Internet Marketing and Digital Strategy Blog
Business
Online Retailing and Strategy
Oct 2nd
Interesting experience in recent days. I decided to by a heart rate monitor, the Polar I had needed a new strap which cost just about as much as the latest model, note the old Polar was bought in around 2003. Anyway one thing led to another and before i knew it I was looking at GPS + HRM in the likes of Garmin and Suunto as well as Polar. To cut a long story short I eventually bought the Garmin 610 and hopefully this will help me on my ongoing road to fitness, thinness and all round healthiness. I will save that for another post.
Online v Offline Pricing
Firstly, finding stores that sell these (offline) in Australia is hard other than for Rebel Sport. Please get optimised or into local search…
So for comparison here are some of the offline and online prices I found:
Polar RS 300X from the thepolarshop.com.au for $139. I found these guys were the exception, most would sell this model for around $189 odd.
Polar RS300X from from Rebel Sport in Top Ryde priced at $249. I note that on Friday the price was the same online and today it is $189 in line with above.
Garmin Forerunner 305 with HRM from GPS R US are $190 and a colleague had ordered from this site and vouched for it.
The same Garmin 305 with HRM from Rebel Sport is $349.99 as at writing this post.
I love Rebel Sport and to be fair ended up buying the Garmin Forerunner 610 as it has the swipe screen and the kind gentlemen who helped me at Rebel Sport got me a 10% discount which on this model matched the online price at GPS R US who I used as my benchmark. The point I wanted to make was twofold from my purchase journey:
- The HRM manufacturers are starting to avoid local pricing by prohibiting retailers from sending product overseas, apparently Suunto has already done this per the salesmen and thus we will continue to get screwed as long as we have a strong dollar and things are cheaper overseas.
- The other common story I had was that the retailer will beat another bricks and mortar stores by 10% but not an online price. So I can see they have the benefit of giving you the product there and then versus a 24 hour wait or more, but really the product is the same offline or online, how can you ignore the online price, are retailers sticking their heads in the sand? In denial that people are actually buying online?
I also happened to be chatting to my wife’s hair dresser who sells a professional range of hair products including GHD and he said most customers might like to see the product but many said they would buy online. A not uncommon story around many products at the moment. His conundrum being should he be cheaper if you buy his products online? If he was he would have to tell customers. If he did he might as well charge the same prices in store, and in fact this was easier anyway as then he didn’t have to pack the item and arrange/ pay for posting. But the customer expectation is that it should be cheaper online.
So what is an effective online retail stratgy?
Well the answer is, you need to find it, by testing, asking your customers and finding the model that suits your customer segments well. I mention segments as not all customers will be web savvy, those with kids may be time poor, spending preferences will differ and so on. You will also need to be competitive pricewise, as you can say I’m not prepared to discount, or we sell a premium product and thats fine, just watch your customers take your advice and walk out the door, or ensure you have a reasonable value proposition and that your offline and online retail experience match up. Maybe in the long term, brands might have a flagship store to allow customers to look and fell but understand they will buy online and reward the channel accordingly. Retail becomes globalised indeed.
This was not meant to be a rant about online retail strategy, rather just an interesting experience as to how offline retailers almost dont see themselves as competing with online retailers, I think to their own detriment in the long term. If you have read the Innovators Dilemma, you would also think, the online retail area should be separate to the offline to survive and compete. Online might cannibalise some sales but in the long term it will most likely save your bacon. Me thinks maybe there are too many managers with lots of offline retail experience applying this on online.
The CEO Institute
Jan 22nd
Th CEO Institute Big Day Out
Had the pleasure of attending the CEO Institute annual get together on Thursday in Sydney, an excellent day indeed.
First up was Saul Estlake, his key points on the economy included:
- Expect more sovereign debt crisis in Europe
- The Floods may cause -ve GDP growth in March
- The Floods will help drive further growth in quarters that follow
- House prices should hold due to low unemployment and housing shortages
- The Australian economy now correlates more with the Chinese economy
- Australia is in a strong position the key challenge is now managing this prosperity
- Reserve bank expects growth with concern around labour and price expectations
- Should have dollar parity for at least 12 months
- Productivity remains a problem and is going backwards
- Expect interest rates to continue to rise
Next followed a panel discussions moderated very well by Ellen Fanning. The panel included Paul Cave (Bridgeclimb fame), Graham Bradley (Various Boards and Perpetual Trustees), Carla Zampatti and Kevin Rodney (HP). A great of mix of professional managers and entrepreneurs, from Graham Bradley concerned about risk and shareholder returns to Paul Cave, a true entrepreneur, driven by growth and new business models. Key points from this forum included the following:
- Entrepreneurs are not good managers and need to now when to move on
- In business, sometimes its better not to know.
(Paul Cave talking about the fact that it took him 9 years to get permission to climb the bridge) - Good people know that they don’t know it all and must know when to reach out
- Hard to find growth where there is no leverage, competitive advantage or innovation
- Deal with failure quickly
- Diversity, cashflows from different businesses reduce the impact of downturns
- Managers require decisiveness, being able to relate to people and communicate, humility, clarity of mind and direction and being able to paint this picture for others and motivate them toward this
- Competition never gets less, pressure on spending never goes away
- Set your direction and show conviction
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Guy Rosso, the ex MD of McDonalds, apparently he worked there for 33 years, which means he started when he was 14. Quite a career, and now the MD of Kmart, part of Wesfarmers and also involved with Half the Sky Foundation in China which looks after orphaned kids. Hope I got all that right.
This was by far the most interesting and inspiring talk of the day. Guy is a humble, down to earth man, who is no doubt very smart and focussed when it comes to business. From the talk:
- Came into retailing with no retail experience
- Brief was “fix it” and “returns to shareholders”
- Many established ways of doing things in the business
- Low trust from customers due to discounting practices
- Stores were in a poor state
- Had had 4 CEO’s in 10 years
Spent the first 100 days listening and asking “Why?” Then chose his team from internal people.
Then modeled the business around the 6 P’s (Price, Profit, Product and Promotion) as well as 2 extra being Place and Customer. They then made a list of everything to do and prioritised the top 10 worth things they were doing and each had to fit under one of these. Always only had 10 things on the list and gt these done.
The outcomes were significant changes to the business, which was complex. Guy talked a lot about keeping things simple and the fact that he was a simple guy (no pun intended) Examples included reducing SKU’s removing certain brands, changing pricing strategy, supply chain, pricing etc etc. I wont go into detail, not sure how much of that should be in the public domain, but fascinating stuff.
Listening to this, there must have been some hard decisions made, which Guy could not have relied on past experience as to whether they were the right decisions. I asked him the question as to how he made these decisions and his answer was to keep on asking ”why?”. Why do we do this, why that and changing the model using I assume his past business experience and common sense. He mentioned a process of decision making, rather than 1 big decision.
Kmart now stands for families with the quality you would expect for the lowest possible price. Guy has also tried to ensure Kmart becomes true to the customer, giving them the lowest price, not trying to price high and then discount the items. Truthful to customers on price and product.
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Interesting lunchtime chat with Geoff Huegill and how he has turned his life around. One thing, business men know about business, they are interested in the sports side and the challenges, this is what is interesting, Geoff tried to relate to the business side too much at times, when I think people wanted to hear more about his challenges than his business acumen, Interesting talk, great comeback. Good luck at the Olympics.
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Excellent and informative day, thank you to the CEO Institute and Yvonne Howie and her team.
The Ipad after 1 week
Jun 5th
The Ipad has survived its first week in the house. Some facts and findings you may, or may not find interesting, but here they are:
- A single Mobileme account can support both your Iphone and Ipad, set it up in your Ipad then on Mobileme. Got to add an account in settings in the Ipad, then let Mobileme find the Ipad at mobileme.com/find
- Entourage is still the worst email system and will not properly integrate with Mobileme but Office 2011 for the Mac is apparently due in June 2010 with Outlook and which should rectify this
- Turning the Ipad to sideway gives a different and in most cases better working experience when using the Ipad and different functionality. Use the switch above the volume to lock this
- It does not and never will replace your laptop
- Most of the Ipad Apps used and tested so far are slow. Please optimise these, including the Australian newspaper app. Apparently it was done in a short timeframe. It shows and right now with advertising I don’t think is worth the money. Better checking out SMH or News.com in the Safari browser
- People on the bus read over your shoulder. Please everyone buy an Ipad so people will stop looking at you like you are a complete tosser when you pull it out
- Accessories are ludicrously expensive, Ali Baba would be embarrassed by the prices being charged
- Still no epiphany, waiting….
- Had some difficulties setting up pre paid wireless on some of the units, getting through to the Telco is a nightmare
- Otherwise, still a great device. Not too much buyers remorse. Easy, portable and accessible. For those who can work out what the hell to use it for there will be a massive updtake
- Multitasking will be good when released. This us limiting, especially on the Ipad
- No Facebook Ipad app yet
Short and sweet.
Does anyone know any good Ipad App review sites, most seem to be focused still on the Iphone.
The IPAD is in the house
May 30th
After all the hype, I have an Ipad and have not beat it with a baseball bat or microwaved it. I preordered an Apple Ipad online expecting weeks of stalking the Apple store and significant scarcity, only to find I could walk straight into the Apple store and buy one on Friday afternoon and then cancel my preorder which was due for delivery sometime in June. In fact I think I have one prior to many folk who pre ordered their Ipads for the 28th may and still have not received them due to TNT being “overwhelmed”, What, no one told them they would have to deliver 7,800 Ipads in one day? I just feel sorry for the poor kid who had been waiting 2 months for his Mecano set and the sceduled delivery was Friday.
I then also purchased a second Ipad on Saturday morning on behalf of a friend from JB Hi Fi in Chatswood after discovering not all JB Hi Fi’s are equal and that the inner west of Sydney was not considered an Ipad buying belt. I was in relatively early due to kids and by 11:030 had some hurried looking guys my age asking me where I had bought them, as the Apple Store, David Jones and Myer were all out of stock. I did’nt mention the big yellow JB Hi logo on the plastic bag I was holding and merilly sent them off to, yes JB Hi Fi, they were in a rush and almost started running as I mentioned the name. Crazy. I was tempted to send them to Babies Galore but was worried they would come back and find me.
The Sydney Apple Store
The Apple store buying experience is also carefully engineered to keep as many people lined up on the street for as long as possible, while there is actually plenty of room inside. So keep your customers cold and behind barriers seems to be the motto. As someone who has a day job and who has to dress is business wear and who has a lot on, the thought of standing in a cue with buskers and fluffers is not appealing. But then I thought, who is actually going to by this thing? Students? People with no jobs who can spend the day in the cue? They must be a lot wealthier these days. Definite mismatch in the experience. Anyway I was fortunate to be on my way back from a meeting and see a lull in the cue, in fact there was no cue, I walked straight in and out. Had I known David Jones or JB Hi Fi would also have been an option. Must mention that in the 5 minutes I was inside, a cue had formed again, unreal.
Anyway I have Ipad and am still waiting for the great epiphany. Nothing has happened, other than me becoming more anti social. Hopefully the lightning bolt of change and hope for all mankind will strike soon so I can realise there is justice in the world and that the Ipad is magical and revolutionary.
Ipad, some details you won’t in the user guide
After that rant, I must say it is a pretty cool device. Some things I would like to have known for the set up include:
- On first connection to Itunes, if you have an Iphone it will think you should have a sim card installed and will not let you do anything. Restart Itunes, connect, disconnect, ensure your Ipad is turned on and you will be on your way. Also ensure you have the latest Itunes software installed. No sim card is required to connect to Itunes with the 3G Ipad. Maybe this is obvious but it is not explicitly mentioned anywhere in the user guide.
- The Iphone apps, while they may work, render in a smaller resolution. You can upsize them to 2X, but they look blurred on the larger screen, so you will need to buy or download Ipad apps, of just use your iphone for some of them. It’s not great with a large screen and a little Iphone size screen of data in the middle.
- The email and other similar listings work differently to the Iphone in what I think is a less efficient manner. There is always an email open, but you have a new drop down menu to use, May take some time to get used to. Was not natural after using the Iphone. So for example if you sync your notes and open the notes app, it looks empty until you click on the little notes button at the top then the list of all your notes drops down. Could not also find a setting to change this.
- Finding the Mobileme settings aint easy, in fact I still haven’t found them, maybe its just me
- The Apps from your Iphone will load onto the Ipad but with no settings, of course. So every feed, URL etc will need to be reloaded. Set aside an hour or so depending on your apps to reload and set up everything. I just hope it does not crash and lasts for 20 years, it is a pain.
- It comes with a charger for the wall socket, not just USB charger. I would recommend the dock as well, so it stands upright. Can then also be used a photo frame.
- Movies are awesome to watch. $25 from the Itunes store for a movie is however ludicrous. In fact there is not much fro free in the Itunes store these days. Not like the good old days.
- Ipad apps are much more expensive and fewer, so if you want a paid app on both, you will need the Ipad version to render properly, and you will need to buy it again
- The sim cards are only available on prepaid, unless you in certain cases you are a business user. So while there is a lot of noise around this for that data, it is a circus to get a post paid sim unless you have an account and with certain providers are a business. Prepaid may well be better anyway. Telstra offer an extra 2GB free with their $30 for 1GB free is you activate before 30th June, but be aware the data only lasts 30 days and the sim around 6 months without activation. Welcome to more little monthly payments.
Other than that it is a big ass Iphone. Very neat, nice screen, heavier than I imagined. The plastic buttons on the side are a bit tacky compared to the Iphone and look budget.
I intend to use the Ipad for work, so no kids Apps on this one. As I work in an ever changing technical environment being on top of all changes continuously is critical. I belive the Ipad is going to be a big help here, given screen size and portability, allowing me to get access to updates, tools, website monitoring and other data quickly and easily.
I think there is a big “want it” factor but many will find this a useful tool, especially those of us who work online. Many niche business apps are also appearing for certain industries like estate agents and tradesman. Well done Apple, like your work.