Is Amazon Working on Same-Day Delivery?

Bricks-and-mortar retailers have battled long and hard over the sales-tax advantage that online vendors have, particularly Amazon. Customers are supposed to pay sales tax on all purchased items, but few actually do, providing a significant price advantage for online services.

Merchants say if Amazon had to pay local sales taxes like they do, consumers would see online prices more on par with their own physical-store prices. Amazon appears to now agree as it is dropping its tooth-and-nail fight against every sales tax initiative in favor of negotiating agreements to build warehouses in large metropolitan areas.

It’s a change in strategy that could help Amazon accomplish what some believe is its new goal: providing same-day delivery for many of the products it sells. That may be a necessary change considering a Citigroup survey found 52% of Amazon shoppers would be less likely to buy goods on the site if they had to pay sales tax.

Whatever the reason, Amazon is putting a lot of money behind the project. The company will reportedly spend more that $1.2 billion on distribution facilities in California, Indiana, New Jersey, Tennessee, Texas, and Virginia, with $500 million for as many as 10 locations in California alone. That should be enough centers to provide next-day service for nearly all of the continental United States.

Along with new facilities, Amazon has been working on ways to improve shipping times at the facilities it already has. It acquired Kiva Systems, which developed a robotic warehouse system, and set up automated lockers in drugstores and convenience stores in Seattle, New York, and the United Kingdom. It also works with local couriers capable of same-day delivery when the product is available that quickly.

“Amazon is investing billions to make next-day delivery standard, and same-day delivery an option for a lot of customers,” technology writer Farhad Manjoo said in this Slate article. “If it can pull that off, the company will permanently alter who we shop. To put it more bluntly: Physical retailers will be hosed.”

TIPS on Promoting Digital Course Materials

This article is very relevant for campus stores if they are thinking of how to improve digital course materials sales.  The story is about Indie bookstores but the lessons are apropos to college stores as well.

Basically, the article recommends a multifaceted approach when it comes to promoting digital.  You should feature them in general and targeted electronic and print newsletters, advertise online and in-store, train staff, and “just be relentless.”

Some propose having at least one dedicated e-book answer guru and distributing their e-mail contact information to customers.   Campus stores can also do this so that there is one digital content reference expert in your store.  This person can set up regularly scheduled “Digital Therapy” classes for faculty and students where people can share their experiences and ask questions and discuss digital delivery and e-readers.

If you are planning an out-right digital “Go Digital” marketing campaign, the article suggests utilizing website promotions, e-newsletters with a “download the e-book” button, social media, QR codes on shelf-talkers, special events, and in-store signage.   To get the conversation started, one bookstore has bookmarks with big letter: ‘WE SELL E-BOOKS.”

The message from your actions will lead to faculty and staff awareness that the campus store can meet their e-book and digital course material needs.

Infomercial and Web Retailing

Great article by Mashable Business if you are into new marketing practices.  There’s a new trend to integrate content with product offerings on the web, according to the article.  Content can range from editorials to videos all intended to provide value-added shopping experience for the consumer.  Some include infomercial like videos and others are in-depth articles on how to do certain things.

So, if you are shopping for a tie, you can learn about the right tie knot for your color shirt. Or, if you are looking to buy bed sheets you can learn about how to fold fitted sheets.  The content offering is producing repeat visits and giving consumers confidence to make purchases according one CEO whose company is using this technique.

Must Read for Marketing on Facebook

A recent white paper by BulbStorm discusses 10 myths and misconceptions about marketing on Facebook.   Matt Simpson, developer of Facebook apps suggests asking the following questions before launching your Facebook marketing campaign. 

• Am I seeking virality? If the premise of your promotion is to go viral, it’s a huge red flag. That’s not to say that a creative concept and well-built technology won’t drive organic growth. But don’t expect to spam the news feed and get away with it.
• Am I using Facebook functionality? Be careful here! Do not ask fans to post, like or comment on content on your wall or photo albums. Do not use “like” buttons as a voting mechanism. You must run your promotion through a third-party application.
• Am I collecting contact information? At the end of your campaign, you’ll have to contact your winners to distribute prizes. Remember to collect their contact info in your promotion app, because you cannot contact them through Facebook.

Recent Poll Suggests Consumers are Getting Daily Deals Fatigue

Once thought of as a novelty in E-Commerce, there appears to be a trend suggesting that fatigue is settling in on daily deals. Consumers were asked whether they are tuning out of daily deal sites and 36% said yes, to a large degree, 43% said yes, to a moderate degree, and only 4% said no.

Here are some quotes from the study report:

“Consumers may love those deep discounts but they'll never respect the retailers in the morning. There are a lot of ways to build loyalty but buying it isn't one of them.”
Ryan Mathews, Founder, ceo, Black Monk Consulting

“Value is a shopper concept that extends far beyond the price. “
Anne Howe, Founder, Anne Howe Associates

“It's time for retailers to think of something other than price (quality? design?) to differentiate because, ok, we get it, you're cheap! What else makes you better?”
Lee Peterson, EVP Creative Services, WD Partners

At the end of the proverbial day, customers want to buy what they want to buy (more or less), not what companies are trying to sell them. This model might work better if there was more discretionary spending. (Then again if there was more discretionary spending, people wouldn't flock to deal sites in the first place.) All in all, the electronic deal business may turn out to be largely a flash in the pan.”

Fabien Tiburce, President, Compliantia, Retail Audits & Task Management

CAMEX questions answered: marketing

This week's question provides a good example from a store of "why digital," the importance of relationships, market share orientation, and other topics:

Q. We have had good relationships with our publishers and faculty in crossing the digital divide hand in hand. We have come to find that the MyLab products and other digital content have helped secure market share and lower prices at the same time. We even have created displays to highlight those ebook products to our students. [Example provided with data on sell-through, savings for students, and percent of market share captured]. Has NACS looked at in-store merchandising, loss prevention, and in-store promotion material for publisher's ebook options?

Thanks for your question. It sounds like you have started off in the right direction -- building positive relationships, paying attention to market share in addition to margins, and thinking about how to merchandise digital products as something different from traditional products.

To answer your direct question, yes, we have thought about some of these questions. In particular the in-store merchandising and in-store promotion materials. In fact, we convened a short-term task force who helped us develop a first phase marketing toolkit for stores. That toolkit was about 85-90% complete, but then stalled with the departure of the key staff person who managed the project. It is our intention to resurrect that project later this year as the task force did some excellent work and we do not want that information to be lost or go unshared with stores.

We have observed that the stores who report higher sell-through on digital content are typically the ones who provide more transactional education to students about what they are buying when they buy the digital option. Students know what they are getting when they get the physical printed textbook. The same is often not the case with digital. Different DRM, different licensing terms, different user experience, and other differences between products in the same category make it a more complex (and potentially less satisfying) purchasing decision.

I saw a statistic earlier this week that reported consumers weigh trust as nearly 10x more important than price when making an online purchasing decision. The same is true, in a sense, with digital. Students are not as sure of what they are buying (they trust the product less) and so are more reticent to purchase. Stores that have recognized this challenge and provided educational information have seen sell-through on digital sometimes up to double the typical average. This educational information can be displayed in a number of ways -- whether comparison details on an in-store sign or terminal, explanatory information provided along with the student course list, or creating a "demo-bar" concept to let students "see what they are buying."

Because of differences among products, the transaction cost of selling digital is higher for retailers because it requires more education of the consumer. Focus your in-store marketing efforts in that direction and you should see some success. Beyond that, our marketing toolkit initiative looked at a variety of methods to promote digital options in-store, and again, we hope to get those resources out to stores later this year.

A final quick note -- the question also asked about loss prevention. This is not an area we have looked at closely as it relates to digital options. Perhaps some of the other readers on this list have some suggestions to share -- either marketing ideas or ideas for loss prevention.