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For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Archive for April 2nd, 2008

Amazon’s SMS Buying Service: Jam Cell Phones or Get Better Market Intelligence?

Posted by Bob Warfield on April 2, 2008

I read with interest in TechCrunch that Amazon is launching an SMS buying service.  If you have a cellphone, you’ll be able to text a name, a description, a UPC, or an ISBN (Library of Congress book number) and get back search results from Amazon.  If you like what you see, you can elect to purchase and get a callback from Amazon to complete the transaction.  As TechCrunch points out, the obvious application is comparison shopping when you see something you like.  Got a book at Barnes and Noble?  Check it on Amazon and order it there if the price is better.  I already use Amazon frequently to check prices when ordering online.  A certain percentage of the time, their price is better and I am diverted there instead.

It’s a clever idea, although I hate the SMS interface.  I suppose their assumption is if you have a phone capable of a more powerful UI platform you’ll just go to the web site.  It does make me wonder, though.  Retailers typically hate comparison shopping.  Those that are in the low cost provider niche may offer price guarantees, but that doesn’t mean they like to honor them.  The ubiquity of contact makes it almost a certainty customers can have access to the lowest price quotes wherever they go.  It makes me wonder whether some retailers won’t decide they want to jam cell phones ala some movie theaters to stop the practice.  After all, having paid for an expensive bricks and mortar presence which favors the spontaneity of browsing, now they have to suffer the indignity of having defeat snatched from the jaws of victory just as they’re about to make the sale. 

As pricing information becomes more available, the friction in the markets will reduce.  Retailers can find themselves less up to date on pricing than their customers, which is a dangerous place to be.  It will be absolutely essential for retailers to have great pricing intelligence that operates in real time.  Imagine what a great impression it would make if the service was tied into the point of sale terminal.  You walk up with your purchases and the clerk informs you with a smile that several of your items are being marked down on the spot in keeping with the retailer’s, “We bring you the best value,” policy.  It wouldn’t take much of that to make me loyal for life, how about you?  There are companies in this business of providing such pricing intelligence.  RivalWatch is one such and claims to have 12 of the top 15 online retailers as customers.  Such services are quite different than shopping bots because they’re providing intelligence to retailers and are focused on being accurate more than letting resellers buy placement or play other games with the integrity of the data.

It will be an interesting arms race to see whether outfits like RivalWatch can keep access to critical data they need to deliver the information.  After all, retailers are not incented to let such information out to a service like RivalWatch.  Many higher end markets go out of their way to limit the availability of pricing information.

Progress marches on.

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Wal-Mart: The Opposite of Google’s “Don’t Do Evil”

Posted by Bob Warfield on April 2, 2008

Jeff Jarvis tells the amazing story of Wal-Mart’s latest evil behaviour.  Apparently an employee was hit by a truck and brain damaged.  She will require care for the rest of her life.  Her family sued the trucking company and won a $1 million settlement, of which they only received $417,000 after legals (the legal profession is another group that doesn’t exactly follow Google’s credo).  After paying other initial expenses, that left $275,000 in a trust fund for the ongoing care she’ll need the rest of her life.  Along comes employer Wal-Mart which has a clause in employee’s health insurance allowing them to sue the employees to recover expenses.  They want to take that remaining $275K the family needs for ongoing care.  In fact, they wanted to take the entire $470K that was paid in medical fees, which the family had no way of paying.  Fortunately, a judge ruled they could only go after the $275K trust fund.

The whole think doesn’t even make remotely good business sense given the PR impact it’s having, the cost of their own lawyers, and the sums of money involved.  Not only are they evil in this case, but they’re just plain stupid.  CEO H. Lee Scott should be cleaning house on this kind of rotten corporate culture.  The whole company would do much better if he would.

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