Archive for the ‘Amazon’ Category

Amazon TextBuyIt

textbuyit1.jpgWhen you are shopping over the web, its very easy to compare prices through multiple browser tabs, but comparison shopping is not so easy to do in a brick & mortar store. Browsing e-commerce sites using most cell phone browsers is a painful experience. Text messaging on the other hand is a very easy task on most cell phones and for younger cell phone users, “texting” is the primary method of communication.

With that as the backdrop, Amazon is once again showing that it “gets it” and in the process, has created a new competitive advantage against traditional retailers. TextBuyIt is an innovative new service which lets people text the name of a product, its description or its UPC or ISBN to 262966 (that’s “Amazon” on the keypad) from anywhere their cellphones work — including from inside physical stores.

If Amazon stocks matching items, the service returns two results at a time. Shoppers can immediately buy one of the first two the selections by texting back the number “1″ or “2,” or they can ask for more by texting the letter “M.”

New TextBuyIt customers will be prompted to enter the e-mail address associated with their existing Amazon account plus a shipping zip code. The service then calls them and walks through the checkout process using an automated voice system. Shoppers get confirmation by text message and e-mail.

From there, the customers can check on order status on Amazon’s website.

Why This is Disruptive

Say you’re out shopping at the mall and see some new, expensive thing that you just gotta have. Historically, you have had no way of knowing whether the price is good or not. By allowing you to send a simple short text message to initiate an order, Amazon has just empowered you with comparative price information to make a fact-based decision about the purchase in the physical marketplace and in the process, have inserted themselves into the middle of your purchase process in hopes of steering your dollars in their direction

This is a clear “Make It Easy for Me” differentiator targeted squarely at younger, text-message-oriented consumers. It is also a wake up call for traditional retailers already impacted by the information empowered consumer. Your competitor is now actively competing with you inside your four walls.

 

[From USAToday]

Niche Marketing: Narrow, Not Small

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An article published today in Advertising Age really resonated with me. It makes the case that the maturing marketplace, combined with the hyper-connected, in-control consumer “has created a seismic shift from one-size-fits-all mass markets to millions of markets of self interest.” That assessment carries huge implications for retailers who are trying to move product that was once a specialty, but is now a commodity. Strategy consultants Booz Allen Hamilton explain it this way:

As every market matures, choice increases. Then competition drives up quality and convenience to the point at which offerings become commoditized. The only businesses that then thrive are those that move beyond “me-too” or incremental offerings to marketing more-relevant and more-differentiated products and services. The only way to accomplish this is to focus on a narrower target.

Technology & The Long Tail

Technology has played a major role in facilitating this shift. Marketers are now able to micro-target specific groups, engage customers with more frequency and intimacy, and customize to consumer specs. Moreover, technology has enabled consumers with the tools to seek out suppliers that offer just the thing they want.

Think about it. If you are a retailer focused on selling lots of stuff to lots of very different people, you are probably fighting a loosing war of diminishing margins, market share and profitability. On the other hand, brands that have figured out how to excel at attracting and keeping loyal a narrowly focused niche will probably continue to do well. And why is that? Once you, the customer, has experienced having your ever-increasing levels of self-interests met by a niche provider, you have a hard time going back. For example, why would I continue to go back to a retailer for accessories that I know from previous experience, they probably will not have (not even on their website).

As even a senior Wal-Mart official recently said, “no customer today will stand to be treated as part of a mass market anymore.”
This is a major disruption and marketers who fail to respond to it quickly will suffer. According to Advertising Age, the value propositions of those who ignore niche marketing…

“…will be less relevant than those of competitors. For those slow to adopt niche marketing, the future also is bleak. Attempts to recoup share will be difficult because competitors will have preemptively established closer customer relationships.’

A number of brands and marketers have embraced niche marketing. Names like Target, Crocs, Red Bull and American Girl. The all have the same objectives as any other marketer, but they have sensed the disruption and have responded by finding a new way of going to market.

Narrow, not Small

The other thing that has changed is what niche marketing really means in today’s environment. It’s still “the targeting of a more narrowly defined customer group seeking a distinctive mix of benefits”, but niche markets are not the “marginal opportunity” that they were once viewed to be. Today, niches are viewed much more positively.

In today’s marketplace, niches are flourishing. Some niche brands are generating hundreds of millions in sales. Sometimes, narrow niches, fueled by mavens and connectors, become the next big, disruptive thing. The big point of the article is that niches should not be equated with small. Instead, think of narrow. Then target very specific groups who will relate to and find differentiation in your offering. At this point, you are no longer a commodity and you can increase your margins by charging a premium. Do this over and over with different products and services, and you can generate volume and growth that makes up for your narrow targets.

Smaller targets, larger focus
Ten years ago, the medium was still the message. Eight years ago, we could still think of the 4P’s — product, pricing, place, promotion — as essentially independent strategies. Five years ago, everyone started to buzz about customer-relationship marketing. About two years ago, we got really excited about digital-marketing tactics and started to apply them without any real strategic purpose. All this has changed.

So what’s really new about the new niche marketing? It’s realizing that while our targets have to narrow, our definition of marketing communications has to broaden. Today, everything communicates what a brand stands for, all the time.

It’s like the old saying: If you are on the wrong train to begin with, every stop along the way is the wrong stop.

The article closes with 10 principle to harness the power of niche marketing:

  1. Position your brand as narrowly as is economically possible.
  2. Become the specialist that anticipates the needs of your target.
  3. Rapidly work with the target niche to co-innovate.
  4. Set as your goal such consumer centricity that the target niche will want to co-brand their identity with yours.
  5. Live by a higher standard of ethics.
  6. Embrace a business model and metrics that grow the most valuable assets of the new niched economy.
  7. Reap first-mover advantage by learning how to identify a niche of opportunity.
  8. Re-imagine your role as that of entrepreneurial founder of a special interest group.
  9. Forget push marketing; excel at pull marketing.
  10. Realize your brand is now “media” competing against all other media

What do you think? Does this make sense to you ? Can you think of companies that could immediately benefit from leveraging niche marketing?

(Source: Advertising Age)

Update on Amazon.com Experience

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I finally have an update for you on the Amazon Experience.  Over three weeks after I applied for an Amazon (Chase) credit card, I get a message from “Card Services” asking me to call them.  I call, they answer “Card Services, do you have a reference number”.  I say I do and ask what band they are representing.  At that point they identify themselves as “Chase Card Services”.   

If any of you can explain why banks need to be so secretive, I’d love to hear it

Anyway, I give them the reference number and the agent tells me she sees where I had applied for an Amazon card.  I say yes and ask why after three weeks, I still didn’t have an account.  I don’t get an answer, but am told that they see I already have an account with Chase and they would like to know how much I would like to set my credit limit at.  They offer a couple of really high numbers, to which I say “just give me the minimum”. 

They tell me I will have my card in 7-10 days and that i will have to wait until it arrives before I can use the account at Amazon.  This is contrary for the way Amazon says the process works (another strike).

So after 3 weeks, I have an account, but can’t us it.  The hold up was that Chase wanted to offer me lots of credit; something I didn’t want.  The process has resulted in Amazon not getting a sale.  Bad experience all around.

When Your Partners Don’t Deliver the Experience

amazon_com_logo.pngYou’ve worked hard to create a great customer experience that defines your brand.  You’ve been a leader in differentiating your offering from the competition and have made significant investments to maintain that advantage.  You have maintained your focus on your core business by partnering with others to deliver the services that they have expertise in.  But do they share your passion for delivering the great experience?  Is ensuring that your customers have the best possible experience their top priority?

Working in retail, I can site any number of cases where the partner doesn’t deliver on the brand and I am personally in the middle of one of those cases right now.

Two weekends ago, I decided to purchase a device to allow all the computers in the house to share our new laser printer.  I found what I wanted at Amazon and the price was right.  During the checkout process, Amazon asks if I would like to save $30 on the purchase by opening an Amazon Visa account.  $30 off a $65 item???  Heck yeah!   I LOVE AMAZON.  So I click the button.  I am magically transported to a Chase Bank page where I fill out all the important info.  I click Submit and proceed to the checkout where I expect to see my new Amazon account listed as an option.

OK, here’s where things start to fall apart.  I see Amazon Visa as an option, but it wants my account number.  Hmm, OK… I know how these things work.  There will be an e-mail congratulating me on my new account, so off I go to my mailbox.   That’s odd, no e-mail.  Shouldn’t there at least be be something that says “thanks for your application, were looking at”?  If the internet is indeed just a series of pipes, then perhaps the pipes are clogged.  I decide to turn my attention somewhere else and come back to this later.  This is the internet equivalent of getting fed up with a ridiculously slow line and walking out the door of a real store.

ATTENTION AMAZON:  I have now left your store without making a purchase!!!!!

I tried to call the Amazon Credit Card Customer Service number, but apparently they only work weekdays buring “normal business hours”.  Obviously, no one shops on the internet at night or on weekends.

On Monday morning, I reach the Customer Service department, which I suspect is outsourced by Chase to some third party provider.  They see where I have an application pending, but cannot provide any additional information other than to say that the approval process can take up to 30 days.   WHAT???????  30 DAYS to approve a credit card???  Isn’t this the same Chase Bank that sends me offers for new credit cards every week?.  Is this not the 21st century?  Aren’t credit applications processed by computers?  

At this point, I could simply purchase the item from anywhere else, but I am so amazed at how poorly Amazon and Chase have handled this experience so far, that I decide to stick it out to see how (if) it gets resolved.  I check back periodically during the week and it is now Sunday night, and I still have not received any notice one way or the other from either Amazon or Chase.  The item is still in my cart, but the price has increased by $4.oo since I first selected it (another annoyance).  I’ll provide updates to this post as the story develops.

Why do companies let these little annoyances happen to their customers?  Dissatisfaction is the big Loyalty Killer.  Sure, I’ll probably still purchase from Amazon, but I am not likely to click on any of their added value services because I don’t trust them (or should I say their partners) to be able to execute.  In retailing, those added services are where the margin lies.  In my world, that’s the extended warranty, the credit and the installation services.  Ironically, it’s the delivery of those services that are most frequently outsourced to third parties; organizations whose priorities ae frequeently not aligned with mine.

Is your organization using partners to deliver on your brand’s experience?  How well are they living up to your customer’s expectations?

The Download Wars Have Begun

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Pulling off quite a coup, Wal-Mart has entered the movie download business with a bang.   In the announcement today, the company announced agreements with all six major movie studios — Walt Disney, Warner Brothers, Paramount, Sony, 20th Century Fox and Universal — to sell digital movies and television shows on its Web site (www.walmart.com/videodownloads), becoming the first traditional retailer to do so.   Wal-Mart, who lost the battle against Netflix on DVD rentals two years ago, sees that the bigger opportunity is in downloads.

The move plunges Wal-Mart into direct competition with established players like Amazon.com, CinemaNow and the 800-pound gorilla, Apple’s iTunes.  Wal-Mart will face a number of challenges.  Apple dominates the digital download space, leaving only a very small share of the market for others to scrap over.  And where Wal-Mart is the king of retailers, they have no real competence in digital distribution.

What they do have is clout and they have leveraged that clout to do what Apple has been unable (or unwilling) to do:  to pull together all the right Hollywood players.  Wal-Mart has also partnered with Hewlett-Packard to create an easy-to-use Web site and develop a broad library of videos.

Movies will run from $12.88 to $19.88 on the day the DVD drops, while older flicks start at $7.50. All movies will have roughly the same price as the actual DVD at Wal-Mart stores, though.  Not sure why download customers would want to fork over almost what you’d pay for the actual DVD, but then again, I’ll do just about anything to avoid going to a Wal-Mart.  The pricing is designed to protect the DVD business which will keep the studios (who have considerable clout themselves) happy.

The service will have TV shows from Comedy Central, CW, FX, Logo, MTV and Nickelodeon.  Major networks are not in the mix as of now. TV shows run a bit cheaper than iTunes, at $1.96 a pop.  Altogether, it will offer “access to 3,000 productions,” with the mix split roughly 50/50 between movies and TV shows.

Just as MP3 downloads have disrupted the CD business (just ask Tower records), digital movie downloads will be disruptive to the DVD business and possibly other CE products such as DVRs.  You can already watch recent episodes of ABC shows for free.  If, in the near future, I can get high-def downloads of shows that I missed, why pay for a hi-def Tivo and the monthly subscription that goes with it?  This disruption could also impact CE retailers who do not move into the digital distribution space.  The war is just starting, but it will be interesting to see how it develops.

<via NY Times>

New Amazon Feature: Part Gameshow, Part Market Research

Amazon Votes 01

Karl Long over at Experience Curve posted about an innovative new feature that Amazon is running:

Nice little interactive “e-tailing gameshow” from Amazon, essentially they are putting up 4 products with super low prices ie. xbox for $100, or a full suspension mountain bike for $30. The community votes on which product they want for the cheap price. The winning product will have a limited quantity (1000 xbox’s), and will go on sale on thanksgiving day at 2pm EST.

No surprises on what people are voting for…. the $100 xbox.

Second Life Residents Build Stores Around Amazon.com

OK, I promise this is the last post about Second Life  for this week, but since I blogged about this way back in June, I just gotta tell you the news.  Several Second Life residents have set up shops on the world’s most popular retail shopping site, Amazon.com.  They want to use its virtual environment to actually sell physical goods via Amazon.com.

Linden Lab of San Francisco, creator and operator of Second Life, doesn’t track the Amazon goods sold, since Linden doesn’t make money from the sales.  Nevertheless, the extension of Amazon.com’s reach into a place with more than 1.3 million residents has potential for big sales over time, given Second Life’s growth rate.  Since September, the population of the online world has jumped from 735,000 subscribers to more than 1.3 million.  Second Life residents do a total of about $6 million worth of business a month, up from about $2 million a few months ago.

This is an unprecedented linkage between one of the largest online virtual worlds and the world’s largest (physical) online retailer.  Inhabitants of the Second Life online universe will now be looking for real-world money by setting up stores powered by Amazon.com, Inc. (NASDAQ:AMZN).

I have to imagine that anyone savvy enough to reside virtually in Second Life and build a community in that environment probably already knows about Amazon.com’s role as a real-life provider of goods.  But that’s not what’s at stake here.

Turning a “browser” into a “buyer” requires the right combination of mood and environment — and Second Life inhabitants are by nature more tuned in to this than most.

As for Amazon, the 1.3 million citizens participating in Second Life ain’t no small potatos. That a demographic ripe for mining.  Now whether it becomes a fixture in Second Life will be left up to its members, as they are the ones who will continue to build the revenue-sharing virtual stores and write the scripts needed to integrate with Amazon’s web services for third-party retailers.

Second Life Residents Build Stores Around Amazon.com – News by InformationWeek

Microsoft to offer movies, TV shows on game service | Reuters.com

Looks like the predictionfrom fellow WordPress blogger Shsibae was right on the mark as Microsoft announced today that it would rent movies and sell television shows through Internet downloads to its Xbox Live video game service.  

“Microsoft will begin on Nov. 22 to offer standard and high-definition films such as Warner Bros.’  “Superman Returns” and “Jackass: The Movie” from Paramount Pictures through its Xbox Live Marketplace.   Television shows will include Viacom Inc’s  “South Park” and “CSI: NY” from CBS Corp.  Viewers will need the current-generation Xbox 360 console with a hard drive to take advantage of the service.”

Under the rental model, which is reminiscent of the now defunct DivX Disk technology launched by Circuit City Stores back in 1997,  Microsoft customers have a two week window from when they download a movie to watch it, but once they begin watching it they have only 24 hours to keep it. 

With Netflix planning a download service,  Apple’s upcoming iTV,  Amazon’s movie store, On Demand services from cable providers, and Sony’s PS3 video download function (I’ll believe it when I see it), the customer really has a lot of choices.  Which models will survive this tech war?  What will this mean to businesses who sell or rent DVDs?  I can’t say, but it will be fun to watch.

Here are the specifics:

  • Microsoft has not yet disclosed pricing for downloads, but it will be in Microsoft points.
  • Movies will be “rental” only, TV for “purchase” only.
  • At launch there will be over 800 hours of SDTV, and 200 hours of HDTV.
  • Neither TV nor movies are streamed; they are only downloaded, although you can stream short preview clips from the Live interface.
  • You can only download content to your Xbox 360 drive — not to an external drive.
  • Your “purchased” TV programs can be downloaded an infinite amount of times to an infinite amount of consoles; you may also play them back on friends’ 360s with your removable drive.
  • Deleted TV shows can be re-downloaded later; HDTV shows can be re-downloaded in either HDTV or SD.
  • Movies can be watched an unlimited number of times the first 24 hours. Plays after that period will cost the same as the initial download, although the movie data isn’t necessarily deleted. You can keep the movie data on your drive up to 14 days without re-downloading it.
  • Downloads are in VC-1 (aka WMVHD) at 720p, 6.8Mbps video with 5.1 surround.
    An average HD movie download should be between 4-5GB, and a two hour SD movie would be 1.6GB.
  • An average 1 hour (44 min) HDTV download should be about 2.2GB, and an average 1/2 hour (22 min) HDTV download should be about 1GB. A 1 hour SDTV download should be about 600MB, and a 1/2 hour SDTV download should be about 300MB.
  • This service will not be available for MSN TV users, Vongo subscribers, or any other Microsoft partners. It is Xbox Live only.
  • You cannot download programs through the Xbox Live web interface — they can only be transported to your 360′s removable drive.
  • There aren’t any drive announcements being made, but there is a rumor of a 80GB drive coming.  Of course, Microsoft rumors are never true, right?

Launch titles

Aqua Teen Hunger Force
Avatar: The Last Airbender
Batman Forever
Breaking Bonaduce
Carpocalypse
Chappelle’s Show
CSI
Hogan Knows Best
Jackass: The Movie
Jericho
The Matrix
M:i:III
Nacho Libre
Nicktoons Network Animation Festival
Numb3rs
Pimp My Ride
Race Rewind (NASCAR NEXTEL Cup Series races)
Raising the Roofs
The Real World
Robot Chicken
Skyland
South Park
SpongeBob SquarePants
Star Trek (original)
Superman Returns
50 fights from Ultimate Fighting Championship, and some episodes from The Ultimate Fighter
Microsoft to offer movies, TV shows on game service | Reuters.com

What Will Jobs Do??

Sticky Fingers

On Tuesday Apple fans the world over will be on Steve Jobs, the co-founder and chief executive of Apple, when he is expected to announce the most ambitious iPod service yet – the sale of feature-length films via the internet for viewing on the devices, which may receive an expanded ‘widescreen’ and improved storage capacity.  Wired has a nice piece containing a number of creative mock-ups depicting what the new iPod design might be.  Interestingly, Amazon jumped into the video download business last week, trumping this weeks Apple announcement.

There are rumors that Jobs will also announce a long expected ‘iPhone’, combining the music function and sleek style of an iPod with a mobile phone.

Amazon trumps Apple in delivering video download store

Reuters is reporting that Amazon.com (Nasdaq:AMZNnews) on Thursday unveiled a widely anticipated Internet service offering movies and TV shows that can be downloaded to personal computers, moving it into a nascent and higher-margin business. }

The service, called Amazon Unbox, will offer thousands of titles from six Hollywood studios, including 20th Century Fox and Warner Bros., and TV networks such as CBS and Fox and cable channels Comedy Central and E! Entertainment, Amazon said.

You can either buy the shows outright or just rent them in WMV format for watching on your computer or a portable device. You have to use the Amazon Unbox software to watch movies, and you can’t burn it to DVD so you can watch it on your TV.
Amazon’s digital download service launch comes ahead of an expected announcement by Apple Computer Inc. (Nasdaq:AAPLnews) on Tuesday that it would sell feature-length films on its iTunes service, which already sells TV shows from major networks.

Buy in SecondLife, Receive in FirstLife

According to Erick Schonfeld over at Business 2.0's blog, some engineers at Amazon are informally working on linking Amazon's APIs to the virtual world Second Life.  If that were to happen, it would mean that Second Lifers could then open up virtual shops selling real-world goods (via Amazon).  Avatars in Second Life could select from the huge catalog of products that spans from books to electronics and music and the product will be delivered to their first life door.  Robert Hof at Bizweek reports:

In response to an audience question at the Supernova conference, Amazon CTO Werner Vogels revealed that a group of Amazon engineers is looking at ways to use Amazon Web services to bridge Amazon with Second Life. According to a comment by Vogels at the virtual-worlds blog 3pointD.com, it's not an official project. But it's no secret that Amazon CEO Jeff Bezos is an investor in Second Life creator Linden Lab.

Amazon Launches On-Line Entertainment Show

Retailers are realizing that they are now part of an Experience Economy and the competition today requires them to move beyond products and services and offer their customers differentiating and entertaining experiences.  Yahoo Tech has launched a series called "Hook Me Up" in which everyday people solicite a story about why they need a new electronics setup.  Winners stories are produced for a weekly on-line show similar to those that you might see on HGTV or TLC.

Now Yahoo is joining in in a big way with the launch of "Amazon Fishbowl" hosted by comedian, Bill Maher.  The 30-minute program will also feature live performances from musicians and is scheduled to launch June 1.  United Parcel Service is sponsoring the show, which will stream live for 12 Thursday nights during the summer.

The purpose of the show is to interest shoppers in buying more books, CDs and DVDs 

Check out the preview here:  Amazon Fishbowl

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