newsonaut
Turning inner space into outer space
Saturday, July 25, 2015
Amazon could wind up turning Walmart into a dinosaur
It wasn’t that long ago that big box stores were the ones shaking up local economies. Low prices and a wide selection made it hard for smaller stores to compete. Downtowns in some small communities practically died out.
Even bigger department stores are struggling as the middle class shrinks and looks for better deals to maintain its standard of living.
But now Walmart, the 900-pound gorilla of big boxes, is the one looking over its shoulder as Amazon — after years of building — is finally coming into its own. Last week, investors voted with their money for the online merchant and pushed its market value above that of Walmart for the first time.
Amazon’s revenue is still nowhere near Walmart’s, but annual sales growth has easily been outpacing it. Ironically, Amazon is beating Walmart at its own game with lower prices and a wider selection of products. On top of that, they offer fast service and convenience.
CEO Jeff Bezos has been patient since Amazon was born back in 1999, ploughing revenues and profits back into the company to ensure it continued to grow. In the future, Walmart may be left behind with the real competition coming from other e-commerce outlets such as Alibaba — a big name in Asia that is making inroads here in North America.
There’s no doubt that Amazon, Alibaba and others are making it harder for bricks-and-mortar stores — even giants like Walmart — to compete. There has been a spate of retailers announcing store closures lately. And Amazon long ago made it impossible for all but the largest bookstores to stay open.
This of course has a wider impact on local economies. As stores shut down or cut wages and jobs to stay afloat, the employees who are left have less to spend and increasingly turn to the Internet to save money. The downward spiral continues.
There are some stores that should always be viable. It’s hard to imagine people buying a lot of food online, for example. Appliances and furniture are awkward to purchase on the Internet, but it’s not unheard of.
If you can afford it, you might want to think about shopping at local stores that offer good service even if it comes at a higher price. Those places are owned by people who have a stake in the community. For Jeff Bezos, the place where you live is just a dot on the map.
∗ ∗ ∗
I hate to be a downer, so here’s a video explaining how Amazon really became a bigger company that Walmart.
∗ ∗ ∗
Update: Looks like I was wrong about food stores being safe. Amazon has plans to allow you to order groceries online, then pick them up at drive-up stores. Aside form convenience, the groceries will no doubt be cheap.
Amazon is going to have to muster all the innovation it can find: another competitor, promising even lower prices, has opened in the U.S. Jet.com asks for a yearly membership fee, like Costco, but promises to find the lowest price on whatever you want, and even tells you how much cheaper it is than what you would get at Amazon.
More posts in the Economy category
Saturday, February 14, 2015
Freedom from ads poses a new challenge for marketing types
Remember the old song Born Free? One of the lines goes like this: “Born free to follow your heart.”
Schlocky, yes, but I can’t help think of it as I move toward what is increasingly an ad-free existence. Because without advertising, I’m free to follow my own desires — as opposed to being manipulated by advertisers.
As usual, the Internet is to blame. Newspapers are overflowing with ads, but I don’t read them any more so that’s one source gone. I cut the cable and learned to be happy with Netflix, so I no longer have batches of TV ads coming at me every 10 minutes. For music, I find that apps like Songza have genres for every taste and occasion, so I no longer have to listen to pitches that ruin the mood on radio.
The Internet itself has ads, of course, but that same technology also provides ways of avoiding them. You can get ad blocking extensions for your web browser. On my iPhone, an RSS app called Reeder includes a function called Readability. Tap the icon and you get the full article in plain, ad-free text. Twitter now has advertising, but only if you use their site or app. Use a third-party app like Tweetbot and they’re gone. There are lots of tricks like this — you’ve probably picked up a few yourself.
This is great for people like me, but bad for marketing types who want us to buy their service or product. For them I have two words: “Super Bowl.” The ads during the NFL championship are so popular that people who aren’t interested in football will watch the game just to see them. Viewers vote the next day on which were the best.
So my question is this: why not make advertising this compelling year-round? I suppose it might seem less special and lose some of its impact. It would also cost more. Still, if you have ads that people actually enjoy watching, you’ve got to be further ahead.
In fact, I can imagine a time when advertising becomes a separate entity. It would no longer interrupt TV shows or squeeze newspaper articles into tiny spaces. The ads would have their own TV stations, their own publications, their own apps. People would be drawn to them by the creativity that goes into them. This happens to a certain extent now, but there may come a time when it’s expected and even appreciated.
I see a glimmer of this trend with new websites like Apple World Today. They’re asking readers to support them with a system called Patreon. Their goal is to have readers sign up as patrons so they won’t need ads.
Here’s how they put it:
We really want to avoid traditional web advertising like the plague. We will have direct sponsorships and deals, but no obtrusive and … dare we say it … annoying ads for mortgage help or feminine hygiene products. However, that’s what we may have resort to if you, gentle reader, don’t step up to the plate.
As I write this, they have 185 patrons paying $1,145.49 a month. That’s a long way from the $9,000 a month they have set as their goal, but these are still early days.
Meanwhile, I can hear the lyrics to Born Free swelling up again:
Ad-free and life is worth living
But only worth living
’Cause you’re ad-free
More posts in the Economy category
Sunday, July 6, 2014
Those fun quizzes are actually data miners for marketing
Marketers love to get consumers to fill out surveys, but it’s really tough to get us to do that. I filled one out recently, but only because an iPad mini was being offered as a prize.
So . . . what if instead of surveys, they were clever quizzes. Well, we’re all over that.
I see links to quizzes on Facebook (mostly from Buzzfeed) all the time. They usually start off with a comment from your friend about what the result was for them. “My decade with the ’60s!” “If I were a dog, I’d be a collie!” “I should be living in Holland!”
And if your friend took the quiz, then why not join in the fun and compare notes. “Turns out I’m a collie, too!”
Buzzfeed’s most popular quiz, What State Do You Actually Belong In?, has racked up more than 40 million views. It’s been shared almost four million times on Facebook. In that quiz, people willingly give their favourite fast food chain and their favourite TV show, among other things. Marketers would give their right arm for this kind of data.
Marketplace has an interview with Aram Sinnreich, a media professor at Rutgers University, who has this to say:
It is a tool for advertisers to understand us better masquerading as a tool for us to understand ourselves better. Instead of reluctantly agreeing to give marketers information about ourselves, we are emphatically proclaiming to marketers who we are and then demanding that our friends do the same.
Buzzfeed managing editorial director Summer Anne Burton is quoted as saying that the site is “looking at how to use the things we’ve learned for companies’ benefit.”
An HBO-sponsored quiz about Game of Throne, for example, received a million hits, and provided valuable consumer information such as preferred alcohol and greatest fears.
In an article at the New York Observer, though, a Buzzfeed spokesperson denies collecting or selling individual answers.
“We’re not in the business of selling data. We’re in the business of selling social advertising.”
They say the only data being collected is whether the quiz was completed and an aggregate of the final results.
Buzzfeed may not be selling individual answers now, but how long will it be before they give in to the temptation? I’m guessing not long.
Sinnreich says the popularity of quizzes will eventually fade, but they’ve established a premise that can be used in other ways.
“Expect more tools that make giving information about ourselves seem like a game.”
Credit: The graphic above is from the quiz, What State Do You Actually Belong In, from Buzzfeed.
More posts in the Economy category
Saturday, May 31, 2014
Grow your business by getting to know your customers
If you’re hoping to expand your business, one of the most important things you can do is communicate with customers. Let them tell you what you’re doing right or wrong so you can make changes to make them happy — and they pull out their credit cards more often.
During a recent talk at Thompson Rivers University, sponsored by Kamloops Innovation, Lars Lofgren, Growth Manager at KISSmetrics, pointed out that it’s important to get to know what potential customers are thinking before you even start a business.
KISSmetrics is a competitor to Google Analytics, offering insight into data collected from visitors to websites offering a product or service.
Lofgren said if you want to know whether your product is good enough to build a business on, you should ask 500 people this question: How would you feel if you could no longer use my product? 1. Very disappointed. 2. Somewhat disappointed. 3. Not disappointed. Your goal is to have 40 per cent respond that they would be very disappointed.
If the numbers aren’t where you want them, you can use surveys that focus on making things better for those who would be somewhat disappointed.
Surveys should try to get at people’s feelings. What is the primary benefit of the product? How could it be improved? How would you describe it? Send the survey to 500 people and hope to get responses from 50. Categorize the responses.
You want to learn the major benefits they find, the major problems they run into and the their perception of the product. Take the feedback from the somewhat disappointed group and give them more of what they want.
Other tips: Expect a 10-per-cent response; only ask questions that you need; don’t exceed 10 questions; start with an open response; categorize responses to see trends.
Lofgren said feedback forms at the bottom of every page of your website are also a good idea. They can be set up so that clicking on a question expands it into a form. He said they’re great for picking up little annoyances, and suggested paying attention to trends.
Taking the next step, there is good old fashioned talking one on one. New technology means this doesn’t necessarily have to be done in person, though. Alternatives include Skype and Google Hangouts.
Lofgren suggested getting a brief overview of who customers are, diving deep into their problems, and presenting a solution for feedback. Do at least 20 of these. Most people want to help, but you could offer discounts as an incentive.
— photo credit: Kelowna Now
More posts in the Economy category
Monday, August 15, 2011
Enough already with the HST
It can’t get much more controversial than the HST. As far as issues go, the only rival that comes close is the proposed Ajax mine. But polls — even unscientific polls — have a way of telling a different story.
The latest poll at The Daily News asks readers how they interpret the 50-per-cent turnout for the HST referendum. Depending on how you look at it, 50 per cent might not be a bad turnout. We’re reaching the point where we would be happy to have that many people voting in a provincial election.
In the 2009 B.C. election, we set a record with 50 per cent. That was down from 58 per cent in 2005. In the 1983 provincial election, 70 per cent of eligible voters cast ballots.
Things on the federal scene may be headed in the same direction. In the last election, the turnout was 61.4 per cent, up marginally from 59 per cent in 2008.
But what about the HST referendum? When devising the poll for The Daily News, we put in two serious answers and one not-so-serious answer: Fed up voters want to be rid of it, enlightened voters want to keep it, 50 per cent don’t really care.
As of this writing, 62.8 per cent have chosen the somewhat cynical option number 3. OK, so how do we take the next step and interpret that number?
I’m guessing we have a case HST overload. People have read and heard so much about the topic that they just don’t care any more. Both sides can be extreme and uncompromising in there views.
And at this point, with voting for the referendum over and done, it doesn’t really matter what anyone thinks. In a couple of weeks, the numbers will have been counted and announced, and we’ll have fresh new controversies to keep us occupied.
More posts in the Economy category
Monday, July 4, 2011
A fork in the road: if not resources, then what?
If nothing else, the Ajax mine proposal is forcing Kamloops residents to think about the image of our city. Are we a hard-core resource-based kind of place? Or do we aspire to something more?
There is a good argument to be made for resource city. After all, we have a pulp mill on the edge of town and we have several railway tracks running right down the middle. The city is a major hub for highway transportation.
Kamloops has a long history of being a centre for extracting resources, processing them, and sending them on their way to places like Vancouver, where they are distributed around the world. And, really, there is no shame in that. Resources are the engine that drive B.C.‘s economy.
About the only “clean” industry of any consequence is tourism. Kamloops has tried to build on that with the tournament capital concept, and people do come here for golfing, skiing and mountain biking. But we don’t really have any major attraction within city limits that would compel visitors to make the city a destination.
If we collectively decide that a mine is not right for the Kamloops we envisage, then we should go further and decide what kind of industry we do want here. If it’s tourism, then we should redouble our efforts at growing it. Are there any landmark buildings or major events to draw people here? Maybe we should draw on our western heritage and transform downtown into Barkerville for a week.
If we don’t want a large-scale mine in our midst, then we’re going to have to think big about what we want in its place.
More posts in the Economy category
Tuesday, June 28, 2011
Ajax poll pulls 'em in
The Daily News poll on the Ajax mine proposal is done, and what a big turnout. A total of 3,065 people voiced their opinion. Even so, a slight majority remain in favour. Hang on to your hats. It’s going to be a wild ride before this issue is finally hashed out.
More posts in the Economy category
Monday, June 27, 2011
Ajax mine looms as major issue
I was away for three weeks (see pneumonia post below), and one of my catch-up jobs was to update the newsonaut page on the Ajax mine proposal. It was a lot of work, because there have been many letters written to the editors, a number of articles, an editorial, and even a column. This issue’s got legs.
On top of that, The Daily News has a poll showing a slight majority of people in favour of the mine. Perhaps more interesting is the fact that more than 1,000 people have taken part in the poll. That’s a whole lot of opinion.
I’m guessing that the people in favour of the mine see it as an engine for job creation and a general booster for the city’s economy. There are a lot of people in Kamloops who are just barely hanging on, and for them the mine might be a lifesaver.
Still, there are many other things to consider. Job creation might come at a high price if the mine turns out to be a major polluter or an eyesore that drives tourists away.
Expect to see plenty more on the mine proposal both in the print and online editions of The Daily News. We hope to make sure your opinion is based on as much information as possible.
More posts in the Economy category
Tuesday, May 31, 2011
An offer they shouldn't refuse
A lot of people seem to think Canada Post should be dead by now, and they no doubt base this on their personal experience. Many, if not most, of us use email and online banking to cover much of what once use the mail for. So who needs ‘em?
As it turns out, Canada Post — love it or hate it — remains a much needed part of what makes the country tick. In it’s report to Parliament in April 2010, the agency noted that it delivered close to 11 billion pieces of mail to 15 million destinations. It recorded a profit for the 15th consecutive year with net income of $281 million on revenue of $7.3 billion, and an operating margin of 4.9 per cent.
So — lots of mail and lot of money at stake. The trouble is that even though these number are big, they aren’t as big as they used to be. And the numbers are expected to continued to shrink. Canada Post says it faces a 17-per-cent Lettermail volume decline since 2006.
Which leads us to the current impasse between the corporation its unionized workers. Canada Post says it is offering the following:
» Annual wage increases leading to a top rate of $26 per hour for both new and existing employees.
» A defined benefit pension plan for both new and existing employees despite a $3.2-billion solvency deficit.
» Up to seven weeks vacation.
» Job security for both new and existing employees.
My feeling is that workers should take what they can while they can still get it. The day will come when offers like this will be impossible.
More posts in the Economy category
Wednesday, May 25, 2011
Gas war prices a reminder of yesteryear
With the price at the pump currently as low as 106.4, many of us are happy to have relief from the rates hovering at 30 cents higher in much of the rest of B.C. It’s easy to forget, though, that just one short year ago, 106.4 would have been considered to be the norm.
I’ve added a new feature that allows you to track gas prices over time in B.C., courtesy of GasBuddy.com. It shows a steady climb over the past year to the stratospheric prices we now pay. It also allows you to make adjustments for time periods and geographic areas, so feel free to play around with it.
More posts in the Economy category
