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Amazon.com Japan's new 'Scan Search' enables consumers in any real-world store to point their cell phones at a product's barcode and then be instantly directed to Amazon.com.jp on their phone screen, where they can view the -- no doubt lower priced -- item, and have it sent to them straight away. The future? Nokia is already working on a phone that can 'read' RFID tags, the latter being the new bar codes.
I check in regularly on another board that is populated by brick-and-mortar retailers in a niche industry. They're so tired of being used as free showrooms for online discounters that some are starting to charge a consulting fee before you get to take a closer look at the products. Technology like this will escalate the war ...
What's the way of the future here? What can real-world retailers do about competitive tactics that are so invasive? Cell phone jammers?
What can real-world retailers do about competitive tactics that are so invasive?
In the UK retailers fight back (and I'd say pretty successfully) by having their own online operations that may charge less (special Web deals). Store managers don't like it, but consumers do.
... and cover their costs how?
There are some items that consumers aren't willing to purchase sight unseen over the internet, so they check them out in real world stores first. The small retailers whose discussions I observe are going crazy, going broke or both from being used that way.
[edited by: buckworks at 8:31 pm (utc) on Jan. 14, 2005]
If the offline stores notice that they are competing with Amazon or others from people that walk-in then charge less in the offiline store and raise prices for the online store. You may not get all sales, but I'm sure you will still get people to buy online. This way you aren't losing customers, business, or money.
I really think the hype about this is overblown. Yes, there are bargain hunters who will use this in a way that's not going to help the brick & mortar guys, but they wouldn't be buying anyway. This technology isn't making everyone into window shoppers.
Last year there was a big deal made out of the new camera phones with 2 megapixel resolutions. The bookstores and magazine stands were freaking out because some industrious people were coming in, photographing articles they wanted to read, and leaving without buying anything. Was this the end of bookstores in Japan? No. There's still something to be said for the paper original. People will still buy books and magazines.
The same holds true for the brick & mortar retail crowd. Their business will hardly be impacted by this for the most part...at least with the current technology available.
Not overly practical, given the ongoing how small can we go design mania for all things electronic. Even the freebie phones are quite easily palmable these days.
There will always be people who simply use up some available O2 before they go off to make a purchase elsewhere. Ourbid blueball ain't stop spinning voer it yet, and I doubt this new wrinkle will cause too great a wobble.
Retailers that compete on price on products that do not require a lot of service will lose in the long-term. In order to survive, retailers must differentiate themselves by offering value in ways that Internet companies cannot.
You have to compete on something. If you cannot compete on price, find something else your customers care about, and compete on that.
You can't really do that since the advantage of barcodes is that they can be read by everybody. There is no much data kept in it as well. RFIDs however will overcome problem of being scanned (visually) and readers might have to have public key based encryption chips that will only be issued to authorised stores with tight control.
Those who try come up against Wal-Mart and that leads to bankruptcy.
The only way to survive the competition is on service and quality, and hope there is still enough of a population out there who cares about service and quality.
That population, however, is dwindling fast as our standard of living (US) is gradually being equalized with the third world as our jobs and manufacturing centers go there as well.
But that's another topic.
I would gladly buy something from my local store over the internet IF:
1) the price wasn't TOO much higher
2) the item was in stock NOW
3) the salesperson was knowledgeable and not a stupid drone (as most seem to be today).
Sorry - a bit grumpy this morning.
What can real-world retailers do about competitive tactics that are so invasive?
Or charge more and add value to the product with better service, faster delivery, etc. If your brick and mortar business is easily replaced with a computer program then you react to that by doing things a computer program cannot.
Lobby for legislation.
against what? other legitimate businesses?
Just because you can't compete you want to legislate?
That's not the way of the free-market. Some survive, some don't. Perhaps these old style stores are destined to die out.
I personally don't think so. It's worth the extra $2 to buy my stuff from REI where I can try it on, look at it, touch it and take it NOW, as opposed to hoping it will fit, waiting a week, and paying shipping from CAMPMOR.
I predict a trend for more and more separation between the charges for "product" and "service".
The customers who drive retailers crazy
Retail always complains about customers. The danger is believing the break room rhetoric that the individual customer doesn't matter. It's the mentality that, when it consumes a store, destroys the store.
Why is that customer checking products in the store? Because the customer is ready to buy and only needs to confirm their research. If that's not a golden opportunity, I don't know what is. If your reaction is to grumble behind the counter or call your senator about "Window Shopping Laws" then you've missed the point of why you are there: to provide customer service.
I've walked into each of my local consumer electronics stores ready to spend $300-$500 on a gadget and I walked out of each of them because they couldn't even politely tell me they didn't know the answer to my question. I got bluffed B.S. from a person who wished they were anywhere else but there. When reading anonymous reviews on a computer screen is better customer service than a real person holding the real product, then the traditional model has failed.
When reading anonymous reviews on a computer screen is better customer service than a real person holding the real product, then the traditional model has failed.
And to add to that, perhaps I'm just getting older and more grumpy, but I'm really tired of being "waited on" by know-nothing teenagers everywhere I go.
I walked out of each of them because they couldn't even politely tell me they didn't know the answer to my question
I recall one particular incident, this was recently when I went MP3 shopping. I was at one of the large retailer stores and they had many different selections of MP3 players. First, I couldn't even get anyone to service me, the person behind the counter was chatting away with one of her co-workers, paying me no attention. Finally, when I got her attention, she couldn't answer any of my questions, let alone she wouldn't even do any simple research (like ask another co-worker or manager, or get online...the computer was right behind her) to find my answers so I can make a wise choice on the products they sold. And on top of all that should had a nasty attitude and it felt like she was insulted that I was asking her questions and that I was a consumer who didn't know exactly what I wanted.
I knew I wanted a MP3 player and the only one I was familiar with was the iPod, but they had so many more on display, so I asked her simple general questions to find out which is better or more for the money. I even asked which one sells the most, besides the iPod...she didn't have a answer. I truly believe that she knew some of the answers to my questions, but she didn't care about me as a consumer so she blew me off. It was like she was in a rush or as if I was bothering her, like she had other things to do (she's at work for God's sake...isn't tending to my needs her job?). I just grabbed my daughter and left the store. The customer service was just so bad there, that it made me almost completely turn away from that particular store for good. It's a large retailer so it's hard to say that, but I have not been to another one since.
I'm really tired of being "waited on" by know-nothing teenagers everywhere I go.
But isn't this just another symptom of the problem? Margins are so low, especially in electronics, that Brick and Mortar businesses feel forced to keep personel costs low in order to compete.
US minimum wage of $5.15 an hour is not going to get a knowledgable sales person. That's only a little over $800 a month gross.
You get what you pay for!
Those competing on price alone (ala Walmart) have been known to counsel their employees on how to take advantage of Govt. programs for the poor, rather than pay a living wage. (We end up in the rather odd predicament of govt. giving tax breaks to companies in order to get them to locate in their area, and then subsidizing the ridiculously low wages they pay with things like food stamps, welfare and emergency medical interventions that emergency rooms will never be paid for.)
And it creates the vicious circle of low paid workers shopping for low priced goods, which can only be produced and sold by low paid workers....