Wal-Mart posts deals link on Facebook

        

            The biggest social net work, Facebook, I believe its major revenue come from the online advertise. And now, the largest retail supermarkets, Wal-Mart made a new cooperative relationship with Facebook. The new promotion program is called CrowdSaver.  Basically, Wal-Mart began offering a product and a proposed discount for that item on the the Wal-Mart Facebook page. If enough consumers clicked the "Like" button below the product description, the retailer promised to honor that discount until supplies run out. The first item offered under the CrowdSaver program this week is a 42-inch plasma TV from Element Electronics that Wal-Mart said it would sell for $398—which the retailer said was 18% off the regular price—if 5,000 consumers pressed the Like button.  Consumers who pressed the button first had to become a Facebook follower of Wal-Mart.

Apple onile store in China

         Apple Inc, originally came from California, has launched an online official store in China for Apple’s royal fans in there. Meanwhile, Apple states that company already finished the mobile application, the especially design for the Chinese language.

         

         This is a very smart strategy since many Apply products that Chinese consumers use are grey market products, mainly imported from Hong Kong illegally. Due to the unavailability of online official store before, Chinese Apply fans forced to purchase Apply products –Iphone, Itouch, Ipad-  through grey maktet because of the  adequate inventory outside of mainland China, and the

         Apple’s expansion into China follows other foreign retailers’ efforts to market to China’s 400 million online consumers. Recently, for instance, Goldman Sachs Inc. projected that Amazon.com Inc., No. 1 in the Top 500 Guide, could generate annual web sales from China of $1 billion in 2011, up from $750 million this year.

         However, I am still doubtful of the efficiency of the Apple online store in China. Regardless of the adequate inventory now, but consumers are more concern about how much they have to pay. Comparing the price of iphone from Taobao.com, the biggest Chinese online auction and shopping website operated in China by Alibaba Group, I do not see the price competitive edge listed in Apply online store. These iphone and ipad sold at Taobao are most the gray products. They are cheaper due to the Hong Kong’s Tax policy advantage.

The new partnership between Groupon and Ebay

          I am a frequent visitor of Groupon.com, and I do not if there is anyone familiar with this website. But I strongly recommend this site to you, especially to the “deals digger” you. According to the description of the web site itself, Groupon negotiates huge discounts on popular local goods, services and cultural events. Then it offers the deals to thousands of subscribers in a free daily email. The deals are activated only when a minimum number of people agree to buy. More exciting to me is that there is only one deal post every day.

          Now, Ebay aims on Groupon. Maybe Ebay considers this new style of group-buying discount business offer a big potential from market.  So, they made an agreement, which is about EBay shoppers who have signed up for the company’s loyalty program receive 5% of the purchase price back as eBay Bucks, which members can use toward purchases on eBay.

          EBay visitors who click on an advertised Groupon offer which directly connect to Groupon’s eBay store. And than they can select “buy now,” leading them to the Groupon .com to complete the transaction. Alternatively, Ebay’s royal customers could to “sign in” to earn eBay Bucks. That consumer then is sent to Groupon’s site to complete the coupon purchase. Just like other internet retailers, Groupon declines to disclose the financial terms of the arrangement. When working with small retailers, Groupon typically takes 50% of the purchase price of the Groupon offer.

 

E-commerce is not limited in computer internet base

        Adobe Mobile Experience Survey found 43% cell phone owners have purchased series of product such as movie, music, ring-tone and games to get more fun for their phones. This survey is made between March and August this year. And one third of the sample size states no purchase at all. But those owners who made purchase through mobile phone internet are also bought  for clothing, shoes or jewelry in 30%; 28%, electronics; 26%, books, magazines or newspapers; 20%, grocery, health or beauty; 20%, computers or office; 16%, sports or outdoors; 16%, toys, babies or kids; and 13% home, garden or pets.
        More importantly, two third of sample size expressed that they would like make purchase by mobile applications if they use cell phone to shopping. This is definitely a good news for those retailers already set applications for cell phone, but an another big alert for the retailers do not take this fact in account or completely ignore it.

        “As cell phones get smarter, people are using them less to make calls and more to text, shop, read news, play games, engage with social networks and perform routine tasks,” Adobe writes in the survey report. “As the pace of smart-phone adoption quickens globally, businesses have to be invested in the channel and move beyond the planning stages to start executing and gain some learnings on how users are interacting with the mobile channel.”

CVS new online application for iphone users

CVS is moving forward to the new field of E-commerce, the mobile phone online shopping. The existence of iphone should be one miracle for cell-phone industry, but its power affect deeply to other business industries. For example, Wall-Street journal designed cell phone reading function for iphone users long time ago; Amazon, of course, cannot ignore this business opportunity to catch their royal customers. Now, CVS joined in, it launched new application for iphone fans. The app, which complements the merchant’s m-commerce site and another iPhone app dedicated solely to prescription refills, offers a variety of features and functions, enabling customers to:

• Find nearby CVS/pharmacy locations using the GPS-based store locator with integrated driving directions and maps.
• Refill prescriptions from a personalized prescription history for pickup at any CVS/pharmacy.
• Access the CVS.com Drug Information Center to retrieve details about medication management including instructions for use, dosing information, side effects and safety warnings.
• View and manage the sales circular to create a custom shopping list and identify weekly deals.
• Schedule a flu shot at any CVS/pharmacy location.

Is E-commerce an ideal business to start ?

          One forecasting for the retailer industry caught my eyes: e-commerce sales will represent 8 percent of all retail sales in the U.S. by 2014; and 154 million people in the U.S. bought something online, or 67 percent of the online population. Every day, more and more consumers in the world are switching over to e-commerce to fulfill their shopping needs. For me, online stores and marketplaces are a convenient, and often cheaper, option for anyone with an internet connection and a credit card.  With everything from cars to groceries to clothes and electronics being sold for reasonable prices online (often tax-free and with free shipping), there is little reason for consumers to ever leave the house to go shopping anymore. 

         "It's the fact that you can research the products that are available," said Barbara Staib, president of Safe Home Products, "survey indicates 89% of consumers prefer online shopping." What a surprising data it is! Online retail does not appeal to one demographic or region in particular, it has expanded in scope to encompass the entire world, as everyone desires to find the best bargain possible, something that online retail often provides.  Neilsen reported in 2005 that 1 out of 10 people around the world now shops online, and cites a desire for better pay options as a barrier from more entering the online marketplace.  And I believe, this number is keeping growing.

           Large multi-national e-commerce companies such as Amazon.com compete for the same customers. For sure, consumers would like shop at Large e-commerce companies because it offer the lowest prices due to the fact that they benefit the most from economies of scale. In additional, because they carry so many different merchandises, they offer more product choice to all customers in different marketing segments. For example, let me give you a number first:  including the Amazon “market place”, Amazon's total SKU reaches to million. As the online sales keep growing year after year, nobody want to reject the statement that on-line retailer will replicate the leading retailer position held by Wal-Mart today, giving leaders in the E-commerce industry more ability to dictate rules and pricing to its suppliers simply because of their enormous market share.

         

           So, it looks like E-commerce is a pretty ideal business to start. Really? I want to say that the barrier to entry in the e-commerce industry can be either low or high. Do you believe for only a few thousand dollars, new entrants can establish their own website and begin selling products immediately? Yes, this can be true. However, new entrants are very unlikely to be successful outside of small niche markets. To compete with industry leaders such as Amazon.com, Yahoo.com, and Ebay.com, new entrants must be willing to commit hundreds of millions of dollars to investments in distribution, technology development, and relationships.

            

            Let's take an observation about running an E-commerce company. First of all, we all agree a competitive e-commerce company successfully establish the advantage in distribution by operating multiple fulfillment centers across the United States (or whatever country they are doing business in). Fulfillment centers are located hundreds of miles apart from one another and are frequently located near airports to ease transportation.  Large volumes allow industry leaders to benefit from economies of scale.

         

           Secondly, operating a successful e-commerce website requires a huge investment into web development and technology – millions of dollar. For example, Amazon.com has a competitive advantage due to its patented "one click buying" technology. I like make an online purchase through a single click by using previously entered billing and shipping information. This creates a more enjoyable buying experience for me and customers and encourages repeat business. At the same time, legal protections prevent competitors from copying this technology. "Amazon Windowshop is a top-to-bottom rewrite of Amazon.com – designed and built without compromise ," said Jeff Bezos, founder and CEO of Amazon.com. "Try it. I think you'll find it’s an amazing way to shop Amazon's millions of items. Same selection, same low prices, same fast delivery, same benefits of your Amazon Prime membership – just a completely new, fluid interface designed specifically for lean-back, touch screen tablets.”

             

           Moreover, new e-commerce companies have an especially tough time with relationship building due to the fact that the e-commerce industry is still dominated by the original “first movers.” Established e-commerce companies have relationships with industry and channel players that date back to the birth of the industry. As we can image, a new entrant could not expect to have enough time nor money to build closer relationships with these players before facing stiff competition from the first movers.  The new entrant will constantly be judged based upon a performance benchmark set by the first movers.

            

           One the other hand, the rivalry in the e-commerce industry is pretty high. This is due to the tremendous amount of power that we all have in the e-commerce industry. Because there are very low switching costs on the internet, we-the buyers- definitely want to find a cheaper competitor that offers the same product. This has led many e-commerce companies to target niche markets where they can avoid purely competing on price. Often niche markets will only have one or two direct competitors.

            

           Furthermore, the threat of substitutes in the e-commerce industry is a big concern for most E-commerce companies.  Large e-commerce companies like Overstock.com or Amazon are able to offer customers a wide range of products and services, however they are not without many competitors and thus substitutes. Within the e-commerce industry, there are many different retailers that sell the same product. The largest substitutes for the industry overall are the brick-and-mortar stores such as Costco, Target, Ralph’s Macy’s or Barnes & Noble.  These traditional stores offer customers a lot of tangible benefits that online stores cannot.  For instance, reading a book with a cup of aroma coffee at a Barnes & Noble offers its customers a relaxed atmosphere and environment where they can spend time browsing books, listening to music, and drinking coffee without feeling pressure to make a purchase.

           Traditional brick-and-mortar stores also provide customers instant gratification because they can use their product immediately, whereas online customers have to wait for their product to be shipped.  Also, customers at brick-and-mortar stores can physically touch a product before buying it, which allows them to verify that they have the right size. Physically touching the product may also cause the customer to become emotionally attached to the product, creating an impulse buy. Because they can see what they are purchasing, it is easier for customers to trust brick-and-mortar stores.

           

           Regardless of type, it is very easy for shoppers to switch between substitutes.  There is relatively no switching costs and it is difficult for online retail stores to build strong customer loyalty—although some companies like Amazon are rare exceptions.  

A New Way to Get Shipping Fast and Cheap

It looks like some on-line retailers are building a kind of alliance to against their biggest “enemy”, Amazon.com. The way for these allies to win this battle is by the major concern from internet consumers: Shipping.

Recently I saw an advertisement many times from different websites; “unlimited free 2-day shipping”, the display of slogan was so impressive to me with bold and capitalized letter. This program is run by a company called Shoprunner.com - basically customers pay $79 per year, and they can get fast free shipping with no minimum order size, as well as unlimited free shipping on returns for all ShopRunner items and its participating stores.

This is a particular provocation toward Amazon’s shipping program that is called “Prime”(Launched in 2005). They both charge same amount of membership fee and guarantee same speed of shipping, but Shoprunner got one more favorite feature that Amazon could not offer to their customers: free shipping for return goods.

So far, there are more than 40 retailers partner with Shoprunner, which includes Babies 'R' Us, Pet Smart, Barnes&Noble, Borders, Dick's Sporting Goods and GNC, etc. That means as long as customers have the membership, they defiantly get shipping benefit from any of these participating stores. Retailers' willingness to work together under ShopRunner illustrates how seriously they take the threat from Amazon, whose customer base has grown at the expense of traditional retailers as shoppers migrate to the Web. 

Buyers rely on products research

     One survey based on sample size of three thousands US adults at the age between 18 and 40S indicates that in nowadays, about 60% US online consumers will go online for researching the goods and services at first if they consider to buy it. This is an increasing of 10% from a same survey in 2004.

     Moreover, more and more Americans begin their on-line purchasing experience by comparing the products’ prices to many websites or just clicking on “price searching engine”. They also carefully check the product’s review posted by other buyers. Further, 25% of on-line buyers say they are willing to share comments and opinions after using the goods and leaving some experience on websites.

Customers spend more time on on-line shopping, but little patient about site technical issues

     According to the new survey ( Tealeaf Technology Inc.), internet shoppers are tend to be less patient for websites’ technical problems that course some delay of pictures display and check-out transaction. Meanwhile, this survey indicates consumers are spending more time for online purchasing than last year. Base on the survey outcome, online shoppers, on average, buy 3.4 times monthly, comparing to 3.1 times of last year.  At the same time the online retailers diversify their product line and lowing price, they ought to pay more attention to the development and maintenance of website in such competitive market and less-patient trend.