retail | Zoli’s Blog

Amazon, the World’s Default Shopping Destination (or is it Zamazon now?)

Business, Customer Service July 22nd, 2009

Recently I wrote about PaaS by Amazon – an no, as much as we like thinking of Amazon as the the key Cloud Computing infrastructure provider, it wasn’t about Platform as a Service. It was about Pasta as a Service. Yes, I am buying Al Dente Carba-Nada as a subscription.

After all, before it become the uber-cloud-provider, Amazon started in retail – actually, as the company that revolutionized retail forever.

Do you know how many product search / comparison engines there are today? I don’t. A few years ago if I wanted to find something online, I probably used those comparison engines – then a funny thing happened. I noticed that I would end up @ Amazon – direct or via a Marketplace vendor – anyway. Might as well stop wasting time… nowadays I will still research major electronics, but for less than $100 purchases I will simply jump to Amazon. They do not always have the best price, but often enough, and the convenience of shopping from a trusted source, safe delivery and excellent service (no-questions-asked refund when my netbook developed a problem) makes it a no-brainer.

We’re also converting our real-world shopping to Amazon: would you spend a few hours driving around looking for a stupid little spare part, or just order it online, even if shipping makes it a few bucks more expensive? (i.e. is two hours of your time worth $5?) I’m clearly not the only one: the UPS truck, formerly rarely seen in residential areas makes its stops in my street every day now. But back to Amazon, here’s a trick to save on shipping: a lot of products are eligible for Free Super Saver shipping when you spent $25. How many times did you search for a penny-item to buy when your total came to $24.19? Add the non-immediate purchases to your “shopping list”, then bundle them with a larger purchase next time.

Another option to get free delivery and shave off an additional 15%: Subscribe and Save. Who would have thought one day we’d be subscribing to groceries? But it makes sense when it comes to regularly consumed items. I have subscriptions for tea, sunscreen and several other products that are not easy to find in regular stores, I am using regularly, and the subscription price is favorable @ Amazon. Subscription does not mean hard commitment: you can adjust the frequency of delivery, skip individual shipments, request immediate shipment and even cancel without any penalty (phone companies better pay attention!).

In short, Amazon has become my default vendor by good price and convenience. With a few exceptions, and shoes were on of them – until today. Zappos is (has been?) arguably the world’s best online source to buy shoes.

But it’s not primarily a shoe-seller. It’s the Ultimate Customer Service company. Shopping at Zappos means a few things:

best price (or close to it)
easy sizing
crowdsourced feedback
painless, no-hassles, free returns (two-way postage included)

In other words not only they have the largest inventory of shoes (the choice is actually overwhelming) they invented the formula for risk free, convenient shopping – why even get in the car and go to shoe stores?

Well, now it’s all part of Amazon in a transaction just shy of $1 Billion. Zappos CEO Toni Hsieh assured his employees and customers he would continue to run Zappos as it is. I believe him – for now, since once again, Zappos is all about service. They have a better model than Amazon, and would quickly lose customers if Amazon fully integrated them, applying their own (otherwise outstanding, just not Zappos-level) return policies. And it’s not like there’s nowhere else to run: my personal favorite has been ShoeBuy, which may be a Zappos copy-cat, but it perfected the art: same service principles, and often slightly lower prices.

If Zappos blinks and becomes too Amazon-ized, ShoeBuy will thrive. Otherwise they better watch out. And oh..hm… I don’t want to be in the shoes (pun intended) of many current shoe-sellers on Amazon.

(Cross-posted @ CloudAve)

Amazon’s PaaS, TaaS and GaaS (cloudave.com)

Tags: acquisition, amazon, Customer Service, online shopping, retail, shoebuy, shoes, xref, zamazon, zappos

1 Comment

Amazon’s PaaS with a Twist

Business May 27th, 2009

If you think this is yet-another post on Platform as a Service, you’re wrong. I’ll be talking about much simpler things here:

PaaS – Pasta as a Service
TaaS – Tea as a Service
GaaS – Groceries as a Service

No kidding. Well, maybe a bit, but this is about real business – also the focus of a recent article by Fortune: Amazon’s next revolution, discussing the early days as Earth’s Biggest Bookstore, then moving on to other businesses, and now Kindle-izing our reading habits while revolutionizing the publishing industry.

So let’s talk about retail, from the consumers’ point of view, examining how Amazon changed our shopping habits and is on the way to becoming the default vendor for just about everything we buy.

Read on …

Tags: amazon, amazon subscription, Google, googlezon, groceries, online retail, paas, price comparison, retail, subscription, xref

No Comments

The $199 Palm Pre that’s Really $299

Customer Service, Misc May 19th, 2009

…And I am not even talking about TCO, calculating life-time cost with subscription. No, just plain simply purchase price, with a dirty industry trick: rebates.

The long expected Palm Pre will be available from Spring on Jun 6th, at $199 with qualifying data plan, and after a $100 rebate. And therein lies the rub – it will cost $299 for many.

Fellow Enterprise Irregular Winnie Mirchandani has a long-going series on business processes that badly need “angioplasty“. Processing rebates is certainly a most convoluted process – unfortunately often by design. Why? It’s simple, 40% of rebates never get redeemed, says Business Week:

The industry’s open secret is that fully 40% of all rebates never get redeemed because consumers fail to apply for them or their applications are rejected, estimates Peter S. Kastner, a director of consulting firm Vericours Inc. That translates into more than $2 billion of extra revenue for retailers and their suppliers each year. What rebates do is get consumers to focus on the discounted price of a product, then buy it at full price. "The game is obviously that anything less than 100% redemption is free money," says Paula Rosenblum, director of retail research at consulting firm Aberdeen Group Inc.

What this old article fails to point out is that it’s often not the consumer’s fault who forget to send in rebates. Sure, we’re sometimes lazy to do the paperwork for a $5 discount, but you would dot it for $100, wouldn’t you? Yet it’s often the ugliness of the rebate process with built-in traps (did you cut out the UPC code from the right corner on the box, did you circle the right amount..etc), or just the ignorance of the rebate processing company (yes, that is a thriving business in itself) that robs you of your rebate check. And don’t for a minute think it’s only from Tiger Direct and other retailers who thrive on the rebate-scam. Brand-name trusted vendors aren’t any better. Since we’re discussing the Palm here, here’s my rebate experience from Handspring (the former Pal-spinoff that later reunited with the parent) from a few years ago:

Sent in not only paperwork, but an actual, working older Palm III as trade-in unit (This condition was so ridiculous, later Handspring changed it to providing serial no’s of the trade-ins.) The $100 rebate never arrived, not even after numerous phone-calls and emails. They demanded copies of everything, which I sent – but how do you copy the trade-in unit? My loss: $100 rebate, $50 trade-in value for the old Palm (that’s what it sold on eBay at the time), postage and about a full day of my time fighting the bureaucracy.

Did that stop my from buying Handspring / Palm products? Not when they were the only game in time, so I bought two more Treo’s. But guess what: Palms are not the only choice if you want a smart phone, and obviously I am still not a Palm-fan…

Back to the angioplasty, one way to streamline rebate processing is to make it an all-online process, removing the intentional hurdles. I can’t see why in the 21st century this is such a big deal. Costco sets a positive example, with simple online rebate entry, prompt payment, and online audit available for years.

But the real angioplasty would be to kill the the whole process. Forget rebates, it’s time for true transparency: call it what it is, $299 or $199, if you want to promote your product, provide a temporary discount, but forget rebates, which are just a Big Fat Lie.

(Cross-posted from CloudAve. To stay abreast of news, analysis and just plain opinion on Cloud Computing, SaaS, Business grab the CloudAve Feed here.)