports Forbes. “Retailer locations in malls and airports would now show up on the map, and they should be interested in highlighting any new deals and promotions on the map users as soon as users enter the building.”
  • Last month, Google announced that more than 200 million Android devices have been activated worldwide, more than double what was reported by the company in May.

Retail Strategy: Exec Discusses What He Learned Building the Apple Stores

  • Ron Johnson, the new CEO of J.C. Penny and the former SVP of retail for Apple, talks about what he learned building the Apple Stores, the leading U.S. retailer with sales of $5,626 per square foot, nearly double the sales of Tiffany & Co, its closest competitor.
  • People come to the Apple Store for the experience, the most important part of which is the staff. The philosophy is NOT focused on selling, but on building relationships and making the customer’s life better, a model that worked for Apple.
  • “The staff is exceptionally well trained, and they’re not on commission, so it makes no difference to them if they sell you an expensive new computer or help you make your old one run better so you’re happy with it,” explains Johnson. “Their job is to figure out what you need and help you get it, even if it’s a product Apple doesn’t carry. Compare that with other retailers where the emphasis is on cross-selling and upselling and, basically, encouraging customers to buy more, even if they don’t want or need it.”
  • The Apple model is not easy, and has required persistence. The Genius Bar, for example, was not popular in the beginning, but Apple stuck with it as the best way to help customers. “Three years after the Genius Bar launched, it was so popular we had to set up a reservation system,” writes Johnson.

Digital Music Study: Is Spotify Detrimental to Music Purchasing?

  • A recent survey of dedicated music demographics indicates access to music from services like Spotify, YouTube, Grooveshark and others significantly decreases the interest in purchasing across all groups except the least dedicated.
  • “Services like Spotify increase access, but also decrease spending in many situations.  Which means less money from higher-returning formats like iTunes downloads, CDs, and LPs,” according to Digital Music News. “But free access also includes a range of other services, including YouTube, Grooveshark, and various freebie competitors.  And all of these are sapping the juice out of higher-end impulse buying, once a music industry lifeblood.”
  • The recently released findings from NPD Group and NARM have already had an impact. “Following a study that claims that streaming music is damaging to record sales, a distributor representing more than 200 labels has withdrawn its entire catalogue from Spotify, Napster, Simfy and Rdio,” reports Huffington Post.
  • “As a distributor we have to do what is best for our labels,” STHoldings explained in a statement. “The majority of which do not want their music on such services because of the poor revenues and the detrimental affect on sales. Add to that the feeling that their music loses its specialness by its exploitation as a low value/free commodity.”
  • In a related All Things D story, Spotify announced it has new things on the horizon, but has yet to provide details. “In New York on November 30th, we are holding our first press conference to unveil the latest major development from Spotify — and a new direction for the company. The press event will be hosted by CEO and Founder Daniel Ek, along with special guests,” wrote the company’s PR unit.
  • All Things D speculates Spotify may be releasing a U.S. service to buy songs (already available in Europe) or an iPad app, but “it is courting the risk of overpromising” if these are the only developments to be announced.

Shopping Trend: Retailers Find that Consumers Prefer Apps to Websites

  • New iPad apps are rolling out this holiday season to entice the eight percent of online shoppers that own tablets.
  • That percentage may seem small, but Forrester Research found that 60 percent of tablet owners use their devices to shop and many prefer them to smartphones or computers for shopping. For clothing company Anthropologie, iPad shopping accounted for six percent of sales this year and is expected to rise to 20 percent with the introduction of their new app.
  • These new apps aim to provide a more interactive experience and capture some of the in-store essence by revamping their electronic catalogs and adding new features to their shopping pages.
  • Revel Touch has built apps for multiple companies including functions like a “virtual dressing room,” that allows users to create outfits and the ability to share choices on social networks. Apps allow tablet shoppers to zoom in, see videos and find the sizes they want with ease.
  • “You can bring the objects to life on an iPad and you can’t do that on paper — and you don’t have to chop down a tree,” the CEO of Catalog Spree told The New York Times. The company also reported that, on weekends, its users spend almost eight times as long on the retailers’ app as they do on the retailers’ Web sites.

Risk-Taker: Amazon Betting Big on Prime Customer Loyalty Program

  • Amazon is willing to lose hundreds of millions of dollars annually on the Amazon Prime customer-loyalty program because of the increased consumer spending it creates.
  • “The cost of Prime underscores the willingness of Amazon Chief Executive Jeff Bezos to shell out money as he continues the company’s transition from an online retailer of paper books, to an Internet megamall that sells an array of products from various companies, to a seller of digital goods and even its own devices, such as the Kindle Fire tablet computer,” reports The Wall Street Journal.
  • “[Fiona Dias, VP of rival service Shoprunner] estimated that after joining Prime, members tripled the amount of money they spent on Amazon to $1,500 a year,” the article indicates. “She estimated up to 40 percent of Amazon’s domestic revenue, which totaled $18.7 billion in 2010, comes from Prime members.”
  • Some investors look unfavorably on Amazon’s subsidizing (the company loses $90 a year on each Prime subscriber and sells each Kindle model at a loss of $10+), but analysts say the costs are offset by Amazon’s profitable website.
  • Prime will be offered free for 30 days on the new Kindle Fire.

New Apple Store App Enables Online Orders and Self Check-Out

  • Apple’s new retail store app for iOS is expected to launch today, and will include two major features: 1) Online ordering with retail store pick-up, and 2) Self check-out at retail locations.
  • The new services have already started at a number of Apple locations in California and New York City.
  • A customer will be able to order an in-stock product online and pick it up approximately 12 minutes later — skipping lines and registers, then simply picking up and signing for the product.
  • If customers order an item that is not in-stock, they’ll be a given a pick-up date right after the online purchase is completed. All products sent to an Apple store will include free shipping.
  • With self check-out, customers are encouraged to launch the Apple Store app on an iOS device to purchase in-store items. “You scan the product with the camera on your device in the app, click purchase, and it will charge whatever credit card is associated to your Apple ID,” reports BGR.
  • The company expects the new program will generate a 30 percent increase in sales.

Shall I Buy Enables Social Shopping: Foodspotting for Everything Else

  • Shall I Buy is a free iPhone app with the goal of combining instant social feedback for shoppers to make better purchasing decisions and possibly combat buyer’s remorse.
  • A shopper can share a video, picture, price and location to engage potential followers and incite comments, and allows sharing of links through Facebook and Twitter.
  • “The app is done simply, taking heavy styling cues from Instagram, but in doing so it’s effective and easy to use,” reports TheNextWeb.
  • The post cites two potential downsides: 1) By default, users receive a great number of push notifications, and 2) It would be helpful to have “a way to configure notifications inside of the app itself,” rather than going to the website.
  • Robert Scoble equates it to “Foodspotting for everything else.”

YouTube Merch Store to Put a New Spin on Music Discovery

  • Google has announced that through the new Merch Store feature, YouTube partners “will be able to sell artist merchandise, digital downloads, concert tickets and other experiences to fans and visitors.”
  • The Merch Store evolved from multiple partnerships: Marketing enabler Topspin will handle merchandise sales, while concert organizer SongKick will handle ticket sales. Amazon and iTunes will power transactions for music download transactions.
  • “The ability to add merchandise sales, ticket sales, digital downloads and more to an artist’s YouTube site definitely gives these sites more of an engaging presence for artists with their fans,” reports TechCrunch. “These destinations will now become more than just a way to discover music videos, but also a way to transact business and actually see the artist and buy their works.”
  • The feature should arrive in the coming weeks. YouTube will take a percentage of sales to cover costs.

CinemaNow Introduces Availability of HD Movies from Fox and Warner Bros.

  • CinemaNow — the online video service launched by electronics chain Best Buy in 2010 — has announced it will offer 1080p HD movies from Fox and Warner Bros. on personal computers. “Until now, only standard-definition movies were available from CinemaNow on the PC,” writes Carolyn Giardina in The Hollywood Reporter.
  • Thomas Gewecke, president of Warner Bros. Digital Distribution, indicates that CinemaNow is using Intel technology to make secure HD content available. “Intel Insider is a hardware-based security technology in second-generation Intel Core processors,” reports THR, “which is the fastest-shipping Intel product with more than 75 million units shipped to date.”
  • “The partnership with Intel and Best Buy’s CinemaNow to bring HD digital downloads of our movies to the PC will expand our reach to millions of devices in the U.S. and potentially more around the world,” adds Mike Dunn, worldwide president at 20th Century Fox Home Entertainment.
  • CinemaNow currently offers approximately 15,000 movies and TV shows.

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