Amazon
Re: Amazon
Currently one of our top fund managers favourite companies who we have supported (ie invested in) for almost 10 years to become one of our largest holdings. For Amazon it's all about customer satisfaction. We need more Jeff Bezos's in the corporate world.
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Re: Amazon
Interesting angle, Andy. Had expected Amazon to snap up old Comet premises to provide showroom facilities.Andy G wrote:The Amazon model though is a weird one. Given breaks, govt grants etc that home grown traders dont have, its hard for anyone at a small size to compete with them.
Expect to see more small stores vanish from the highstreet.
Too many manufacturers have gone for short term gain with Amazon vs long term strategy, especially where people want to see, touch and feel the products.
They are a clever set of barstewards, in every respect, and have most angles covered.
A nightmare to deal with at times on the B2B side.
Surely can't be long before they move in this direction...? Views?
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Re: Amazon
no chance they'll move in to showrooms Campbell. None. No point. Their business model couldnt take the overheads. And they are creating a lot of empty retail units. Bricks and Mortar stores just could support anything like their inventory. Add staff, rates , rent - the fact they might actually have to pay some tax in the UK etc.......
Single biggest issue at any manufacturers product launches and normally first question is " Will Amazon get this?" .
Amazon will sell at cost to a loss to get traffic & customers. They have logistics costs that mean they will most likely take over a courier if they havent already, as the contract is worth a lot but is very hard to make any money off.
As i say great for the consumer, a nightmare for everyone B2B wise, but a very good customer of ours distribution wise and a great platform for AMP3 - but one that is very hard to make money from, and takes constant management.
There is a definate case of shoppers going in to store to check out goods and then checking what Amazon will sell at. If that continues to happen how will they survive. We are seeing companys, so long established well run companys vanish monthly ( was weekly/daily) and increasingly the only independants that are making money in Electronics or surviving are doing so by selling white goods which Amazon cant yet!
That said we are doing a launch next month with Amazon on one of our headphone lines, Cordcruncher, which should appear on about 900K mobile devices - interesting to see how well it works, and please let me know if anyone sees it!
Single biggest issue at any manufacturers product launches and normally first question is " Will Amazon get this?" .
Amazon will sell at cost to a loss to get traffic & customers. They have logistics costs that mean they will most likely take over a courier if they havent already, as the contract is worth a lot but is very hard to make any money off.
As i say great for the consumer, a nightmare for everyone B2B wise, but a very good customer of ours distribution wise and a great platform for AMP3 - but one that is very hard to make money from, and takes constant management.
There is a definate case of shoppers going in to store to check out goods and then checking what Amazon will sell at. If that continues to happen how will they survive. We are seeing companys, so long established well run companys vanish monthly ( was weekly/daily) and increasingly the only independants that are making money in Electronics or surviving are doing so by selling white goods which Amazon cant yet!
That said we are doing a launch next month with Amazon on one of our headphone lines, Cordcruncher, which should appear on about 900K mobile devices - interesting to see how well it works, and please let me know if anyone sees it!
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Re: Amazon
.......and it will only get worse. I have not bought a single present from a shop for years now, great for me to be able to do it all from a chair, but not so for the smaller shops that may not be on line. I remember tramping the streets before Xmas with the great unwashed to buy presents and it still makes me shudder.
The same with all my car parts, electronics, laptops, iPads etc, and I presume for most on here. Also groceries, wine, etc, why traipse around a Supermarket throwing items in a trolley, that is if you can find them, when they will do it for you, deliver it, and the delivery charge is less than the fuel that you would use to get there.
tut
The same with all my car parts, electronics, laptops, iPads etc, and I presume for most on here. Also groceries, wine, etc, why traipse around a Supermarket throwing items in a trolley, that is if you can find them, when they will do it for you, deliver it, and the delivery charge is less than the fuel that you would use to get there.
tut
Re: Amazon
I agree on all but the groceries. I buy everything other than that online (though tbh, buying groceries online, you're just buying from the same stores you usually buy from anyway...)
The checking in store, and buying online something that I see as a problem from a business perspective, but from a consumer point of view, why should we pay more for the same items?
The showroom idea is an interesting one, if it ever happens, imo anyway, it'll be the manufacturers that do it, back to the idea of Shop @ Panasonic and Sony Centres, though this time around either with no sales, or maybe better prices...
What this does across the board price wise, who knows, as the bill has to be footed by someone. I'd like to see it as a reduction in range as these companies already sell far too many cross over products, although the flip side is that at the premium end of the TV market for example, there are really only a few models that count - and it's only the premium end that counts as most people who don't care much probably buy a budget spec TV from a supermarket anyway...
That does mean that those of us who want a very good set will struggle to find one on display though..
An alternative route might be to have regular tech show at places like the SECC where people can go and view the latest kit, then go home and buy it online.
The checking in store, and buying online something that I see as a problem from a business perspective, but from a consumer point of view, why should we pay more for the same items?
The showroom idea is an interesting one, if it ever happens, imo anyway, it'll be the manufacturers that do it, back to the idea of Shop @ Panasonic and Sony Centres, though this time around either with no sales, or maybe better prices...
What this does across the board price wise, who knows, as the bill has to be footed by someone. I'd like to see it as a reduction in range as these companies already sell far too many cross over products, although the flip side is that at the premium end of the TV market for example, there are really only a few models that count - and it's only the premium end that counts as most people who don't care much probably buy a budget spec TV from a supermarket anyway...
That does mean that those of us who want a very good set will struggle to find one on display though..
An alternative route might be to have regular tech show at places like the SECC where people can go and view the latest kit, then go home and buy it online.
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Re: Amazon
The Supermarkets have to be making less profit by selling on line rather than in store. For a start you make out a list and order it, whereas you make out a list, go to store, and always buy extras so they miss out on the impulse buying that they target.
Then they have to have pickers to gather it all and put into baskets, load onto vans which they would not need, along with drivers likewise, whilst charging the same prices plus £3 delivery, and saving you fuel if you do it yourself.
I bet they would turn the clock back if they could, but once one starts the others had to follow.
tut
Then they have to have pickers to gather it all and put into baskets, load onto vans which they would not need, along with drivers likewise, whilst charging the same prices plus £3 delivery, and saving you fuel if you do it yourself.
I bet they would turn the clock back if they could, but once one starts the others had to follow.
tut
Re: Amazon
We're persevering with Tesco online grocery shopping at the moment. It's really not working, and it's not saving money, but we're giving it a good go to see if we can get used to it.
1) It takes longer. This is partly because we haven't been doing it long, but it's mostly because of the usability, or lack thereof, of Tesco's website. Part of this is unintentional badness, but some of it is seemingly-deliberate attempts to stop you doing a 1-click "Send me everthing I ordered last week" each time, but to browse, hunt, search and generally stuggle your way to a weekly basket. The whole model is broken. They have no innovation and the whole shopping basket thing (ironically a metaphore online retail stole from supermarkets) works for a few items, but doesn't work for a week's shopping for a family.
2) Many of the products I know for certain (because I buy them) are stocked at Inverurie Tesco are not available online. We have to pick a different product, which is either a smaller size (losing us bulk savings) or an equivalent brand (which is either not to our taste, or more expensive). This is probably to standardise or at least control the items available online vs the differences in products stocked in different stores. Either way, it's a PITA.
3) Choice of fruit and veg. You can add text instructions to the picker, such as "large cauliflower please" but invariably the worst pick of the sh*t from the tray arrives. You can reject any item you like for a refund, but who's going to make a trip to the store just to pick up a few items you weren't happy with? Might as well do the whole thing while you're there. The delivery fee only makes sense if you don't need to spend the petrol going anyway, so usually we just accept it and grumble quietly.
4) Inspiration. We're losing out on meal variety. I find it a lot easier to shop for meals when I'm standing surrounded by memory jogging foods, but my mind seems to go blank if I sit down in front of the screen. Shopping in-store is just easier, although I admit that's my problem, hence we're not giving up yet.
5) Comparisons. In-store, you can see every similar item from every other brand, and you can see the yellow labels telling you what's on offer this week. The website actually goes out of its way to stop you comparing. It's a nightmare. You lose all opportunity to compare like-for-like and make a choice based on value or deals. Yes, we're saving by not adding oh-so-temping Brew Dog IPA and Lagavulin DE to the basket every week, but we're losing out on the stuff we do buy.
6) worst of all, you miss all the clearance stuff. Who doens't love the half-price chunk of stilton or a cheeky choccy desert for 99p ?
So, all in all, it's more expensive, takes longer, is less inspirational for meal ideas, is disappointing when crap veg and substituted products arrive, and is deliberately tricksy and unusable to make you spend more, at the absolute expense of usability and ease of repeatability.
The whole online retail thing is stuck with this "product categories and shopping basket" model, and needs a complete makeover, but, like all my other huge million-dollar ideas, I just can't be arsed, and who would listen anyway?
I suspect in a few months I'll go back to doing a weekly shop myself, in-store.
EDIT: Just thinking about the actual point I started answering, which was Tut's question of why they even bother.
1) They can force their choice of products on to customers in new ways. The stores are merchandised to suggest high-profit items, using all the usual tricks of layout and eye-level and number of facings etc. Online opens up new ways to trick you into buying stuff, and that's a good thing for them.
2) They can use up crappy veg, or frustrate you into buying pre-packed (for consistency) which I suspect many online shoppers do eventually, which is higher margin for them.
3) They can increase your weekly spend by keeping you away from deals and clearance items.
4) For every online customer, they are still keeping market share (i.e. guaranteeing you're not shopping at Sainsbury's or Morrisons). This alone is worth any losses, if they do in fact make losses, which I doubt. Market share is huge. Tesco run free (I think ?) buses for pensioners round here to collect them, take them to the store, and take them home again. All in the name of having more customers than Morrisons. More market share = higher share price, and every penny spent is a penny taken from competitors.
1) It takes longer. This is partly because we haven't been doing it long, but it's mostly because of the usability, or lack thereof, of Tesco's website. Part of this is unintentional badness, but some of it is seemingly-deliberate attempts to stop you doing a 1-click "Send me everthing I ordered last week" each time, but to browse, hunt, search and generally stuggle your way to a weekly basket. The whole model is broken. They have no innovation and the whole shopping basket thing (ironically a metaphore online retail stole from supermarkets) works for a few items, but doesn't work for a week's shopping for a family.
2) Many of the products I know for certain (because I buy them) are stocked at Inverurie Tesco are not available online. We have to pick a different product, which is either a smaller size (losing us bulk savings) or an equivalent brand (which is either not to our taste, or more expensive). This is probably to standardise or at least control the items available online vs the differences in products stocked in different stores. Either way, it's a PITA.
3) Choice of fruit and veg. You can add text instructions to the picker, such as "large cauliflower please" but invariably the worst pick of the sh*t from the tray arrives. You can reject any item you like for a refund, but who's going to make a trip to the store just to pick up a few items you weren't happy with? Might as well do the whole thing while you're there. The delivery fee only makes sense if you don't need to spend the petrol going anyway, so usually we just accept it and grumble quietly.
4) Inspiration. We're losing out on meal variety. I find it a lot easier to shop for meals when I'm standing surrounded by memory jogging foods, but my mind seems to go blank if I sit down in front of the screen. Shopping in-store is just easier, although I admit that's my problem, hence we're not giving up yet.
5) Comparisons. In-store, you can see every similar item from every other brand, and you can see the yellow labels telling you what's on offer this week. The website actually goes out of its way to stop you comparing. It's a nightmare. You lose all opportunity to compare like-for-like and make a choice based on value or deals. Yes, we're saving by not adding oh-so-temping Brew Dog IPA and Lagavulin DE to the basket every week, but we're losing out on the stuff we do buy.
6) worst of all, you miss all the clearance stuff. Who doens't love the half-price chunk of stilton or a cheeky choccy desert for 99p ?
So, all in all, it's more expensive, takes longer, is less inspirational for meal ideas, is disappointing when crap veg and substituted products arrive, and is deliberately tricksy and unusable to make you spend more, at the absolute expense of usability and ease of repeatability.
The whole online retail thing is stuck with this "product categories and shopping basket" model, and needs a complete makeover, but, like all my other huge million-dollar ideas, I just can't be arsed, and who would listen anyway?
I suspect in a few months I'll go back to doing a weekly shop myself, in-store.
EDIT: Just thinking about the actual point I started answering, which was Tut's question of why they even bother.
1) They can force their choice of products on to customers in new ways. The stores are merchandised to suggest high-profit items, using all the usual tricks of layout and eye-level and number of facings etc. Online opens up new ways to trick you into buying stuff, and that's a good thing for them.
2) They can use up crappy veg, or frustrate you into buying pre-packed (for consistency) which I suspect many online shoppers do eventually, which is higher margin for them.
3) They can increase your weekly spend by keeping you away from deals and clearance items.
4) For every online customer, they are still keeping market share (i.e. guaranteeing you're not shopping at Sainsbury's or Morrisons). This alone is worth any losses, if they do in fact make losses, which I doubt. Market share is huge. Tesco run free (I think ?) buses for pensioners round here to collect them, take them to the store, and take them home again. All in the name of having more customers than Morrisons. More market share = higher share price, and every penny spent is a penny taken from competitors.
Last edited by graeme on Tue Feb 25, 2014 11:34 am, edited 1 time in total.
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Re: Amazon
I used Tesco online once years ago and found it poor. What really put me off it was when I used to go into the actual shop post night shift and watch the workers fulfill the online orders. I must take too much care selecting un-bashed fruit and things that'll be in-date for the week ahead it seems.
Re: Amazon
Never going to happen - they cant afford it and arent set up to be able to do it - hence the Sony Store modelCorranga wrote:it'll be the manufacturers that do it, back to the idea of Shop @ Panasonic and Sony Centres, though this time around either with no sales, or maybe better prices...
They are actually stopping supplying the all singing all dancing models to Amazon to try and get people back to their stores. Panasonic - not one store left in the UK, Sony less than half the ones it had!
These guys arent making a fortune on the product either - most of the money comes from the install side of it.
The prices are determined by the manufacturer anyway, and when did you last see a profit warning for Sony
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Re: Amazon
White goods manufacturers have different prices for online stores and showrooms. You get bigger discounts if you have a bricks-and-mortar shop, otherwise no studio could ever compete with online, and there would be nowhere to showcase or even display their products.
Maybe hifi etc might go the same way if it hasn't already? Not that it will help, as somehow Appliances Online can still undercut.
Buying groups is another way proper shops can compete. Shops joining forces to get access to bulk deals usually only available to the big places. That's quite powerful.
Maybe hifi etc might go the same way if it hasn't already? Not that it will help, as somehow Appliances Online can still undercut.
Buying groups is another way proper shops can compete. Shops joining forces to get access to bulk deals usually only available to the big places. That's quite powerful.
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Its a complex one to manage. With HiFi - there is a tiered pricing system and even more powerful is the limitation of certain products and lines to Bricks & Mortar only - some manufacturers even have lines that they only sell to the grocery chains. Issue there is that some of the bigger bricks and mortar groups buy it and require the ability to then list it online - using their pricing advantage to compete with Amazon - so Amazon then require the pricing to compete or you lose the revenue stream from them. There are very few bricks and mortar stores that will take product and not list it online - they'll just not take the line - and the independents who do simply don't do the volume to make the limited lines viable.
The way HiFi is going with B&M is to drift away from mainstream brands and concentrate on boutique stuff where the buyer really wants to listen to it and have a system specced and installed, leaving the customer nowhere to actually listen to something mid-ranged on the high-street.
The way HiFi is going with B&M is to drift away from mainstream brands and concentrate on boutique stuff where the buyer really wants to listen to it and have a system specced and installed, leaving the customer nowhere to actually listen to something mid-ranged on the high-street.
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Re: Amazon
Which might just work...
I auditioned a lot of stuff before buying my (not exactly expensive in the grand scheme of things) hifi in the listening room. Can't imagine buying that stuff online.
But then I just bought an AV amp online based on reviews, features and budget. Couldn't give a toss what the TV sounds like. I have my eye on a 5.1 speaker package at around £600 and I'll buy that online without hearing it too. As long as noise comes out, and explosions go boom, I don't really care beyond that. So yeah, I can see what you're saying there. Consumer stuff online, boutique stuff in listening rooms.
There's middle ground at the moment... what about the likes of John Lewis? Not a shed, not a specialist. Not catering for the Amazon crowd, or competing with Currys either. Somewhere in the middle. Mid-range gear. Not usually the cheapest, but always busy. How are they surviving?
I auditioned a lot of stuff before buying my (not exactly expensive in the grand scheme of things) hifi in the listening room. Can't imagine buying that stuff online.
But then I just bought an AV amp online based on reviews, features and budget. Couldn't give a toss what the TV sounds like. I have my eye on a 5.1 speaker package at around £600 and I'll buy that online without hearing it too. As long as noise comes out, and explosions go boom, I don't really care beyond that. So yeah, I can see what you're saying there. Consumer stuff online, boutique stuff in listening rooms.
There's middle ground at the moment... what about the likes of John Lewis? Not a shed, not a specialist. Not catering for the Amazon crowd, or competing with Currys either. Somewhere in the middle. Mid-range gear. Not usually the cheapest, but always busy. How are they surviving?
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JL are a wonderful anomaly at the moment - largely due to the perception that the service and range is a cut above the Currys of this world. Because it is in most cases. Plus that 5 year warranty, which they may or may not still do on their electricals. They still hang onto the aspirational middle market pretty well - it's trust, market perception and a little middle-class snobbery factor that keeps them in the mix, forging their successful wee path.
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Re: Amazon
Makes sense. They've got a strong brand/position in their own right, so they're not trading off the brand of the electricals they sell.
Plus their staff are hotter. Maybe not in electricals, but the totty working in the Aberdeen store is worth any trip through the perfume gas.
Plus their staff are hotter. Maybe not in electricals, but the totty working in the Aberdeen store is worth any trip through the perfume gas.
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Yep it's Brand brand brand for JL customers.
It's no wonder though as the shopping experience in the likes of currys is abismal. My pensioner mum bought a TV in there recently and was conned into the extra warranty at about £5 a month. They told her that she couldn't take the tv without it and that all she had to do was phone and cancel it. It only came to light when she saw a strange debit on her account. Not even a direct debit but taken using the debit card that she bought the tv with. To me that is just taking advantage and plain wrong. Makes the blood boil.
I've used AO for white goods purely to avoid having to use currys and aside from the 'courtesy' call to try and flog their extended warranty it was delivered on time and does what it says on the tin. I did check the price with JL first too.
It's no wonder though as the shopping experience in the likes of currys is abismal. My pensioner mum bought a TV in there recently and was conned into the extra warranty at about £5 a month. They told her that she couldn't take the tv without it and that all she had to do was phone and cancel it. It only came to light when she saw a strange debit on her account. Not even a direct debit but taken using the debit card that she bought the tv with. To me that is just taking advantage and plain wrong. Makes the blood boil.
I've used AO for white goods purely to avoid having to use currys and aside from the 'courtesy' call to try and flog their extended warranty it was delivered on time and does what it says on the tin. I did check the price with JL first too.