Tag Archives: Amazon

Another Technological Innovation from Amazon

3 May

Not only is Amazon the leader in online retailing overall, it continues to develop innovative technology. Among its already popular innovations are the Kindle, Kindle Fire, TV Fire Stick, and Echo (Alexa).

Due to its getting more heavily involved in apparel retailing, Amazon has just patented a unique new technology-driven, custom-clothing process.

As Nick Wingfield reports for the New York Times:

“This year, Amazon will surpass Macy’s to become the largest seller of apparel in America, by several analysts’ estimates. It is looking at ways to keep expanding, too. Amazon is exploring the possibility of selling custom-fit clothing, tailored to the more precise measurements of customers, and it has considered acquiring clothing manufacturers to further expand its presence in the category.”

“If there are tipping points in retail — moments when shopping behavior swings decisively in one direction — there’s a strong case to be made that apparel is reaching one now, with broad implications for jobs, malls, and shopping districts.”

Also for the New York Times, Wingfield and Kelly Couturier describe Amazon’s customization effort:

“In April [2017], Amazon received an intriguing patent for an ‘on demand’ apparel manufacturing system, which can quickly fill online orders for suits, dresses and other garments. Here’s how it would work. (1) The process starts when customers submit online orders to the retailer for shirts and other articles of clothing, accessories, bedding, curtains, and towels. The patterns, printed onto rolls of fabric or other material, are arranged to reduce scrap.”

“(2) A “cut engine” then carves out the various pattern pieces, while cameras analyze them to make sure they aren’t being distorted in the process. (3) A robotic arm with a mechanical gripper places all the pieces into a tote on a conveyor belt. (4) The conveyor belt delivers the totes to a sewing station, where ‘an attendant and/or automated sewing machine’ stitches the item together. The items are then examined at a quality control station, packed up and shipped to customers.”

 

Click the image for many other figures that visually highlight Amazon’s customization process.

Source: Amazon 

 

Customer Service Means a Good Return Policy

3 Jan

Now that the 2016 holiday shopping season is over (except for spending gift cards), a vital question to consider from both the customer’s and retailer’s perspective is: What kind of return policy best serves my needs? For many consumers, the answer may be: an unlimited time frame to return a purchase. For many retailers, the answer may be: holding down costs as much as possible. In either case, the return policy is a key element of customer service.

These are some return practices disliked by consumers: [Note: Many good retailers do not follow these practices.]

  • An overly short time period to make a return for a full refund.
  • The amount of the refund for a gift item when the gift recipient does not have a receipt.
  • A discounted refund merely for opening the product’s box.
  • The time to process a refund for a return.
  • Items excluded from refunds, such as computer software.
  • The shipping fee to return a purchase made online.

 
Two of the acknowledged leaders are Amazon, whose return policy is easy to use and consumer friendly, and L.L. Bean, whose return policy has received various honors and awards.

As a prelude to a YouTube video about returns at L.L. Bean, Business Insider’s Sam Rega recently stated: Here’s what makes L.L.Bean’s ‘100% satisfaction guarantee’ the best return policy of any retailer.”
 

 

More Gamesmanship on Retail Prices — Even Online

14 Mar

As we wrote a short time ago, companies are not always transparent or honest when they say an item is ‘on sale’ when it really is not: “Unfortunately, many retailers misuse the term ‘sale.’ And shoppers are often persuaded that a product is on sale even when it isn’t.” According to Evans and Berman’s Marketing in the 21st Century: Price advertising guidelines have been set by the FTC and trade associations such as the Better Business Bureau. The FTC’s guidelines set standards of permissible conduct in these categories.”

STILL not convinced that all ‘sales’ really are sales? 

Then, consider these observations from David Streitfeld, writing for the NY Times:

“The perception of a bargain is fostered by online retailers’ use of something variously labeled list price, suggested price, reference price, or manufacturer’s suggested retail price. Whatever its name, the implication is that people are paying much more somewhere else. But with many products online, you could not pay the list price even if you wanted to. That is because hardly anyone is actually charging it. It is a sales tactic that is drawing legal scrutiny, as well as prompting questions about the integrity of E-commerce. If everyone is getting a deal, is anyone really getting a deal?”

“Here is one recent example of how retailers use list prices to motivate online buyers: Le Creuset’s iron-handle skillet, 11 ¾ inches wide and cherry in color. Amazon said that it would knock $60 off the $260 list price to sell the skillet for $200. Sounds like a bargain, the sort of deal that has helped propel Amazon to over $100 billion in annual revenue. Check around, though. The suggested price for the skillet at Williams-Sonoma.com is $285, but customers can buy it for $200. At AllModern.com, the list price is $250 but its sale price is $200. AtCutleryandMore.com, the list price is $285 and the sale price is $200. An additional 15 or so online retailers charge $200. On Le Creuset’s own site, it sells the pan for $200.”

 

Click the image to read more from the NYT.

A Le Creuset 11¾-inch skillet sold for $200 at more than a dozen Web sites, but the list prices they quoted varied. Photo Credit :Gretchen Ertl for The New York Times

 

The Effect of Online Ratings on Consumer Behavior

28 Oct

Amazon has shown customer reviews and ratings for years. Many other retailers have followed suit. So, a vital question is: What is a good online rating score for a retailer or a specific product? The results of a recent study may surprise you, since a 5.0 out of 5.0 rating is NOT the one eliciting the most customer purchases.

As reported by Retail TouchPoints:

“While every retailer pushes for perfect ratings to illustrate the effectiveness of their products, these ideal ratings may not be optimal for sales. On a scale of one to five, the likelihood of purchase peaks for products with an overall average star rating between 4.2 and 4.5, according to research from Northwestern University.”

“Above 4.5, purchase likelihood drops as the rating approaches five stars. Five-star reviews actually are often considered ‘too good to be true’ by the consumer. As counter-intuitive as that logic may seem, negative reviews can have a positive impact because they help establish trust and authenticity with the consumer.”

To download the full Northwestern University/PowerReviews study on online ratings, click the image below. NOTE: A free signup is required.
 
 

 

Will the New $50 Amazon Tablet Be a Success?

9 Sep

Amazon has offered a variety of Kindle Fire tablets for the last few years. These tablets are less expensive than the iPad and offer a number of features. Now, to pump up sales, Amazon plans to introduce a new $50 tablet in time for the holiday shopping season. HOW DO YOU THINK THIS PRODUCT WILL DO?

Why introduce a $50 tablet? As Greg Bensinger reports for the Wall Street Journal:

“Amazon.com Inc. has struggled to draw customers to its pricier tablets. So it’s going further down-market. The Seattle online retailer plans to release a $50 tablet with a 6-inch screen, in time for this year’s holidays, according to people familiar with the matter. That would make it one of the least-expensive tablets on the market and half the price of the company’s current Fire HD 6-inch tablet.”

“The move would potentially attract buyers looking for a simple — and effectively disposable — device for straightforward tasks like streaming video at home and shopping on Amazon.com. But such inexpensive tablets typically come with compromises like inferior screen quality, durability, or battery life in comparison to more expensive tablets like Amazon’s larger Fire tablets and industry-leading devices like Apple Inc. ’s iPad. For instance, the $50 device will have a mono speaker, rather than stereo, one of the people said.”

“The $50 device is part of a slate Amazon is planning to release this year that will also include tablets with 8-inch and 10-inch screens, according to the people familiar. Amazon has long sought to undercut its hardware competitors, in part by eschewing profits on the devices themselves. Rather, Chief Executive Jeff Bezos has said, the company prefers to make money by selling services that work with the devices, like E-books and video rentals.”

 

 

Amazon Creates Its Own “Prime” Holiday

8 Jul

To stimulate its Prime Membership business, Amazon has created a new “Prime Day” holiday on July 15, 2015.

As Tim Parry recently reported for Multichannel Merchant: “While not unheard of globally, Prime Day appears to be the first self-created selling holiday launched by a U.S.-based web merchant. Selling holidays have shown to be successful in China: Alibaba’s Singles Day (November 11) in China brought that marketplace $9.3 billion in one-day sales. And last month, JD.com announced record-breaking one-day results from its June 18 JD.com Anniversary Sale.”

Here is Amazon’s blurb about Prime Day, followed by a YouTube video:

“On the eve of Amazon’s 20th birthday, the company will celebrate Prime Day — a global shopping event with more deals than Black Friday, exclusively for Prime members. To celebrate Prime Day and launch a Prime Living Photo Contest, local artists were commissioned in every Prime-eligible country, with locations ranging from Toronto to Milan and Seattle to Berlin to create their interpretations of #PrimeLiving. What is #PrimeLiving? Members frequently reveal how much they love Prime. So Amazon is providing members a forum to share how Prime helps enable some of their happy moments. Did you save enough time today to take the dog for a long walk? Did you finish your shopping while lounging at the beach? After a long week of work, did you still arrive in the perfect outfit with just the right gift? Take a snap, capture the moment. Between July 6 and July 15, Amazon invites members to enter a photo in the Prime Living Photo Contest for the chance to win the equivalent of $10,000 in Amazon Gift Cards. No purchase necessary. See contest rules.”

 

 

Regulatory Issues In Europe for U.S. Tech Companies

24 Jun

For quite a while, the European Commission has been rather tough in regulating large  American companies doing business in Europe and penalizing them when their practices are deemed unacceptable — sometimes, billions of dollars in fines as well as changes in business activities.

As Kelly Couturier  recently noted for the New York Times: ” The biggest American tech companies face intensifying scrutiny by European regulators — pressure that could potentially curb their sizable profits in the region and affect how they operate around the world.”

Here are some examples from Couturier:

  • Amazon — Antitrust: “The European Commission opened an investigation in June 2015 into whether the company used its dominant position in the region’s E-books market to make it harder for rivals to offer lower prices.” Taxation: “The European Union released a preliminary finding in January 2015 that a tax deal between Amazon and Luxembourg appears to amount to unfair state aid that may have enabled the company to underpay its taxes.”
  • Apple Antitrust: “European competition officials confirmed in April 2015 that they had sent questionnaires to music labels and rival music streaming companies to gather evidence and decide whether to open an antitrust investigation into Apple’s new music service.” Taxation: “Officials opened an investigation in June 2014 into whether Ireland gave preferential tax treatment to Apple.
  • Facebook Data privacy: “French, Italian, and Spanish privacy officials announced in early April 2015 they had opened investigations into the social network’s privacy policies; similar inquiries have already been started by Dutch, Belgian, and German officials. The regulators are asking whether Facebook gained sufficient approval from users when the company gained access to their online data.”
  • Google Antitrust: “In April, the European Union’s antitrust chief, Margrethe Vestager, formally charged the company of abusing its dominance in Web searches, accusing it of diverting traffic from its rivals to favor its own products and services, particularly Web sites for shopping.” Right to Be Forgotten: “Europe’s highest court ruled in May 2014 that citizens have a so-called right to be forgotten, and that search engines, including Google, must honor some requests from users to delete links to personal information.”
  • Microsoft Antitrust: “In a long-running antitrust case involving Microsoft’s software and interoperability, the company paid almost €2 billion in European fines over a decade, including a penalty in 2013 for failing to adhere to an earlier settlement.”Right to Be Forgotten: Microsoft, which operates the Bing search service, signaled in July 2014 that it planned to follow the lead of Google, by creating an online form that lets individuals request removal of links to material they say violates their online privacy.”

 

 

Click the image to read Couturier’s full article.
 

Shown here: An Apple store in Berlin. Credit Adam Berry/Getty Images for Apple

 

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