Posts tagged brick and mortar
Facebook goes to Target with Facebook Credits gift cards
Sep 1st
Facebook Credits are the social network’s new currency that pays for goods in Facebook’s myriad addicting games. Target will be the first brick and mortar to carry Facebook gift cards. According to the retailer:
“Facebook Credits are an easy
and convenient way for people to buy digital goods in more than 150
popular social games and applications offered by independent developers
on Facebook. The newly-launched Facebook Credits gift cards will be an
ideal gift this holiday season for those who enjoy playing social games
on Facebook.”
Target shoppers will be able
to buy $15, $25 and $50 cards.
More than 200 million people play games on Facebook every month, and at least 19 games on Facebook have more than 10 million active users a month.
Facebook’s self-serve advertising platform has been performing tremendously over the last year. The social network is expected to rake in an estimated $1.3 billion in online
advertising revenue worldwide this year, up 92% from 2009, according to eMarketer. But as SiliconAlleyInsider writes:
“The whole virtual goods business – the one
Facebook is bringing to Target on September 5 – could bring in another
few hundred million dollars. Former Facebook president Sean Parker says
the business could end up being a third of Facebook’s revenues this
year.”
According to Inside Network, Americans will spend more than $1.6
billion on virtual goods and social gaming in 2010.
Meanwhile, Facebook takes a healthy 30% cut of Facebook Credits sales. The social network is already signing up new users hand over fist, but this could be a good way to boost its gaming business. That’s because people love buying gift cards. The domestic prepaid gift card market is expected to reach $86.2 billion
this year, compared with $80.6 billion in 2009, according to Mercator
Advisory Group.
Despite the impressive gaming revenues that Facebook brings in, there
are many Facebook users that never actually play or see those games. Gift cards at the register at Target and other retailers could work as great marketing to consumers who don’t currently use Facebook in that way.
Furthermore, this is a great move for Target. Facebook wants its Credits system to take off. And will be promoting the new cards in various ways. Add to that Target’s status as the first adopter to sell these cards, and the whole partnership starts to win Target some great tech savvy points.
Goodbye Blockbuster?
Jul 11th
Could your friendly neighborhood Blockbuster be a relic of the past? Yes, according to Douglas A. McIntyre of 24/7 Wall St. In fact, Blockbuster is just one of 10 national brands that may disappear as soon as next year:
Blockbuster was the national leader in the video rental business for nearly two decades. Now it is contemplating Chapter 11 to eliminate debt. The company lost $65 million last quarter. Its revenue continues to fall rapidly as firms such as Redbox and NetFlix (Nasdaq: NFLX – News) siphon off its revenue. Blockbuster has more than 6,000 stores, so it is hard to imagine that the company could disappear. But, there is some precedent, even if it is on a smaller scale. Blockbuster rival Movie Gallery said in February that it would close all of its 2,400 U.S. stores. Blockbuster’s model of renting movies through physical locations has been destroyed by cable and satellite video on demand, DVDs via mail and dispensing machines. Blockbuster may still be around as a company that has movie kiosks and a small mail and Internet-delivered content business. But its brick and-mortar business is dead.
Link (Photo: TheTruthAbout [Flickr]) – via Yahoo!
Trivia for you: Back in 2000, when Netflix was young and losing money, Blockbuster had a chance to scoop the company for a mere $50 million. Instead, they decided to ink a 20-year deal with Enron on video-on-demand when the energy company was getting into telecom. Now, Netflix is a billion dollar company, and we all know how Enron ended!
Walgreens tackles "last mile" with Pickup Zone
Jan 24th
Seems Walgreens hasn’t forgotten the problem. More than that, they may have a clever solution to it.
My local Walgreens (so far, the service is only running in New York and Boston) just debuted a free service called Pickup Zone. It’s brilliant in its simplicity and price (free!), and could be a boon for the ubiquitous drug and convenience store’s brick-and-mortar locations by bringing in foot traffic. Who, after all, doesn’t always need something from Walgreens?
The concept’s dead simple: pick a convenient Walgreen’s location (there’s a store a block a a half from where I live). Register on the Pickup Zone website. Walgreen’s supplies you with a unique code and an address to use when ordering from (presumably online) merchants. Your package arrives, they send you an email, you swing by the store to pick it up and in the process perhaps buy a quart of milk, a bottle of nail polish, a box of bandaids, tube of toothpaste or what-have-you.
Sounds like a win-win. And a much better experience than the time I brought my new vacuum cleaner home from the office, piece by piece, over the course of several days.
Amazon to set up shop on high street?
Jan 23rd
According to Reuters, however, the rumors aren’t true. It cites an Amazon spokesman who told it that Amazon isn’t looking at physical stores. The spokesman would not elaborate on possible future plans.
Needless to say, it’s hard to tell whether Amazon’s denial is really the end of the story. Where there’s smoke, there’s often fire, and for obvious reasons if Amazon is on the prowl for property, it wouldn’t want the world to know. But even if Amazon isn’t going to be setting up shop on high street, the question becomes ‘Should it?‘ That’s not such an easy question to answer.
On one hand, there’s good reason to expect that click-and-collect is only going to grow in popularity. The internet provides for a pressure-free, convenient shopping experience, while being able to pick up an internet purchase in person provides a form of instant gratification. That’s a powerful combination for consumers. One that Amazon isn’t currently providing but that increasingly web-savvy brick-and-mortar retailers are. Plenty of reason for Amazon to look closely at taking its act offline.
Yet on the other hand, Amazon has built a $50+ billion company by perfecting pure-play online retail. While I have no doubt about the company’s capabilities, one has to wonder if such a move won’t somehow distract it from its core business: selling online. Depending on how big Amazon’s offline ambitions and the approach it takes to realizing them, an offline strategy could potentially even change Amazon’s cost structure.
At the end of the day, whether Amazon sets up shop on high street (or main street) will depend on where the company thinks retail is headed. More than a decade after the .com euphoria had investors piling into Amazon stock thinking that the internet was the future of retail, Amazon has finally grown to be the company many expected it could be. But there are plenty of signs that the future of retail may be the merger of physical and virtual, and if that’s the case, Amazon may have little choice but to cozy up to high street some point sooner than later.
Photo credit: bravenewtraveler via Flickr.
Can IMShopping bring a little bit of the in-store shopping experience online?
Jan 23rd
IMShopping bills itself as ‘human assisted shopping‘. It’s the brainchild of Prashant Nedungadi, who founded Andale, and has raised $4.7m from SK Telecom Ventures. According to Nedungadi, “Human assistance will create a deeper level of e-commerce satisfaction that doesn’t exist on the Internet today“, providing the same sort of service that consumers are used to offline.
The IMShopping website functions much like other Q&A websites, such as Yahoo! Answers. If you have a shopping-related question, it’s easy to post it and view the responses when they come in. There’s also a Twitter interface. Tweet a question to @imshopping and when an answer is provided, a response will be sent to you. Nifty.
Overall, the IMShopping website is simple and easy-to-use. Even if the idea of an ecommerce-focused Q&A site isn’t entirely original, I definitely think that some consumers will find value in a service like this.
But as for bring a little bit of the brick and mortar experience to the internet, I think that’s probably not the ideal positioning for IMShopping to seek out. There are some major obstacles here:
- For IMShopping to be truly useful, the recommendations have to be diverse and they have to be credible. That’s a tough challenge. Take the example of a user looking for a recommendation for a gas heater. He was provided with only three suggestions, all from the same brand, by an IMShopper user who we know almost nothing about. This user has answered 165 questions on everything from netbooks to crib bedding. The skeptic in me can’t help but wonder if this user is really answering questions based on personal knowledge and experience or is simply going out and performing web searches to answer questions (which is admittedly the case here). Even if that’s not the case, I have no way to know otherwise. That’s quite a bit different than walking into a store and asking a question of a trained member of the sales staff.
- Some of the responses don’t inspire confidence. One starts off “I am excited to present you with a variety of HD Camcorders.
Record HD MP4 video and 5.0MP still images with the Sony Webbie HD camera“. Another begins “Looking for a tasty grilled sandwich in the comfort of your own home?” They sound too canned to be authentic; indeed, it appears that IMShopping has hired ‘guides‘ to answer questions. That’s probably a necessity to get the site going but when it becomes too obvious, it’s a turn off. - According to VentureBeat, IMShopping will generate revenue when recommended products are purchased through affiliate links. This creates a potential conflict, as there’s always the risk that the company will tend to favor product recommendations that lend themselves to an affiliate link, even though a better recommendation or lower-priced retailer may be available.
- When it comes to big-ticket items, such as consumer electronics, I think the in-store experience is often very critical to closing the sale. According to Forrester, over 50% of the consumers who avoid online shopping do so because they want to see the product first. After all, would you spend $2,000 on a plasma TV sight unseen? At most, I think a service like IMShopping could be part of the research process but that for certain types of purchases, the consumer is still likely to drop by a store to check things out, even if the eventual order gets placed online.
At the end of the day I’m not so sure that we’ll ever replicate the offline shopping experience online and while I think a site like IMShopping can be useful, I believe the biggest improvements to the experience can be made by the retailers themselves. From ratings and reviews to phone sales/support to better product photography to cross-channel integration, if the online shopping experience is ever going to rival the offline shopping experience, it will be the work of the retailers that does it.
Photo credit: Andrew Currie via Flickr.
Amazon terminates North Carolina affiliates
Jan 23rd
Although the legislation in North Carolina has not yet passed, it is being reported that Amazon affiliates in the state have been sent an email today stating that:
We are writing from the Amazon Associates Program to notify you that your
Associates account has been closed as of June 26, 2009.This is a direct result of the unconstitutional tax collection scheme expected
to be passed any day now by the North Carolina state legislature (the General
Assembly) and signed by the governor.
Obviously this is bad news for Amazon Associates in North Carolina, especially those who derive significant income from one of the internet’s most popular affiliate programs. And they may soon find that they’re not alone.
With so many state governments in the United States facing massive deficits, similar tax proposals are being considered elsewhere, including in California. Amazon has threatened that if California follows in North Carolina’s footsteps, it will have no choice but to terminate affiliates in that state too.
Proponents of the kinds of tax legislation that Amazon and other online retailers are fighting against say that states lose billions of dollars in revenue annually because the Amazons of the world don’t collect sales. They argue that the real impact on online retailers would be modest and would simply put online retailers on a level playing field with brick and mortar businesses. Amazon has countered that it’s not just about money; it’s about logistics and the Wall Street Journal reports that Amazon “would support a federal effort to streamline state tax laws and give
signatory states the authority to require all sellers to collect taxes,
regardless of whether they are physically present in those states“.
Who is on the right side of argument? While some sort of internet tax regime in the United States might be reasonable, and should be expected, one can’t help but think that the desperate rush of states to figure out ways to get their hands on additional revenue as they face fiscal disaster might just result in poorly-designed legislation that does more harm than good. Amazon’s North Carolina affiliates have already learned that the hard way.
This is definitely an issue to keep an eye on if you’re involved with online retail in the United States.
Photo credit: Poldavo (Alex) via Flickr.
It takes confidence to send customers to the competition – or a sweetheart deal
Jan 23rd
On Tuesday, T-Mobile USA announced a new campaign dedicated to helping
consumers “find a wireless plan that has the best coverage and price for you – even if it’s not with us.”
Their
new television ads, starring Catherine Zeta Jones, direct viewers to
independent price comparison engine BillShrink to prove that T-Mobile has the best prices out there. The
new spots are a huge vote of confidence in BillShrink and look like a great bit of free marketing.
The California based startup helps consumers minimize their bills and search for price
performers in a variety of areas. They started out last year with only cellular
provider comparisons, but have since raised $9 million in funding and have
expanded to other sectors, such as gas rate and credit card
fee comparisons.
The new campaign could be a huge boon in spreading BillShrink’s brand recognition. In addition to the ads that name check the service, visitors to T-Mobile’s website and brick and mortar stores can now get
a “Mobile Makeover” from BillShrink to find cost saving recommendations
for wireless plans.
It takes a lot of confidence to send consumers to the competition, but it can pay off in the end. If T-Mobile gets a reputation as the lowest price provider around, consumers could gravitate there without even verifying the veracity of their claim.
But, as it turns out, the BillShrink might not tell them otherwise even if T-Mobile’s prices don’t check out.
Today TechCrunch did a few searches on the site, and found that no matter the
criteria, BillShrink always chooses T-Mobile as the price performer:
“In
every query we ran, where minutes, text messaging, data and other
variables can be changed, T-Mobile came out as the top result that
saved users the most money. In some queries T-Mobile took every result
on the first page.”
BillShrink and T-Mobile did not respond for comment this afternoon, but if it turns
out that BillShrink is giving T-Mobile preferential treatment, this
campaign could backfire for the cellular giant. And it is even more
detrimental for BillShrink. Plenty of companies do online comparisons —
Skydeck,
Mint and doctorSIM to name a few. If
it turns out the BillShrink’s comparisons are biased in favor of their
partner companies, it renders the service pretty useless to consumers trying to save money.
No matter what Catherine Zeta Jones says about them.
UPDATE:
T-Mobile sent the following response to our query this evening:”T-Mobile
is so confident that we provide the best
overall experience for a majority of Americans that we’re willing to put our value to the test by pointing people to an independent source.” They also included links to the following articles, which point out that T-Mobile did not always win the price performance test:
T-Mobile Plays the Value Angle
Catherine Zeta-Jones Is a Cheap Date
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