Slashdot Mirror
Online Retailing Comes of Age
The final Christmas shopping figures for 2001 are not in, but some industry analysts believe the new savvy and sensitivity of online retailers might have rescued the U.S. Christmas shopping season in the wake of September 11, when a lot of people either stayed home or tightened their belts. "I can't be quoted on this until the figures are finished," a friend and research analyst e-mailed me, "but I believe online shopping really saved retailing last year. The sites and service are getting so much better, and consumer confidence in them -- especially among women -- is skyrocketing. Online retailing is not only on the rise, it's really getting to be fun and easier. More importantly, they grasp customer service, something almost no software or hardware company yet does."
If that's so, and it definitely matches my personal shopping experiences, it's huge news for the Net. Consumers, chronically abused by the software and hardware industries, were initially anxious about buying things online. They worried about hackers, crackers and security; they faced poor customer service and complex downloading and other problems. But those problems -- unlike similar headaches in the larger computer industry -- are being addressed.
Retailers competing online this holiday season were a lot shrewder, says a story on About.com about the online retailing industry.
About.com cited a survey of 63 retailers who found a successful holiday season marked by a surprisingly effective combination of widespread promotions and discounting. Most consumers hate spam, but it doesn't bother them so much if it's about things they want, and if they're getting something for the attention. Both multichannel and Web-based retailers seemed to have learned a lot from past marketing missteps. The Shop.org/Boston Consulting Group (BCG) found that more advanced retailers, after carefully studying the economics of each online and offline promotion, are finding ways to offer the minimum discounts necessary for increasing sales volume and ways to deliver targeted promotions to the more than 100 million consumers estimated to have used the Net over the holiday season.
Besides that, sites have radically improved their graphics and visual representations of products. As fears about theft and security have subsided, companies have radically upgraded their customer service. This is in striking contrast to tech industries which sell products that are confusing and difficult to use, and either makes themselves unavailable to confused or outraged customers or charge them extortionate fees for "priority service," which is really just the service they would be entitled to for free in any other business.
If you want to see smart web businesses, I'd cite two in particular -- L.L. Bean and Pet Food Direct. L.L. Bean's site architecture is brilliant -- well organized, easy to navigate. It shows clear pictures of all of its products and allows easy customer access to account information, while still providing security. More interestingly, the site offers customers several ways to get instant help -- phone, instant messaging, nearly instant e-mail response. If you're encountering problems, you can simply e-mail or call and a human will respond promptly. This support is crucial to building consumer confidence. A shopper is much more likely to risk buying something online if they know they can get help with any problems. Tech shoppers are among the most distrustful on the planet after years of confusing products and poor service.
Pet Food Direct also offers a different kind of targeted retailing, e-mailing customers weekly about specials, sales and promotions on the products they have already demonstrated they want and use regularly. This isn't quite like spamming, since it's stuff the buyer needs. And the sharp discounts have a way of offsetting any irritation. The site isn't trying to be funny or cute. Rather than promoting a silly sock puppet, it offers heavily discounted pet food and reminds pet owners when they are apt to need it. It also offers sophisticated graphic renderings of products and instant customer service both online and by telephone. The purchase takes seconds. The discounts are heavy enough to attract shoppers attention, but apparently not so heavy to erode profits. One reason is that the site, like L.L. Bean, gives the consumer a variety of shipping choices, from regular mail to next day air. And the customer pays for shipping, choosing exactly how much of a discount he or she wants. In both cases, the sites don't spam -- they target people who have bought and need their products.
Dozens of other sites have similarly polished their presentation, honed their sense of marketing and discounting and, most importantly, invested in tech support and customer service. Shoppers feel secure not only through repeated use, but through the sense that somebody will speak to them if problems arise.
This is something that, alas, computer and software companies still haven't learned.
http://www.theregister.co.uk/content/archive/21862 .html
Consumer confidence in ecommerce and the Internet is growing despite the effects of the weakening economy, according to a joint survey by Yahoo! and ACNielsen.
It seems consumers are becoming more confident about disclosing their credit card details online and more trusting that goods they've ordered will be delivered.
And it seems the growth in ecommerce sales comes against the backdrop that consumers realise buying online doesn't necessarily mean the goods will be cheaper than in the high street.
Put together, these results helped the second wave of the Internet Confidence Index register a five point rise compared with June.
Three months ago, the survey predicted that the US would spend $9.9 billion online during the third quarter. This time round analysts predict that the US will spend $16 billion online during Q4 in the run up to the holiday season.
Critically, the survey found that the future growth of ecommerce depends on a strong Q4 and the opportunity it gives ecommerce novices to buy online.
The research found that if these "light" Net users (those who use the Net less than once a day) have a good online shopping experience they're more likely to become regular eshoppers.
And turning "light" users into "heavy" Net users is key to making ecommerce part of mainstream consumerism.
Said Rob Solomon, VP and GM of Yahoo! Shopping: "The results have further confirmed what we have experienced over the last two holiday seasons; holiday shopping has become the impetus for light Internet users to shop online, many of whom in turn become regular online shoppers
Cruise TT
I'm surprised he didn't talk more about Amazon's profit, as .coms making profits are clearly signs that online retailing has come of age.
Remember, there were no nuclear weapons before women were allowed to vote.
--- Submission is feudal.
but what'll they do next quarter? i think I've got all the books i need, other than the Salmon of Doubt with will finally be coming out, but heck, I can get that at the local book shop faster...
A feeling of having made the same mistake before: Deja Foobar
....most wall street analysts panned the profits made by Amazon in the first quarter. As a retailer, the last quarter (Oct/Nov/Dec) is supposed to be their biggest quarter of the year, and by a large margin. Amazon barely made a profit that quarter. Sales for the next three quarters are going to be significantly lower for Amazon, basically until the holiday season begins anew. I seriously doubt Amazon will make a profit for those three quarters, and will still be a bad investment for the next several years.
Online retailing has not come of age.
why should this surprise anyone, considering all the dotcom's that were selling absolute garbage (flooz, etc) are now out of business, leaving only the stores that sell something people may want to buy? (amazon, etc)
your jesus is another mans xebu. chew on that hypocrites.
I think its still a bit too early to talk about ecommerce booming.
This is what happened with the dotcom hype. People jumped on the bandwagon too early, and got shot down. I'd be interested in seeing a report on ecommerce in like 2-5 years.
Good quote, too many chars. Seriously, the slashdot 120 char limit sucks!
Hmmm... Amazon turned a profit, someone knows more about this topic at about.com than you and you like LL Bean's website. So what?
oh... and this is rich...
Most consumers hate spam, but it doesn't bother them so much if it's about things they want, and if they're getting something for the attention.
Like what? An X10 camera?
Defecation occurs.
Hello There,
Being in the middle of nowhere (Upstate Pennsylvania), with the closest mall being about an hour away, almost all my shopping for "special" and "hard to find" things takes place online. I easily spend 80 percent of my alloted "mad money" online. If only FedEx and UPS would commit to getting packages here on time. See, if you are in some areas that they deem "remote", they don't honor any type of delivery guarantee.
The most important thing any republican needs to know.
Anyone who thinks Amazon is a high tech company is dreaming. It's nothing more than a catalog retailer like Fingerhut or LL Bean. Jack Welch, ex-CEO of GE even commented on this. Everyone thought that some of these .com's were tech when they were building warehouses to distribute books and CD's like many present day companies. And these same people were calling GE a dinosaur while they were researching the latest in plastics, jet engines and other high tech stuff.
In the crazy times of the last few years Amazon overpaid for the land where the warehouses are based, and for the warehouses themselves. I've heard that they are only at 30% of capacity or so year round except for the holiday season. Instead of being high tech, Amazon has had to master such things as distribution channels and inventory management. Concepts that are decades old and have been perfected by old time competitors suchas Wal Mart.
Then there is the debt. Around $2 billion worth. If Amazon can convert the debt to stock then it would free up tens of millions in free cash flow and really let them invest in the business and grow.
I always thought that online sales would cause a major decline in physical stores. You can move as much merchandise with so many fewer people, store locations, etc. You can offer lower prices, enough to displace shipping.
Of course there will always be a demand for physical retail, but we are seeing lots of retail chains gonig through ahrd times.
Moderation: Put your hand inside the puppet head!
I suppose it could be that there is enough room for a few big e-retailers since the really big ones get free customer awareness since they have more mind share, but those numbers speak to a real difficulty to get a sustainable business online due to low customer loyalty inherent when there is no geographic locality and hence no physical reality to such retailers. It could be that Amazon is merely reaping the high advertising costs in previous quarters and will tank once that mind share that cost so dearly to develop wears off.
personal attacks hurt, especially when deserved
One of my personal frustrations with some Internet shopping is how terribly some sites are put together.
.gif files, or anything that takes away from me *finding what the hell I want to spend my money on*.
In too many cases, it's an event of "I want to buy this - where do I go to find it?" And after wading through too many pages just to figure how how to buy an additional battery for a laptop, when all I should have to do is click on "laptops - maker - model - accessories" I'll finally give up and call my CompUSA (hey, not my choice - my company has an account with them) just to get the job done.
Then I go over the Amazon. And while I complain about the whole "targeted ads" market, I like how they do it. They show new anime titles I might not have heard of, or books that I may be interested in, and occasionally buy when I say "Hm...Niel Gaiman's American Gods - I've been wanting to read it anyway", filter out the ones I tell them I own, and generally make it *easy* to find what I'm looking for. I'll usually check them first even if I don't think they carry it, just in the hopes that maybe they do.
The most important thing any online company can do when selling products: Let me find what I'm looking for. That's all I ask for, and all I expect. I don't want shockwave, or animated
I just can't figure out why so many online stores are dead set on keeping me from buying anything.
Of course, I could be wrong.
52 Weeks, 52 Religions with John Hummel
I must say I'm impressed with a lot of different automobile manufacturing sites, esp. Honda's, for example. They give you an in depth (typically no hype) look at the car from all angles letting you customize the car and see the net effect. Another good car site is Carmax's. The info is always very up to date, the price you get quoted IS the price, you can see the car, buy the car, have the car shipped from one carmax to another, etc. etc. I have never doubted the 'net's ability to be an excellent tool for sales. It's real downfall is the inability to "feel/hold" the product. However, if your clever about how you display and advertise your product, the web seems to be the best medium for buying products that are either unavailable locally or too expensive locally; or, as in Automobile sites, allows you to shop at home and go out more informed on what choices you may make.
I would like some milk from the milkman's wife's tits
>This is something that, alas, computer and
>software companies still haven't learned.
Gateway and Dell is a pretty big difference from Amazon, LL Bean, and pet food. People buy media, books, food, clothes on a monthly basis.
I mean, do you think Dell should send emails saying, "As someone who bought a hard drive in the recent past, you might be interested in our hard drive specials this week!"
Different businesses, different marketing. Then again, you didn't have to think about it because you're Jon Katz, and its been demonstrated that your articles don't have to make sense.
hahahahahahahahaha
oh please stop my diaphragm is going to spasm!
What a textbook list of GPL myths!
It's like a public service message.
You were expecting someone to bite on this?
Amazons profit is a farce....(though it is real, technically)
It utilized creative accounting and the introduction of the euro to make it's European debt deflate.
Is the profit legitamate? Yes. Would it have happened if the Euro had not been introduced? No.
E-commerce still has a steep road to travel.
Jon, I think I finally need to just tell you that need to learn a bit about, oh, say JOURNALISM!
I usually don't touch your articles because frankly, the usually suck. Occasionly you make a good point, but I mostly attribute that to "even a broken clock is right twice a day" syndrome.
If you are going to write articles about online retailing you really need to do a lot more than check out two sites that do it well in your opinion and then make broad unsupported claims about the "software and hardware companies".
Do some actual... oh I don't know, research! One of your sister sites, ThinkGeek does an *excellent* job with their site as does Crucial Memory.
Also, I know you must be an uber-geek and build your own rigs, but even so, you really should check out DELL or the Apple store to see some big name hardware retailers that really do get it.
If you are going to use Slashdot as your personal soapbox, that's fine. Just have something to say rather than just talking out of your ass.
A|Q|U|A
Amazon reported that it had finally turned a profit, something most of us thought we'd never see
I was pretty sure that I personally would see a profit this year, and I was right. Jon - are you projecting?
--
You're reading Managed Agreement.
1. The www has been pruned. A million tiny/rediculous e-tailers have all chapter 11'ed. echeesegratersolutions.com is no more. Consumers' online shopping has become focused.
2. Juggernauts like Amazon.com have weathered the storm and can finally mark up their goods a bit. They got our attention with low prices and cheap delivery, taking enormous losses. Now we're used to Amazon-ing all our Christmas presents and don't mind paying a little extra for it.
The failure of so many dot-coms is not an indication that selling on the Internet is doomed to failure. All that this shows us is that an ill-conceived business won't be made miraculously transformed into a success by simply registering a domain name and putting up a web site.
Look at some of the idiotic failures:
Pet food sold over the Internet. Pet food is normally about 35 cents per can. So people are going to order it over the Internet for the big savings?
The Netpliance i-opener Internet appliance is another great example. They were selling them for $99 and taking about a $300 loss and they intended to make all of that loss back up with subscriber fees to their Internet service. One problem: You could buy the thing and never sign up or decide to stop using it after a few months.
Then there were all of the sites that decided that they would provide expensive, high-bandwidth content for free and support themselves with banner ads. Great idea if you already have a HUGE user base, but pretty dumb if you don't.
Investors may be running scared, but a company with a desirable service or product that is priced attractively (and profitably) is still a good bet. And it doesn't matter if they sell in the mall or on the Internet.
From the article: "The arrogant, customer-abusive tech world could learn a lot from these people, who offer steep discounts, stand behind their products, and actually offer real and free customer support."
...Don't you realize that one of the cost cutting measures Amazon undertook over a year ago was to eliminate telephone customer support. To the contrary of what the article is trying to point out, I don't think it bodes well for ecommerce, when the larger player in the industry says "DO NOT CALL US".
This is the nature of the capitalist system. It adjusts and adapts to profitability, and is essentially agnostic regarding the means. Internet, fax, mail-order, customer service, whatever you need to do to sell your product or service.
When you boil it down, Jon Katz is telling us something that we all know, which is the basic fundamentals of a capitalist market system. Will he next go to the hospital maternity ward and tell us how "An amazing revolution is taking place where humans are reproducing other humans. My worries that the species will go extinct are over!"
Robotiq.com is heavily tested on animals
I thought the internet was a wasteland of pr0n. Damnit, Katz, make up my mind.
Just wait till some crappy band steals your nic.
Doesn't anyone think it's worth mentioning that wall street continues to rely on pro forma earnings reports to euphamize the lack of a real profit?
.. they are unlikely to have a (pro forma) profit in the next few quarters, from what I understand.
Also, as it was already pointed out, the 4th quarter is the most profitable
"Old man yells at systemd"
Some other interesting post-Christmas tidbits are popping up, too
Yeah, at my house they're all the fucking Xmas presents that didn't show up in December.
Sure, a lot of people were skeptical of for example, pets.com, who threw a ton of money into marketing but failed to deliver a decent product. So what this tells us is that the online stores that actually HAVE A LEGIT BUSINESS MODEL can and often flourish. Basic thought must have slipped away from a lot of companies online.
I can see the thinking behind their sites now:
Hmm, people will want to come to our site to browse for clothing. I know, rather than display articles of clothing at a nicely discounted price, let's show them a monkey!
Hey look at the monkey, make the monkey swing!!
btw, if you like our site, or our monkey, here's a way for us to spam you to oblivion with stupid stuff you won't want! Yeah, we are gonna make a profit now!!
Yes, I am slightly exaggerating, but damn, stupid sites won't make money...nough said
Sent from your iPad.
Jon, did you happen to see how big Amazon's debt is? As small a profit as they turned is pretty much nothing considering how far in the whole they are as a company. Kinda of like raving about a "budget surplus" while the country still carries a monsterous deficit.
They have their priorities in the right place. Lower the costs and provide customer service. Other e-tailers (and perhaps retailers) should study them and figure out how to actually lower costs. See what they have done in the last year and that should be the map that all other e-tailers follow.
In my experience, far too many online retailers are shady.
Blar.
Amazon? Profit? It's like there's these words coming out of your mouth, but I don't know what you're saying.
I'm having trouble understanding what the writer is comparing.
.com? Because otherwise, I don't see a valid comparison.
.com implosion was the result of "tech culture", and that the answer to the e-commerce question is to expunge Internet culture from Internet business.
The point, as I understand it, is that Amazon, et. al. are doing well because they have philosophically distanced themselves from the "tech" industry in terms of their treatment of customers.
What?
Could it be that the author made the connection between people like Amazon and people like Symantec because they both ended in
It seems to me that the writer is making the claim that the
Two comments:
One thing Katz didn't mention was the importance of an online retailer having a "brick and mortar" presence. Amazon takes orders for Toys 'R Us and Target. Other stores strongly link their online stores with their B&M chains. For example, Best Buy and Circuit City allow you to return purchases made online. However, Staples treats their online store as if it were a completely different entity. Last I heard, Staples.com was still loosing money hand over fist.
There was one thing Katz got dead on: it's all about women. Men buy stuff, but women shop. Ever go to a department store like Macy's? All of the men's stuff is in one spot in the store. Women's clothing is spread out over different floors. I think you are going to see the successful online retailers try to find out what women want in an online shopping experience and try to make it a reality. If so, returning merchandise is going to be a big thing for women. Obviously, the B&M retailers have an advantage here. Why go through the bother of shipping it back when you could drop it off during your errands?
The arrogant, customer-abusive tech world could learn a lot from these people, who offer steep discounts, stand behind their products, and actually offer real and free customer support.
I usually read Slashdot stories without regard to reading the author first. I thought this was going to actually be an interesting story... up until I read that line.
I've had enough abrasive sigs. Kittens are cute and fuzzy.
Online retailing hasn't come of age because "online" retailing as a separate type of retail business doesn't really exist. Most of the retailing going on is nothing more than another form of catalog retailing. The only real difference is that the retailer's catalog is more widely available. The people who've done well in online retailing are the people who've done well in catalog sales. LL Bean is a good example that. I dunno if Amazon is an example of much of anything other than how to siphon off VC funds.
The interesting field of online commerce to me is that of retailing services online and brokering. Neither of these has really come of age yet. However, Ebay has been an early success in the area of brokering goods and services. Online travel is another success in this area. I mean how many of us actually buy airline tickets through an agent anymore?
Does anyone know where I can get a weather report
for hell? I bet it is cold.
I want my rights back. I was actually using them when our government stole them after 9/11.
[devilish]
Amazon turned a profit?
You know, I knew it was getting a little cold down here, but I never saw this coming.
[/devilish]
Patrick Doyle
I mod down every jackass who puts his moderation policy in his sig. Oh, wait a sec....
I'm king of off topic here (be kind moderators) but I was just wondering: where does everyone buy their computer components online? I check pricewatch all the time, but you can never get good deals on more than one part from the same vendor, so when you add in shipping on each individual piece coming from ten different locations, you're not really saving that much.
do not read this line twice.
In the wake of the dot-com washout, a lot people nearly wrote off cyberspace as a retailing wasteland.
Yes, people are stupid that way just as before they argued, on slim evidence, that online retailing would change everything.
The final Christmas shopping figures for 2001 are not in, but some industry analysts believe the new savvy and sensitivity of online retailers might have rescued the U.S. Christmas shopping season in the wake of September 11, when a lot of people either stayed home or tightened their belts.
Ahhhh, I see, so the same idiots who wanted to predict the future and have been wrong in the past, are now pontificating on how they were wrong (again) and that they have a new prediction. Tell ya what. How about we wait for a few quaters of profitability (nay, a few years) before we start spouting off on how in the future, all work will be done by shiny metal robots before. Until then, I'm not devoting anymore cycles to analysts, futarists, pundits, Jon Katz or any of the other self-important wankers whose parasitic existence distract those of us who actually, ya know, DO THINGS WITH OUR LIVES!
I am not a number! I am a man! And don't you
Try buying very customized and rare computer parts in compusa or bestbuy.... good luck. Niche shopping is online shopping.
A cut and paste of an article from another site, apart from violating their copyright, is not insightful, it's karma whoring.
-- Hulver's site
I have spent well over 2k online in the last year, I didnt even get close to that from the brick and mortar stores, online shopping is the wave of the future, this is only the begining... lets just hope they dont drop the ball
Thanks to file sharing, I purchase more CDs
Thanks to the RIAA, I buy them used...
The arrogant, customer-abusive tech world could learn a lot from these people, who offer steep discounts, stand behind their products, and actually offer real and free customer support.
One of my biggest gripes about many online retailers is the customer support. Katz mentions that at L.L. Bean, you can call them and speak to a human.
But, what about Amazon.com, also mentioned by Katz? I dare you to find a phone number for customer support on their site. Same thing with Buy.com, and I'm sure with many other online retailers. Your only option for customer "support" is through email.
I've had to get orders straightened out with both Amazon and Buy, and it is extremely frustrating to have to type long emails back and forth to somebody to explain a complicated situation, which could be resolved in 30 seconds over the phone. Of course, this "back and forth" is not over a period of minutes, but a period of days.
So, I'll give Katz the "free" part of "real and free" customer support. But, unfortunately, many of my experiences have been unreal, to say the least. I think that Katz's example of L.L. Bean's quality customer support is more rare than he realizes.
E-commerce is just a fancy name for mail order, except with a computer. Sears-Roebuck has been doing the same damn thing for the last 100 years...except you sent them an order form or phoned it in. Now you can use your computer...Big frigging deal! THAT's how you gotta look at "e-commerce"...just glorified bloody mail-order, NOT some sort of "magic bullet" where people will be compelled to throw you money because your site's "pretty" or "clever"...
You're using her as bait, Master!
AMD processors, RAM, sooper fast Video cards, the things I buy some of once every 3 months. Enter stage left. The wife. Spiegel, Sacks Fifth Avenue, Victoria secrets(I havent seen any!), door knobs, pictures, decorations, etc...My wife is on a rampage.
Jon Katz wants tech companies to offer free tech support. Free software + Free tech support = 0 Profits. We can't offer everything for free.
He will be missed
Show me That Smile (The Growing Pains Theme Song):
Show me that smile again.
Ooh show me that smile.
Don't waste another minute on your crying.
We're nowhere near the end.
We're nowhere near.
The best is ready to begin.
As long as we got each other
We got the world
Sitting right in our hands.
Baby rain or shine;
All the time.
We got each other
Sharing the laughter and love.
Alan Thicke's Journal
My Slashdot ads say "
Never tell Katz you can't be quoted - that's one challenge you can be sure he'll take on.
-sk
When buying through the Internet, comparing prices is much easier than when buying in brick-and-mortar(-and-cement) shops. At the same time, as users became more experienced, they discover Price Comparison sites (to find beter prices) and search engines (to find other e-shops) - thus increasing the ability of finding beter prices.
The resulting price erosion decreases the e-shops profits.
In order two compensate for this, e-shops can take one of two paths:
- Reduce costs
- Compete on features - differenciate from the competiotion.
The first path is the one being taken by Amazon - they are trying to use their size to increase efficiency in the package and delivery (ie a small number of big warehouses with efficient - and expensive - automated processes) thus decreasing costs. Since they are competing on prices, prices cannot easily go. On the other end of the scale, it gets increasingly difficult to cut costs (the same rule as in software development applies - the first 10% of investment get you 90% of the improvment). Increasing profits in this situation is thus a difficult task.
The second option is to offer exclusive/improved features than the competition. E-shops have great difficulty in differenciating from the competition in anything other than prices. Site structuring is getting similar, and any e-shop with the necessary basic structure in place (web catalog with search engine) can compete in price with the greatest of the industry. Extra web-based-facilities like costumer reviews are in practice lightly-coupled to the buy - you can easily search books in Amazon, check the costumer reviews, and then go buy it somewhere else.
At the same time, differenciation in more physical properties (like fast deliver and swift costumer service) presents e-shops in a less then ideal light by comparison with traditional shops (the fastest delivery is going to a bricks&mortar shop, buy something an take it home)
In the end this will mostly be good for the consumer:
- The ones that are more interested in spending less money will find cheaper prices.
- The ones more interested in features will be offered all sorts of special (and as of yet unimagined) features by both b&m-shops and e-shops.
Are we there yet? I don't think so!
I ordered a stack of cd-r's from some bargain basement retailer on pricewatch. Usually you have good luck with them
they billed immediately, sent me an email and....
and....
and...
and THEN they finally decided to ship it. I have yet to have problems with UPS or Fedex, but because of these guys sitting on it for a few weeks before they shipped it, my mother got a burner with no blanks for x-mas, and a bashful "sorry" from me.
slightly OT, but uh, if you selling things to americans, SPEAK ENGLISH FLUENTLY or let someone who does answer the phones, PLEASE
for the last time, i didnt do it!
Jon, I usually blow off your comments with a grain of salt because everyone's entitled to an opinion -- but tacking on a comment like this is pretty silly. Who is "us"? Certainly not people who have a clue about Amazon's business plans and how they're executing them.
If you want to say "something I never thought I'd see," fine -- but leave the rest of us out of your opinions.
--CP
Does anybody else have flashbacks to high-school research reports when reading Katz articles? I'd give this one a C minus: valid theme, no thesis.
Guvegrra?
is with companies that think they have to do a complete site redesign every 2-3 months. changing where things are radically instead of better organization. I dont care that Company A just hired a $500,000 a year graphic artist for their website.... The $50.00 clipart CD graphics are fine in my eyes, I want ease of use, full information and ease of purchase, and screw the overdesigned and over changed ideas.
Do not look at laser with remaining good eye.
According to some beyond the usual holiday season spending fest, as mentioned above, Amazon also add to their profits by making money due to the flux of the Europian currencies against the USD in the money markets due to the Euro introduction. So after millions of dollars and several years they still can't create a ligitimate profit. And I am happy because?
Also from my experience internet service has not improved and the interfaces that sites are using to process orders and give service is still generally poor. Unfortunately I do not think that the Darwinian law of Survival of the Fittest really applies to the last tech sector down turn. Unless the fittest means those that still have financing in place. The death rate on the internet may have dropped, but there is still more to come.
They may have a nice web site, but they have a history of not confirming email addresses.
Many a time have I had to go in and change somebody's password to "asshole" and their email address to "postmaster@llbean.com" so I'd stop getting their misdirected email from their unconfirmed signup with a typoed domain. It's another one of the reasons I changed my mailer configuration back to bouncing misdirected mail.
Keep in mind that several BAD companies also turn online retailing into profits as well though. Tiger Direct is downright fraudulent. I had to get two seperate charges reversed before I learned my lesson with them. Bait-and-switch, billed w/o consent for 4th-world replacement, etc. You name it, Tiger will do it.
And good luck with their 800 number. When you call it you're informed that it is now a toll call, and the average wait time is 55 minutes!
------
Today's Top Deals
I have worked both Wal-Mart and Kmart.
When I left Kmart in 1990 we ordered stock by counting goods on the shelf. Those numbers where then entered on a paper sheet that went back to the office where a worker would enter the numbers into the computer...the next day.
Started at Wal-Mart 6 months later. Ordering new stock went like this. Look at the item on the shelf. Is the count less than low stock count set by the department merchandise manager? If so, scan the barcode label. The scanner then wirelessly sends that information to the computer in the office where an order is sent to Bentonville. About a day or two later new stock hits the shelf. Wham, bam, order placed. And their distribution warehouses...damn little stock. Most items go out just as fast as it comes in, the logistics are phenomenal. Lots of conveyer belts with scanners directing stock, leading from supply trucks to Wal-Mart trucks.
The late Sam Walton knew technology was important to stay ahead of the competition.
Kmart never got it. Now haven't they have filed for Chapter 11 protection? Needed to hire some 'puter nerds I guess.
sure .. maybe its a troll comment ..
.. you cant live on a 10% profit margin.
.. before they piss their distributor chains off.
.. sell either at retail .. or sell 'reconditioned - or sub-standard products. [nick ad ding stuff] if we were to sell retail quality stuff discounted .. every single one of our channel sale accounts would drop us .. the two biggest (which im sure almost everyone in here has shopped in .. in most countries too) have it written into their contract.
but PRAISING retailers who deep discount ?
what is he thinking ? why does he THINK that dot.com's went out of business
Only small potatoes retilers can afford to do that for long
Manufacturing companies like the one I work for
--Ne auderis delere orbem rigidum meum, non erravi pernicose!
2. I like going out seeing people, meeting new people
3. I don't want to have to wait a month for them to replace my product, if it doesn't work, I want to beable to go back to the store and return it that day.
online retailing won't replace the real thing the same way television didn't replace the movie theatre. Many people, especially women, like shopping.
Most of us? Hardly. Unlike the dot-bombs, Amazon has always had a solid and well thought out business plan that merely needed time to evolve as the company learned what did and didn't work.
In particular, the one thing Amazon got 100% right from the very beginning (and has no doubt helped them a great deal) was good customer service. I've been buying from them for quite a while, and in my experience in the very few times they make a mistake they handle it perfectly.
Remind me not to invite this guy to my next party. Man what a pooper. Yes, retailing is seasonal.. it seems like a ton of you are just figuring that out this year. So first quater in 2002 won't be as good as the 4th quater last year, but that's ok. If Amazon improves in the 1st quater this year compared to last (which they will) than yes I consider that succesful, and you know what it will get better.
I am so happy -- I thought the next article from Katz was going to be about the plight of the Afghan day traders --- and how the taliban had put the hurt on their ability to get out before the dot coms went south.
(+1 Funny) only if I laugh out loud.
First STFU, Katz post!
Eat it, Jon. You are not interesting.
I'm not knocking your story or anything. But the definition of spam is important. If I buy a product at an online retailer, and thus give away my address, I don't mind them sending me advertisements for things similar to what I've bought in the past. I don't considert that to be spam. It's controlled. It only comes from companies that I've directly done business with. However, if one of the companies SELLS my e-mail address and I start getting advertisements from other companies for similar products, we now have a problem. I've never done business with these companies, and I'm getting unsolicited e-mail from them. That's spam. I don't care whether the products interest me or not. Getting 50 e-mails a day from different companies I've never heard of advertising deep discounts on 100GB hard drives isn't going to please me, no matter how good the discount is.
Having said all of that, I still think any good retailer should include an opt-in box when you're providing them with your e-mail address. That way, they only send you advertisements if you want them.
GreyPoopon
--
Why is it I can write insightful comments but can't come up with a clever signature?
Amazon's likely inability to maintain profit is their own problem and not an indication one way or the other whether online retailing has "come of age" (whatever that means).
There are plenty of us privately-held small companies out here with revenues under 100 million making money consistently even in this economy with online sales - we're just not screaming FOR THE LOVE OF OUR STOCK PRICE LOOK AT US on the cover of (fill in trendy New Economy magazine). We left "dot coms" behind as a benchmark long ago - we were interested in growing a business, not getting a Webby. We do it from small towns you fly over and get no closer to Silicon Valley than changing planes in SFO on our way to meet with a new supplier in Asia. We like Amazon if it gets our customers familiar with the idea of using a website to place an order (and Amazon has our attention and respect by doing many, many things worth emulating in terms of providing service to their customers) - but as far as strategy and finance go, we have much better and suitable models to follow.
Those who have been successful see this medium as simply another another sales channel, a mechanism to reduce expenses (particularly in transactions and support), and the extension of an already successful business model. We did not need 100 million of venture capital, an instant army of programmers, content managers costing half a million dollars, and consultants selling us "solutions". Instead the many silent successful firms grew our online sales channel just as we grew the rest of our business. Small at first, learn and add as necessary.
Catalog companies like LL Bean or Lands End are successful because they have taken advantage of the medium, yes, but also because they already have a super-efficient logistics system in place. That's one reason I'm surprised Wal-Mart is not a bigger online player - distribution and logistics innovations are what made them untouchable in the traditional retail arena.
but those numbers speak to a real difficulty to get a sustainable business online due to low customer loyalty inherent when there is no geographic locality and hence no physical reality to such retailers
Now, I'm just spit-balling here but maybe the problem was that they were one of MANY places trying to sell vitamins / drugs / health items online and the fact that the marginal value of each customer was $10 was a symptom of this rather than the other way around?
It all goes to prove my theory: Shitty businesses eventually fail. Course, that's just me, maybe it really was a wonderful business and not just another me too cash grab.
I am not a number! I am a man! And don't you
As has been noted elsewhere the alleged profit is minimal considering this is _the major_ sales quarter and the alleged profit is a drop in the bucket compared to the total outstanding debt Amazon is carrying. However, what has not been mentioned except in financial geek circles is the fact that the profit is "Pro Forma" which means "smoke and mirrors". The fact is, the alleged profit was created by taking some kind of a one-time bookkeeping trick based on the decline in value of the Euro.
Sears-Roebuck has been doing the same damn thing for the last 100 years...
The Sears Roebuck Catalog also had two unorthodox uses which e-tailers cannot provide:
1) people used to read Sears Roebuck while in the outhouse
2) people used to wipe their ass with it when they were done (no lie!)
Try and do *that* with Amazon.com...
I'm a 2000 man.
Comparing Amazon's 'free' customer support to a tech company's customer suppport is right up there with comparing today's gas station attendant to an auto mechanic. Amazon's support staff is generally tasked with "Where do I find", "I haven't received . ." and "I need to return" as opposed to "I have 30 users getting timed out of our system because of a deadlock on XYZ table", "How can I set up this web app to support double-byte", or "I'm getting a client java.io.IOException; fix it".
BOTH are customer service issues, and BOTH are huge opportunities for a company to shine in the relationship department with their clients. However, neither of them are free. While one may not charge the customer up front for the service, both of them generate overhead in the form of manpower, office space and benefits (remember those?). New concept here: the purpose of a business is to Make Money; not sure, but I think that is why they call it a business. So, if one is not charging for their customer service, chances are good that they are either rolling up the cost into their product prices, averaging the support costs over their entire customer base, OR they are eating it, and will likely be in the red soon. This may not be true in every case, but certainly is when dealing with a staff dedicated to support issues.
Online shopping has its place, like catalog shopping. To be honest, I'd rather catalog shop 'cause catalogs can go places my computer doesn't... like the "reading" room (yeah, I suppose a laptop would work, not a pretty thought though).
However, most people prefer to shop in person. They like to touch the merchandise, maybe even talk to someone about the product. And if they take it home and it doesn't work, they like to be able to drive back to the store and return it.
Returning purchases made online is a mixed bag at best. Sending the item back usually involves a loss on your part. Even if the retailer pays return postage (how many do that?) you still have the hassle of shipping the item.
Another thing that happens when you return a product to a real store is that you typically buy something else there. This doesn't happen online.
Online shopping isn't going away, but IMO it isn't going to grow much larger then it is now.
......as in BS. They use a pro forma accounting method that does not take into account their debt service, their returned merchandise, their unuseable inventory, or their looming debt payments on the horizon (long term notes), or other key accountable factors. Their definition of profit is based on recievables, not cash flow
Use one of the (dying) BSDs, hell, with their license you can claim the OS as your own and sell it along with you software. And you need to get a new lawyer, the one you have is obviously not able to comprehend what he reads, and sure doesn't deserve whatever you're paying him.
Why does everyone watch Amazon.com and Egghead.com and ... I've been happily shopping at Bookpool (they're limited to technical books, but I generally am these days, too ;-) for 4 years now, with no problems to report *ever*. Computers4sure (which has recently been bought by Office Depot, it seems) has filled many of my computer orders during the last 3 years, again with no problems *ever*.
Both have intelligently designed websites, good prices, good availability and, perhaps above all, reasonably priced and quick shipping. Both of these companies have been in business nearly as long (if not as long -- I'm just using my memory) as Amazon, without resorting to the bizarre expansions and gimicks.
Why we should judge online retailing by Amazon.com is beyond me. I suppose one argument is that Amazon sells a wide range of books, whereas Bookpool specializes in a niche market. I bevelive this is a bogus argument: the internet is all about niche markets, and attempts to use it otherwise are stupid. Television is a way to force your message down every person's throats. The internet is a way for people to find what they *want*.
The niche-nature of the internet has been demonstrated many times, perhaps foremost by Katz when releasing "Run to the Mountain" -- if I remember correctly, he even made it into Amazon's top ten for while. Certainly this didn't happen because of anything Amazon did (except to be known as a book seller, which they're leaving behind). It happened because of Katz's niche marketing.
Who cares if Sears fails online? I'll drive to their store and talk to their staff if I don't know which tool I need, but I need it now or want to see it first. If I know what tool I want, or I don't need it now or don't need to see it first, I'll research tools on the web, and then look for an online vendor with good prices and policies. Is Sears likely to be this online vendor? No. When shopping for computer parts, is CompUSA's online service compelling? No -- their prices are sometimes good, but their shipping is horribly slow (their best is "usu. w/in 2 days", as opposed to "orders by 3PST will be shipped same day").
Is Amazon likely to have the best price on technical books while Bookpool is around? No. Amazon seems to be aiming for "online Walmart" status. However, Walmart succeeded because they could keep their prices low and provide a little of everything (though most of nothing) to geographic communities. Online, geography is irrelevant (except when you ship ground, and if warehouses are distributed then even ground shipping can be fast). As a result, finding a sizeable customer base is easier. That means niche retailers can buy bulk and keep their prices down. Furthermore, niche retailers are likely to carry higher quality goods than Walmart and know more about their products than Walmart.
So why would you go to Walmart, unless they're the only store with what you wanted (which is unlikely)? I expect that if Amazon is still around in 10 years, we'll think of them like Walmart or K-Mart, except less convenient than these stores.
-Paul Komarek
amazon has a large amount of cash on hand. they moved this around in the financial markets last quarter, and happened to make quite a killing. if this weren't factored in, they still lost money.
so yes, Amazon.com made money from good business practices, but not from selling coffee table books.
Ok, here is my official reply.
I shop at Amazon. I usually try to shop somewhere else first, but I'm willing to still buy from Amazon. I now refuse to buy from some other retailers on the internet so it says something for Amazon. So they made a little money this Christmas... great for them. I don't think this says anything for their continued viability as a company though. How long is it going to take them to tune their business into a real profit? When they do so, how much debt will they have? I think they're going to lose a lot of money learning lessons and others will steal the things that work for them for free. This is good for e-tailing in general, but a very expensive lesson for Amazon.
LL Bean... I shop there too. I hate their website, but I was a catalog customer before the website. I don't like the issues navigating their website, but I put up with them. Someone else mentioned they just laid off employees and are a private company... so how do you consider them an online retailing success Katz? Frankly, you know nothing about their business and you like their clothes too. C'mon, this all goes back to the research issue I always have with you. You cannot sit down and write these articles in 3 hours. You did the same bullshit with the Black Hawk Down review.
The pet place I know absolutely nothing about.
Now, you seem to take shots at how the 'software and hardware' vendors could do better. Not once in your article do you explain what they're doing wrong or talk about any experiences or any companies specifically. Or anything.. You just seem to have some axe to grind about something, but never really talk about it. It doesn't make any sense to me, and I'm not sure what the point is.
C'mon Katz! You can do it! I have faith in you! Show the Slashdot team what real journalism is! If ANYONE on staff can do it, its you! Go Katz! Go Katz!
Amazon's strength is that they've figured out how to present a user experience that online shoppers like and will come back for. I know that Amazon now provides the Toys R Us store, and probably a few others (Borders, maybe?).
Amazon should outsource their warehouses, and get more bricks and mortars to outsource their ecommerce to them.
-jimbo
XML Tools for Mac OS X
Maybe you should look at the whole not just one company.
Over-generalization sucks. We get customers who are abusive and arrogant. They call and tell us what we should do, instead of just letting us find out what's going on. - A Tech Supporter
Don't try to KNOW everything, just know how to FIND it.
While amazon usually uses pro forma accounting to boost its numbers, this was a GAAP profit, dumbass! Why don't you inform yourself before you spout the same hackneyed bullshit already debunked earlier in the thread?
They are unlikely to have a GAAP profit in the upcoming quarters, but they a pro forma profit is possible. Learn to read the articles before you make such a fool out of yourself, retard.
>> I dont care that Company A just hired a $500,000 a
>> year graphic artist for their website.... The $50.00
>> clipart CD graphics are fine in my eyes.
Actually, when design of a functional product is done properly, you don't notice it. It's a funny thing that many people think it makes it GOOD if it calls attention to itself.
If your intent is to make people notice the design, then a conspicuous design is good. If your intent is for people to USE the service, then a design that calls attention to itself is bad. I've run into so many customers who want an "eye catching background" for their sites. I try to tell them that if you notice it, it stops being a BACKGROUND and becomes a FOREGROUND.
--
So there's nothing wrong with a high paid artist/HCI specialist - but if they do their job properly, you probably won't even notice their work. All you'll know is that you were able to use the site without problems.
- vin
In the wake of the dot-com washout, a lot people nearly wrote off cyberspace as a retailing wasteland
Wait a minute ... wasn't one of those people you?!?
The main problems of online retailing are, first, it's online, and second, it's retail.
The first means that it's inherently insecure. Oh shut up about encryption, I used to work for one of these places, I know how insecure it is. Fact is it's more secure than handing your credit card to a waiter, but it's still pretty close to nil. It also means you'll have to pay for shipping and wait 3 days to get your thing. Impulse buying is out the door then, and most retailers will tell you that's where the bulk of their profit is.
The second factor is that it's retail, which is historically a low margin industry. Plus, in order to make people change their buying habits, the online retailers need to undercut offline competitors prices, not just by a little, but by a LOT, because they need to offset shipping as well.
What this comes out to is: The biggest profit to be made from online retail is in shipping. UPS and FedEx stand to make a mint off online retail, while the online retailers are stuck with low margins and high priced security consultants to assuage the public's fears.
Which is not to say that there's no money to be made in online retail, just that it's not the mountains of dollars that Jeff Bezos says.
So what you're saying is that it's more secure than the vast majority of physical credit card transactions! Who would sign up for that?
Any sufficiently well-organized community is indistinguishable from Government.
Although I agree with most of what you say, I do disagree on some of the finer points.
First, you seem to be saying the only reason to chose one retailer over another is because of price. I suggest there are other factors, including (but not limited to) selection, service, and "brand" loyalty.
Second, impulse buying doesn't have much to do with how long it takes to get the product home. People will still buy things they hadn't originally planned on buying as long as they can browse effectively.
Igor
It's not a typo. Just because it's more secure doesn't mean people percieve it as more secure. And perception is far more important than fact in this instance. It also doesn't mean it's "secure" in the sense that anyone who know how dangerous it was would do it. Yet, people hand their credit cards to waiters and waitresses all the time...
The L.L Bean website was one of the worst designs I have seen in ages. In addition when my girlfriend and I bought online there to have a gift shipped to her parents in Texas as a gift, they actually shipped only 1 of the 2 products we ordered (backorder). However, they never notified us. And we were quite embarassed, as the second gift was to be for her mother's boyfriend. Consequently, he didn't receive anything! And we didn't find out in time to send him something else. If you want cutting edge, there are few if any sites on the internet that can do better than amazon.com. And I hope that's the major reason that they are finally successful, they have an excellent site. A clear second place for me for service and a great site is one here in Canada. Mountain Equipment Co-op doesn't dissapoint, and they offer free shipping, and Canadian prices!
That's good enough.
Am I the only one that remembers Amazon's declaration last year that all our credit card numbers and addresses were their corporate asset?
When that story broke, I logged in and removed all my personal information. I haven't shopped there since.
Maybe they finally turned a profit by selling "their" business asset to a bunch of other retailers or maybe even Russian credit card number blackmailers.
I have some nieces who love American Girl dolls and paraphernalia. Once or twice a year I go on their website to buy stuff for them. Their mother sends me descriptions and even catalog numbers and prices of the stuff they want and even with that information it takes me upwards of an hour to place a simple order. In the meantime I learn more about those dolls than I really wanted to know. Of course I should just use the catalog, and eventually I'll be smart enough to do that. But shouldn't the web be easier and faster than using a catalog? There are sites where that is true, and Amazon is among the best.
what ever, fignuts.
Who is this "Poster" guy and why does he own all of my comments?!?
I really wish there was a button for that...
Amazon provided a new customer interface- one the catalog companies and Walmarts don't get yet. OK, everyone has a catalog on line now. Amazon was the first to do this for books. Amazon has custom ads, based on a customer's buying and surfing habits. Amazon distills its sales patterns - what subgroups are buying, best-seller lists.
I do agree that perhaps they should not have gotten so much into the "bricks" and built warehouses, etc.
Amazon to me competes on features more than anything - wish lists, better user commentary than anywhere else (for most things), targeted ads that actually sometimes provide good suggestions, great shipping (generally very fast and well packed).
A lot of times I can find things I want a bit cheaper elsewhere, but I order from Amazon anyway as I can be pretty sure things will go well and I'll get what I want quickly.
.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
It's easy enough for retailers to offer better customer service than an ISP.
Example ISP call:
'My cable modem isn't working, whenever I try to open a web page, it says it can't find it.'
"Is your computer set to use DHCP?"
'No, I have a cable modem.'
Example retailer call:
'I ordered this blouse from you, and promptly stained it.'
"Cold water wash, ma'am. Use some Woolite if it doesn't come out right away.''But what about..'
"Cold water, ma'am."
- billn
>The arrogant, customer-abusive tech world could >learn a lot from these people, who offer steep >discounts, stand behind their products, and >actually offer real and free customer support.
Would they send me a patch?
___
It's the end of my comment as I know it and I feel fine.
Jon, while I agree that this is great, I must point out that nearly every online retailer offers these different shipping choices. It's not at all just a feature of these two sites.
It makes me wonder if you've even fulfilled many orders that you may have placed online at various e-merchants. And if you haven't, how is that that you believe you can convince us that you know what you're talking about when you write an essay about online retailing and order fulfillment from the customer's perspective?
Whether or not the profit was "real" is more or less a moot point. Amazon's got the name recognition needed to stay afloat for a little while even while bleeding cash. I'll be the first to admit that I didn't think Amazon.com would ever profit by even the most arcane of maths. The first-quarter profit is therefore an important landmark for the company, but is not necessarily, as they say, "indicative of future results."
Your assertion that "Online retailing has not come of age" is a gross generalization. "Retail" encompasses a vast economic area. Certainly some computer company stores (Dell, Apple) have been profitable on the web, as well as some tech-oriented resellers. On the other hand, take the example of online grocers. These gleefully came about during the glory days of the "web bubble", but never made sense to the consumer. Whether or not it has "come of age", the web makes good sense for some trade, and certain quarters make visionary (but risky) investments.
In Amazon's specific case, I think the company's own ambition was simultaneously its greatest asset and liability. Bezos pushed that thing to where it is on sheer willpower, but as the company expanded far beyond books, it took on greater and greater expense. The convenience, potential market, and low inital overhead of Amazon's brand of online shopping put it in a much safer position than traditional catalog retailers. If it sinks, it will be because of putting vision before focus.
Two cock in my pussy! It feel so good!
I found Thompson's Computer Warehouse Outlet when I was living (without a car) in the country and looking for an alternative to the (extremely sleazy) local computer retailer. If you're not looking for bleeding-edge hardware, they're great. And they don't require customers to set up accounts.
Two drawbacks- They don't carry real modems (I had to buy an external one locally) and they don't carry printers or printer supplies.
Jon is arranging an "Ask Slashdot" with Junis. So how fake can he possibly be? Negotiations were begun in November so that Q&A should be along any time now.
Given today's 250-point drop in the Dow, Katz's effort to revive irrational exuberance thanks to the slight shift of sheckels from brick and mortar to the web is a valiant effort. You ungrateful son of a bitch.
National CyberCrime Prevention Foundation
I'll bet if you mentioned that to Katz, he might put a rush on that Junis "ask Slashdot" that he promised us.
National CyberCrime Prevention Foundation
Jeff Bates, executive editor of Slashdot.org, said that he had no reason to doubt the report and that he was aware that Mr. Katz had known Junis for a long time. "I know that Jon has reason to trust him if nothing else," he said.
Mr. Katz said Junis had agreed to take part in a public question-and- answer session on Slashdot.org soon, once things settle down a bit in Afghanistan.
Katz's Deserved Embarassment and Humiliation, set in NY Times Roman
I survived the Dick Cheney Presidency 7 to 9 AM 7-21-07
This guy comments that he doesn't like the article/author in way that doesn't spell it out in intricate detail and some moderator who doesn't understand what he/she is moderating marks it as "offtopic".
Does a guy have to use sixth grade schoolyard language to get any respect around here?
This has happened me before also and it really irks me when people moderate before they think.
blah, blah, blah.