Tag Archives: Ecommerce

The EU VAT Directive For Digital Products Begins Tomorrow!

Hello everyone! My sincere apologies for not updating the Digital Marketing Times blog more in 2014.  This was due to a number of circumstances, including business-related and personal/family reasons.  I intend to write much more on this blog in 2015, so please stay tuned and check in regularly, as there will be more digital marketing information you can use right here.

Before I begin, I want to wish you all a happy, healthy, and prosperous 2015!

The information I want to discuss today relates to the EU VAT directive that will take effect beginning tomorrow, January 1, 2015.  Essentially, all marketers who sell digital products are required to collect VAT based on the purchaser’s location.  This is where a myriad of problems come in, especially for those that are small- to medium-sized businesses, as a lot of expensive administrative costs and extra paperwork is required to be in compliance.

A good summary of all of those issues can be found here:

Disclaimer: I am not a lawyer; thus, the information I present here is NOT to be taken as legal advice.  Thus, I am NOT responsible for any information presented here that you choose to use in your business.  Please consult a qualified attorney and/or accountant for legal advice regarding the EU VAT and your particular situation.

I’ve learned from a reliable source (who lives in the EU) that each EU member state must create a national law, pass it in their respective Parliaments, then apply those laws in their respective countries in order to make the EU VAT executable.  As you can imagine, that will take time.

Now, the question remains whether those national laws, once they are passed, can retroactively apply the EU VAT directive back to January 1, 2015, the first day the EU VAT directive is to take effect.  That is anyone’s guess, but for the EU countries to actively enforce that directive, they must pass their own national laws first.  That has not happened yet, and it will be a period of time before they do.

Suffice it to say, though, if you do sell digital products, you need to be aware of this law and take steps to be in compliance for if/when the respective EU countries pass their national laws to enact the EU VAT directive, especially if those laws do retroactively enforce that directive from January 1, 2015. (In other words, you need to be preparing for this NOW if you haven’t already).

Thus, what can you do if you sell digital products from your website(s)?

Well, if you don’t utilize a third-party processor like ClickBank (and I’ve heard that JVZoo and Zaxaa are working on complying as well) to take care of the VAT (and there are problems with this approach as well, which you can read more about at the link above), you’d have to register your business in each EU member state to which you sell, as each EU member state has different VAT rates (there are reportedly around 75 different rates!).

Plus, “digitally-delivered service” is defined differently in different EU countries; some countries will see sales of ebooks and digitally-delivered programs as being subject to VAT, while other countries will only see the sales of ebooks as being subject to VAT.  Thus, it is virtually impossible to satisfy the requirement due to the fact that digital marketers don’t usually get the required data needed to determine the purchaser’s place of origin until AFTER he/she has clicked the “Buy Now” button.

Thus, unless a third-party processor or a website plug-in can calculate the appropriate VAT after the purchaser has input his/her info, it’s virtually impossible for a digital marketer to apply the correct VAT for each purchase.  And, as I said, there are around 75 different VAT rates that can apply, depending upon the specific country and purchase.

Thus, you can see some of the issues that this EU VAT directive is causing for digital marketers, which is why many are calling it the “VATMESS,” even creating the hashtag #VATMESS on Twitter.

In my opinion, (again, not to be taken as legal advice), the best course of action would be the following:

1. Stay tuned to this developing issue- check back here regularly, as I’ll keep tabs on this issue.  The link above is also a good blog to check out.

2. Contact your attorney and/or accountant to learn how you can be in compliance with the EU VAT directive.  Do this NOW rather than later; even though there are no national laws in place (to my knowledge) to enforce the EU VAT directive, it’s possible they could retroactively apply the respective national law back to January 1, 2015 if/when the national laws are created and enacted.

3. Do NOT go the route that some digital marketers are considering: Not selling to EU members.  While this may seem like a reasonable alternative to avoid the legal issues and administrative headaches and paperwork that will accompany selling digital products to EU members, you would be in violation of discrimination laws for willfully not selling to EU members, creating a different type of (and equally large) legal issue for your business.

Essentially, you cannot just ignore this and hope it goes away.  While, as the link above indicates, EU government officials are beginning to realize the strain and cost the new EU VAT directive will put on digital businesses, especially those that are smaller- and medium-sized, the directive is likely NOT going away.  Instead, there will probably be some modifications that will be made to help make it easier for these businesses to be in compliance, but the businesses will still have to obtain the VAT, whether it’s through their own efforts and/or through a third-party processor.

In fact, the directive could potentially apply to physical products beginning in 2016 (as stated at the link above), which makes it even more vital that your business (especially if it also sells physical products in addition to digital products) stays informed and gets into compliance with VAT now.

As they say, “knowledge is power.” Stay in the know and stay tuned to this blog and to the link above for further details on the EU VAT directive – only by staying updated and taking action can ensure your business is in compliance with the new directive and can be profitable in 2015 and beyond.

 

Amazon Prime Is A Marketing Problem, Not A Value Problem

Much talk has been made over Amazon’s decision to raise its Amazon Prime program cost to $99 per year, up from $79 per year.  It’s the first time in the program’s nine-year history that the price was raised.  This comes shortly after Amazon raised the rates in countries throughout Europe.  Combine that with the fact that Amazon has only made a relatively marginal profit and is a publicly traded company, and it’s not that surprising that Amazon would raise the rate of Amazon Prime.

In fact, there were rumors that Amazon might raise the price to $119 per year, even up to $139 per year, so the fact that the price only went up $20 per year is actually small.

However, there are many people complaining about the price increase, enough so where they are reportedly considering dropping their Amazon Prime subscription before the next renewal.  At last check on this DealNews poll, there were 200 more votes to end their Prime subscriptions before renewal, about 58% willing to end it versus a 42% willing to keep it (essentially around 4 in 7 people willing to end it versus 3 in 7 people willing to keep it despite the rate increase).

Some are wondering if people are still getting enough value from their Amazon Prime subscription to justify the increased cost.  Well, let’s consider what you get:

– You get free 2-day shipping on nearly every items fulfill by Amazon, even if you don’t spend the minimum $35 as non-members must do.

– You get to borrow one free book each month (though you need an actual Kindle device; Kindle mobile apps or desktop applications do not quality for this benefit).

– You get access to Amazon Instant Video, including many free television episodes and series, movies, and more.

Those benefits alone give you more than what other subscription-rate video-only providers give you, such as Netflix or Hulu Plus, thanks to the countless number of items you can shop for online.

In addition, Amazon plans to release a new streaming radio service for Amazon Prime members in early April, thus entering the free online streaming industry alongside competitors such as Pandora, Spotify, Google Now, and iTunes Radio.  Thus, even more value will be provided to Amazon Prime subscribers.

Thus, I think it’s safe to say that the value of Amazon Prime is as high as ever, and soon to be even higher.  Why, then, are many people complaining and even considering ending their subscriptions to Amazon Prime?

In my opinion, it has to do with Amazon’s marketing.  How many times have you heard the magic number of “$99”?  Probably too many times – every time you think of Amazon or Amazon Prime, I’m sure that number has popped into your head, along with the soon-to-be old rate of $79.

This $99 is what people keep focusing on, and, thus, have overlooked what that number actually is.  That $99 is a yearly rate, not a monthly rate, and this is a point that Amazon has failed to remind people of.  In fact, to my knowledge, they haven’t even compared their service to Netflix’s.

Remember that Netflix offered their streaming online movie and television service for $6.95 per month, then it went up to its current $7.95 per month.  Not too many make mention of the $7.95 per month cost now. (Many subscribers and investors DID complain about the fact that Netflix raised the cost 60% to offer both DVDs and streaming to customers after they originally offered the two together for $9.99/month, plus the fact Netflix didn’t offer a discount for bundling the two together).

The $7.95/month cost, when multiplied by 12 months per year, comes out to an annual cost of $95.40/year, less than $4 cheaper than the new Amazon Prime rate.  As mentioned above, value isn’t the problem with Amazon Prime – it still offers way more than Netflix for that $99/year.  However, Amazon has failed to emphasize this in their marketing.

One of the main keys to marketing is pricing, and presenting that pricing so that it represents the most value.  This is usually shown by breaking a price down to its lowest unit cost.  You see this exhibited by many companies; one common example is life insurance companies breaking down life insurance to cost per day.  I’m sure you’ve seen Alex Trebek talking about Colonial Penn’s life insurance coverage costing “less than $.35/day; that’s less than the cost of a daily newspaper.”

When higher-cost items are broken down into smaller units, they are much more palatable to the budget-conscious consumer.  When you keep prices at higher units, especially ones pushing $100 like the new Amazon Prime rate, it’s going to be naturally oppressive to people because most people consider $100 to be sizable money.  However, if that cost was broken down by month or even day, it would be much more palatable to most and likely would quell much of the anger and dissension that has gone through the Amazon Prime subscriber base.  The yearly cost of $99 broken down by month comes out to be $8.25/month, $0.275/day (less than the cost of Colonial Penn’s life insurance daily rate, in fact).

This would especially be true if Amazon was comparing that monthly cost to a comparable service like Netflix or Hulu Plus, both of which do not do anything in regards to carrying a large inventory of items and shipping them to the consumer.  This would reemphasize the value subscribers are getting with Amazon Prime, and for most, would justify the higher rate increase.

Due to the fact that Amazon has failed to do this, everyone is fixated on the $99/year cost.  Certainly, the one-time payment of $99 can be a sizable amount for many, but when you consider that it’s a yearly cost and the fact that most households easily pay that much and more per month for their cable and Internet subscription packages, their groceries, their clothing, their utilities, their car insurance, their home insurance, and other essentials and non-essentials (cable and Internet, while important, isn’t exactly an essential package like food and shelter), you can see that the Amazon Prime rate increase isn’t that substantial for the value a subscriber gets.

Yet, Amazon is letting the public run wild with the $99/year price increase as being the “end of the world” and a good reason to end their subscriptions to Amazon Prime, even if they’ve been loyal subscribers for years.  This is another example of where the power of social media and online communication via the Internet must be monitored and responded to right away, as Amazon really hasn’t combatted this pervading viewpoint that the price increase is unreasonable.

As mentioned above, it was inevitable that the price increase would happen; after all, Amazon makes a marginal (in relative terms) profit compared to most companies, especially those that are publicly traded on a stock exchange.  Of course, investors will get antsy over rising costs and slim profits, so Amazon had to take some step to increase their revenues.  Besides the fact they raised the minimum purchase price for free shipping to $35 from $25, they’re raising the price of Amazon Prime to $99 from $79.

Again, though, it’s a relatively minor increase compared to what was originally proposed, not to mention it’s a one-time yearly fee, not a twelve-time monthly fee.  Most people pay far more per month for food, clothing, car insurance, health insurance, cable and Internet TV subscription bundles, etc.  Yet, most of those people aren’t complaining to the extent that they are about the Amazon Prime price increase, and that’s because of how those services are marketed as compared to Amazon’s marketing of Prime.

For Amazon to quell this anger and dissension amongst the Amazon Prime subscriber base, they need to do two things:

1. Break the yearly price down by month, even by day (as I did above), and emphasize that in their marketing.

2. Reemphasize all of the value subscribers will continue to receive, including the new music service that is scheduled to come online next month.

The first item has been non-existent, while the second item has been haphazardly done at best.  I really think that by emphasizing these two points, Amazon can help to quell the concerns and anger coming from much of the Amazon Prime subscriber base and keep many of them from fleeing.  If too many of them leave, this could start a bad cycle, as Amazon’s profits will suffer, scaring investors further and making Amazon consider more price increases in the near future, which will only make subscribers even angrier and giving them more impetus to unsubscribe from Amazon Prime.  It will be interesting to see the numbers of how many Amazon Prime subscribers stay and how many go as the new rate increase kicks in.

What do you think of Amazon’s rate increase of Prime? Reasonable? Unreasonable? Are you a subscriber to Amazon Prime? If so, do you plan on keeping your subscription or dropping it? Why? Feel free to answer any or all of the questions in the comments box below.

Fujitsu’s New Tactile Sensation Tablet Screen Could Be A Game Changer For Online Retail

Late in February, Fujitsu unveiled a prototype of a tablet that has the ability to allow the user to feel the texture of what he/she sees on the screen.  Therefore, if you are seeing a rough object, you could feel the coarseness of that object; if you’re seeing a smooth object, you could feel the silky smoothness of that object.

Think of the implications this could provide for online retail. Many people aren’t fond of purchasing clothing online because they can’t touch it, can’t try it on, etc.  While they may not be able to try it on (virtual reality and/or sophisticated online diagrams may solve that issue), with this technology, they certainly can get a feel of what the fabric feels like, increasing online clothing conversion rates.

This could encourage more people to shop for clothing online and help to pick up that segment of the online retail industry, as other categories sell much more via online channels, including technology, books, and even food (none of which rely on touch to help convince prospects to make a purchase).   With the tablet commerce (a.k.a. “tcommerce”) industry already picking up in terms of higher-priced purchases, this technology would fit in perfectly to encourage even more apparel purchases via tablets.

Most people (particularly women) like to feel the fabric and get an idea of how it would feel on their skin.  One part of that puzzle may be solved with this new tactile sensation technology; I definitely can see this technology revolutionizing the online retail and ecommerce industry in the coming years and make it as natural for people to purchase clothing online as they do technology, books, and food.

What do you think? Do you think this will be a game-changer, or is this just a technology that won’t leave any lasting impact on online retail? Let me know in the comments box below.

Why Apple Has Gotten Rotten In The Tech Industry (Part 2: Samsung)

Editor’s Note: Barring a schedule change, Parts 3 (Amazon) and 4 (Apple itself) of this series will appear on this blog next week.

Today, we will take a look at how Samsung has done damage to Apple’s image as the tech leader. You can see how Google has done damage to Apple via Part 1 of this series.

Samsung has been one of the most prominent manufacturers of smartphones and tablets when it comes to the Android operating system.  Samsung has created the Galaxy S series of smartphones to rival Apple’s iPhones.  The Galaxy S3 and S4 smartphones have received strong reviews, though some were disappointed that the S4 didn’t do more to upgrade on the S3’s impressive features.

However, Samsung’s technology has greatly caught up with the iPhone, and in some ways, has surpassed it.  For instance, Samsung includes a 13-megapixel camera with its smartphone, whereas Apple’s iPhone 5s’s camera only has an 8-megapixel camera (just as the iPhone 4s and 5 have), just as the Galaxy S3 does.  Samsung has jumped ahead of Apple in this regard, likely because more and more people are taking pictures with their smartphones, even more so than using them for voice calling.

There’s more features that show that Samsung has overtaken Apple as an innovative of technology.  The Galaxy S4 has two other impressive features that overshadow the iPhone 5s’s technology.  One is the size of the screen: The Galaxy S4 has a 5-inch screen, whereas the iPhone 5s (like its immediate predecessors) only has a 4-inch screen.  Even more than that, the Galaxy S4 introduced the ability to control the touchscreen via the user’s eyes or hand gestures, known as “Air View” and “Air Gesture,” respectively.  Thus, it’s not even necessary to touch the touchscreen in order to control the on-screen display, something that iPhones don’t have at this point.  It’s important to point out that the S4 was released on March 13, 2013, whereas Apple released the iPhone 5s on September 20, 2013, six months later!

Samsung has another line of smartphones that is also doing damage to Apple’s reputation as the tech leader.  The Galaxy Note series is one of the most prominent types of smartphones that is commonly referred to as the “phablet” class.  This name is a combination of “phone” and “tablet,” largely due in part to the size of the screen and the ability of that screen to accept motions from a stylus (a type of electronic pen).  Whereas most smartphones have screen under 5 inches in diameter, the Galaxy Note has consistently been over 5 inches, with the latest version, the Note 3, coming in at a large 5.7 inches. The Galaxy Note 3 was released in September/October 2013, about the same time as the iPhone 5s.

While Apple got rave reviews for its Retina display, it falls short of the Galaxy S4 and Note 3 in terms of pixels, as the iPhone 5s only has 1136-by-640-pixel resolution at 326 ppi, while the S4 has 1920 x 1080 Pixel, 441 ppi and the Note 3 also has 1920 x 1080 Pixel display.

Plus, Samsung’s phones provide the user with the ability of replacing the batteries (whereas Apple’s aren’t removable without service support from Apple technicians), batteries that provide even more talk time than Apple’s iPhones.   Surf times are about the same for both companies, though Apple does win out in LTE with 10 hours versus Samsung’s 8 hours.

In fact, Apple is falling behind in the smartphone industry in terms of popularity, as reported by Mashable.  While Apple did increase the number of iPhones it sold by 13% in 2013, Samsung increased the number of smartphone sales by 43%.  The overall smartphone market grew by 38.4%, thus showing that Apple’s demand is slowing down compared to its competitors, largely because it is not seen as “cool” or “innovative” compared to its competition.

In fact, Apple is following in the footsteps of Samsung in the following regard.  Reports are surfacing that the iPhone 6 will have a 5-inch screen, the first iPhone to have greater than a 4-inch display.  As mentioned above, Samsung has already achieved 5+” status with both its S4 and its Galaxy Note 2 and 3 “phablet” phones.  Again, Apple is not being innovative enough to keep up with the “Joneses,” and is now starting to follow them, further showing why many investors and analysts are looking down upon the stock, which is currently under $500 as I write this post.

One other area where Samsung has outmaneuvered Apple is in the “wearable tech” industry.  Many people have talked about “smartwatches,” which is a watch device that allows you to receive notifications that your smartphone is receiving a call, as well as enabling you to accept that call.  You can also adjust various settings on your phone via this device, as well as surf directly on the device via its roughly 1.5″-2.0″ screen.

Samsung has already released the “Galaxy Gear” to combat the industry leader in the field (no, not Apple, but Pebble, a company I’ll discuss more in Part 4 of this series).  This was released on September 4, 2013.  The reviews on the Galaxy Gear were less than favorable by many, especially to Pebble’s smartwatch, but the fact that Samsung has already dived into the wearable tech industry shows that Samsung is more in tune with the development and speed of the technological industry than Apple.  In fact, word has it that Samsung is about to release the “Galaxy Gear 2,” an updated version of its smartwatch, to go with its new Samsung Galaxy S5 (and potentially other Samsung smartphones).  No date has been mentioned of when these two devices will be available, but probably a safe bet that they will appear sometime in 2014.

Apple had excelled in the development and speed of the technological industry when it released the iPhone and iPad, but it has failed to maintain that standard.  There are continuing rumors that it will release an iWatch in 2014, but at this rate, it might be after Samsung releases its second smartwatch.  Apple is using 64-bit processor technology in its iPhone 5s, whereas it seems that Samsung will stick with 32-bit technology in its new S5 smartphone, so that is one area where Apple is leading in technological innovation, but those moments have been few and far between for Apple over the last few years.

In Part 3 of this series, we’ll look at how Amazon is outmaneuvering Apple in the tech industry.  Watch for that. In the meantime, let me know via the comments below if you are a Samsung or Apple user, if you have used one and switched to the other, and what you like/don’t like about either Samsung or Apple.  Also, let me know if you think Apple’s best days are behind it or if there are brighter times ahead for the tech giant, and why you think or don’t think so.  Thank you for reading, and have a great day.

Why Apple Has Gotten Rotten In The Tech Industry (Part 1: Google)

You may be asking yourself, “What’s wrong with Apple?”  If you’ve been following the stock market, you’ll have heard a lot of commentary on what’s wrong with Apple and why its stock price is now barely over $500.  It dropped 8% yesterday, and it has fallen about another .25% or so in pre-market trading today.  Recall that this was the stock in 2012 that hit $700 and had analysts questioning whether it would hit $1,000, long before Google ever would.

Of course, we know that Google is well over $1,000 (it’s actually over $1,100), and it has been over the $1,000 mark since about the midway point of 2013.  And, in addition to the stock market, Google is one of the key reasons why Apple has gotten rotten when it comes to the tech industry, and has done it in two main ways.

1. Google’s Android operating system, the main operating system competitor to Apple’s iOS operating system.

2. Google’s Nexus line of products, including the Nexus 4, 5, 7, and 10.

Regarding the Android operating system, it’s on virtually every major phone and tablet that doesn’t run iOS, Windows, or Blackberry (the latter two are bit players in the mobile industry, with BlackBerry teetering on the point of collapse, while Windows hasn’t gained enough traction to put a real dent in either Android or iOS).  That means that Android is on virtually every smartphone and tablet made by the following companies:

– Google (co-created the Nexus 10 tablet with Samsung)

– Samsung (besides its own line of phones and tablets, also co-created the Nexus 10 tablet with Google)

– LG (in addition to its own line of phones and tablets, it was also the manufacturer of Google’s Nexus 4 and 5 smartphones)

– HTC

– Asus (manufacturer of Google’s Nexus 7 tablets – both versions)

– Etc.

In fact, Android has 81.3% of the global smartphone market, far more than Apple.  In most markets, Android smartphones make up over 50% of sales in those markets.  Yes, that includes the U.S. as well.  Apple still gets plenty of fanfare in the U.S., especially when they release a new version of the iPhone or iPad, but it’s far from the only game in town anymore when it comes to quality smartphones and tablets.

As for tablets, in Q2 2013, Android tablets doubled the pace of Apple tablets, as reported by Mashable.  In Q2 2012, the two operating systems were about 50/50, but in Q2 2013, it was Android with 67% of the tablet market, versus 28.3% of the tablet market for Apple.

Thus, Google has been pulling ahead in both smartphones and tablets for quite some time; this is NOT a recent phenomenon.

In addition, Google’s Nexus series has been turning the tide for the Android operating system against the iPhone.  The Nexus 4 came out to very solid reviews (the only real knocks were the lack of LTE and a relatively average camera), and the Nexus 5 (having LTE and a better camera) is coming out to even better reviews.  Even some Apple fans on various retail sites have said that they’d either consider replacing their iPhone with a Nexus phone, or have already done so.  That was unheard of just a few short years ago, further emphasizing the fact that Apple has lost the innovative edge, while Google and others have caught up to the iPhone in terms of technological usefulness and ease.

The Nexus smartphones are making inroads against the iPhone for several reasons. One reason is the lower cost without a contract ($349 for 16GB version and $399 for 32GB version) versus $199 subsidized on a 2-year contract from main providers AT&T, Verizon, and Sprint.  T-Mobile was finally added as a mobile provider for iPhones, and they do offer the option of paying for the phone upfront, but expect to pay about $610 for the 16GB version and $710 for the 32GB version.

That major difference in price used to not matter to many people, but that is becoming less and less the case, as Android smartphones, particularly those made by Google, Samsung, and LG, have caught up to Apple’s iPhone in terms of technology.  In some ways, they have even surpassed it.  Google’s Nexus phones are quite responsive in terms of their processors and in their touchscreens, similar to Apple’s iPhones.  This is why more Apple users have or are considering losing their iPhones for good for Android smartphones.

In fact, being on Twitter everyday @jchengery, I have noticed an interesting trend of more people taking up Android phones as their phone of choice.  One notable celebrity who is an Android user is Donald Trump.  I’ve noticed other people who were iPhone users in the past, but have recently switched to Android. One such example is CNBC Tech Reporter Seema Mody.

There are rumors that Apple will release an iPhone 6 later in 2014.  Some reports even suggest that it will have charging capabilities without wires.  Well, that’s great for Apple fans, but that’s not a new innovation for the industry.  Another main reason why Google Nexus phones have been making inroads against iPhones is because of Qi.  This wireless charger, for Google’s Nexus 4 and Nexus 10, was released in 2012; then, an updated pad for its Nexus 5 and Nexus 7 was released in 2013.  More and more people are wanting wireless technology due to the fact that they can connect to the Internet virtually anywhere; thus, they want the ability to charge their phone anywhere, even without an outlet nearby.

In fairness to Apple, they did come up with the fingerprint scanner on their latest iPhone, the iPhone 5s.  However, there were some issues of it not working easily for all people.  Plus, it disappointed users somewhat because it didn’t allow them to swipe their fingers to purchase items on the iTunes and App Stores, a feature many were looking forward to.  The main reason that wasn’t included in the iPhone 5s is mostly because it was a test feature that was only intended to unlock the phone for the user. While the scanner created much buzz during the debut of the iPhone 5s, the staying power of that buzz fell away pretty quickly, thus not giving Apple the boost it needed to stem the tide by Google and others in the tech field.

All of the aforementioned circumstances form part of the reason why there is such a disparity in the respective stock prices, with Google being over $1,100, while Apple is just over $500.  Many analysts and even loyal Apple supporters are clamoring for new, innovative products to revolutionize the industry, much like the iPhone and iPad did.  However, that’s been the major problem for Apple: Since the original iPad debuted on April 3, 2010, there have been no new products from Apple, and very few technological innovations, virtually none on the order of the iPhone and iPad.  They made some modifications to the iPad, some of which were very ingenious and innovative, especially with the iPad 2, but Apple has been in the rut of releasing a new iPhone (or two, in the case of 2013) and iPad each year, and nothing else, a pattern that is wearing thin with analysts and many Apple fans.

Google has made similar inroads against Apple’s iPad as well.  Google’s Nexus 7 FHD tablet (2nd generation version) has received rave reviews for its speediness thanks to its Android 4.4 operating system (codename: “Kit Kat”), its lower price ($229 for 16GB version, $269 for 32GB version, and $349 for 32GB LTE version), its high-resolution screen, and its form factor.   The prices are considerably lower than the Apple iPad Mini Retina (the latest version of the Apple iPad Mini), as the equivalents cost $399, $499, and $629 respectively. In addition, Google allowed you to choose any carrier you wished so long as you could use a micro-SIM card, whereas you had to enter into a contract with any of the four main carriers to have an Apple iPad Mini Retina with LTE capability.

In fact, there were rumors that Apple wasn’t even going to release a new iPad and iPad mini at the end of 2013, partly because there were some material shortages at their main Foxconn headquarters in China, thus delaying the manufacturing of new iPads and iPad Minis.  I believe that Apple had no choice but to do so because both Google and Amazon had headstarts into the 2013 holiday season with their latest tablets, both of which received rave reviews, and thus, Apple had to act.  The new iPad Air and iPad Mini Retina received good reviews, though some questioned why Apple didn’t become the first major tech provider to equip its wireless devices with the ability to utilize the new wireless ac protocol, which is reported to be between three to four times faster than wireless n.

This was a missed opportunity for Apple, as they could have set a new standard in wireless devices.  Additionally, if the iPad Air and iPad Mini Retina aren’t updated with new versions until late 2014 or even early 2015, it’s likely that their competitors (Google, Amazon, Samsung, etc.) will have wireless ac capabilities in their phones and tablets before then.  Plus, the fact that ac is backwards-compatible with wireless n and g made this a real no-brainer for Apple, yet it was a feature they did not act on.  This is further proof that Apple has lost its technological edge and is no longer the tech leader it was just a few short years ago.

One other area where Google has caught up to Apple is in the TV industry.  There have been many rumors that Apple is negotiating with major broadcast networks to provide channels such as HBO, Showtime, and others over an Apple TV device.  So far, that has not come to pass – it can stream Netflix, Hulu, YouTube, and others, but nothing beyond that.  Even if Apple can get programming from major cable providers, it’s debatable how much of an effect that will have on Apple’s valuation, since the broadcasting industry is already a well-populated, well-established field.

Google has taken advantage of this lack of cable programming by introducing Chromecast, a USB device that plugs into your HDTV and allows you to wirelessly stream YouTube and virtually any website that is in Google’s Chrome browser on your HDTV.  In addition, it’s only $35 (even less at some places) to gain many of the same capabilities that Apple TV provides, yet the Apple TV costs $99.

Again, Google duplicates Apple’s abilities at a fraction of the cost.  The fact that much of the population is taking price into greater consideration when choosing their wireless devices favors Google and Android (including Amazon, Samsung, LG, Asus, and others).  Apple’s premium brand is losing power and influence in the industry, which is all the more reason why its stock valuation has fallen considerably from the $700+ it was at in 2012.

Thus, Google continues to make up ground on Apple, further showing that Apple has gotten rotten in the tech industry, especially when it comes to innovation and remaining the tech leader, which it no longer is.  At best, it’s near the top, still in the hunt, but it’s no longer alone up there, and in many ways, it’s fallen behind Google, Samsung, Amazon, and others.

The next post in this series will focus on how Apple has fallen behind Samsung in terms of tech innovation. Watch for it. In the meantime, let me know what you think of the battle between Apple and Google in the tech industry, what products you prefer, and what products you’d like to see from either or both companies in the future in the comments below.

UPS’ Shipping Mishap: Damage To Retailers’ Future Holiday Seasons?

A further update from yesterday’s post, http://wp.me/p47TSP-o: UPS says that “most packages will be delivered today.”  Two questions come to mind:

1. Why weren’t all of those packages delivered yesterday, as yesterday was a normal shipping day?

2. Why is it “most packages” and not “all packages”?

This goes to show that there was a much bigger backlog and much underestimation of how many online orders there would be late in the season than was previously thought.  As I mentioned yesterday, this oversight and system backlog really needs to be corrected and updated for next season, as the season is only one day longer than this year.  And, I think it’s safe to say that not only will people be ordering online late again (as they do virtually every season), but that there will likely be more online orders overall next year.

I read somewhere (can’t remember or find the source at the moment) that mobile orders are up 15% from 2012, quite a substantial jump.  While expecting a 15% increase Y/Y in 2014 is probably unlikely, expecting a mid-single digit to even around a 10% increase in 2014 is likely not out of the question, especially since all-time commerce is going to become even more prevalent in 2014.

All-time commerce is where a retailer (offline or online) can reach you from virtually anywhere because the retailers have sales channels across all devices, including television, desktop/laptop, and mobile (including both smartphone and tablet).  In addition, there will be different points of the sales funnel across all devices, whether that’s the consumer looking for information about a specific product, looking at reviews of that product, comparing prices across different retailers, or looking to purchase the product.

Tablet commerce, especially, is really ready to start exploding in 2014, further increasing the likelihood that mobile orders should see another sizable rise next year.  We’ve already seen signs of this in 2013, being that the average purchase price of transactions on tablets was higher than it was on smartphones.

This is all the more reason why retailers (offline and online) and shippers need to get this mishap fixed and the systems updated right away, as this trend of online shopping late in the season is only likely to increase in the coming years, especially since it’s so convenient for people to shop from virtually anywhere so long as they have an Internet connection.  It’s really in the best interests of retailers, shippers, and consumers that the problems that caused this shipping mishap to occur are correctly identified and addressed so that such a shipping scenario does not occur in 2014.

Otherwise, retailers may suffer the sting of not having as many orders coming through late in the season because, many people can’t do much late-season in-store shopping, and they won’t trust the online ordering process, which would result in fewer overall sales, and thus, a greater likelihood of retailers falling short of expected sales marks for the whole season.

What Retailers and Etailers Can Learn From The Christmas Delivery Mishap!

Hope you all had a Merry Christmas and are getting ready to say good-bye to 2013 and say hello to 2014!

Hopefully, you were not one of those who had a delivery not arrive by Christmas.  As you may have heard, there was an overload of deliveries on both UPS’ and FedEx’s systems, thus causing some packages that were ordered well in advance and even with priority shipping that were not delivered by Christmas.  You can read more about that here.  Talk about a “bah humbug!”

UPS and FedEx are blaming it on not anticipating as many orders due to projections that were off-target.  They also blamed it on poor weather.  As the article referenced above shows, there were people in at least 11 states (including my home state of Ohio) that did not receive presents in time for Christmas.

There was an interesting dichotomy in how these two main shippers approached this.  UPS had considered calling in drivers and having them ship to customers on Christmas Day, but decided against it.  It’s understandable in the sense that they did not want to call in workers who were expecting to get a scheduled day off, and likely a rare day off at that.  UPS did call in workers to their Louisville, Kentucky hub to sort packages for Thursday and Friday delivery.

FedEx didn’t call in drivers either, but some customers were able to pick up their packages on Christmas Day at their local FedEx Express centers, so FedEx was able to come through to some extent for some customers, whereas UPS (to my knowledge) did not.

In addition to the overloaded systems and poor weather, some analysts placed some blame on consumers who waited until the last minute to order gifts, though as mentioned above, most who had their packages delayed ordered in plenty of time under normal circumstances, so most customers were not very forgiving and understanding about not having their packages delivered by Christmas, especially those who paid for upgraded shipping.

Thus, what can we learn from this mishap, and what can retailers and online retailers learn?

We can learn that waiting until the latter stages of the shopping season may not always be the best choice if we’re shopping online, even though many of us like to do it either because we’re too busy and/or we feel we can get better bargains later in the season.  With that said, hopefully retailers and online retailers (along with their shipping partners) have learned to have enough capacity and capability to handle large-volume orders late in the season.  They will need to prepare quickly, as the 2014 Christmas shopping season is only 1 day longer, as Thanksgiving 2014 is on November 27 (versus 2013’s being November 28).

Some analysts think that this mishap could help offline retailers make more sales late in the season because more people could be willing to enter stores and malls later in the season to avoid this type of potential mishap from happening again.  Conversely, however, online sales could be higher earlier in the season (including during the Gray Thursday-Black Friday weekend) to ensure that such packages from online retailers and retailers’ websites are delivered in plenty of time for Christmas, so I think both retailers ane etailers could benefit long-term over this mishap, especially if they make the necessary adjustments to avoid this situation next year.  It’s certainly vital that they do so, as the Christmas shopping season will be relatively short in 2014 as well.

It is a little surprising to me that retailers and shippers were not better-prepared in terms of their ordering and delivery systems; after all, online shopping and delivery continue to rise with each passing season, and this trend will continue into the foreseeable future.  People’s lives are busier than ever, and with “all-time commerce” becoming a more prominent capability in people’s everyday lives, it’s become even easier for people to do their holiday shopping from virtually anywhere, whether that’s waiting for a business call or eating in the cafeteria at work to watching the children or even while watching a movie on the sofa at home.

Certainly, the weather didn’t help, and that’s something that can’t be predicted, but this mishap really has to be a wake-up call for retailers and etailers (along with their delivery partners) to be better-prepared for late-season online orders, as this trend will only continue, and the 2014 shopping season will not be much longer than this season.  We can only hope that there are no lumps of coal and “bah humbugs” for people on Christmas Day 2014.

Why Retailers’ Thanksgiving Day Plan Should Be Digital, NOT Physical

Editor’s Note: I thought I had published this before Thanksgiving, but something went awry (whether it was human error, technological error, or a combination of both, I can’t say for certain – my apologies for its tardiness.  I hope this article still proves useful and insightful to all who read it, despite its later than intended date – thanks for your understanding).

There has been much debate over whether retailers should open on Thanksgiving Day.  Employees, at first, didn’t want to work on this day, which started to cause a backlash amongst the population.  This resulted in retailers providing extra pay (from overtime to time-and-a-half to even more), a free traditional holiday meal, and even discounts off of purchases in an attempt to smooth things over so that people would not boycott their stores.  Retailers’ main reason for opening on Thanksgiving is because they want to get customers into their stores right away and get them to spend their limited discretionary income in a cautious economic environment with them.

The thing is, in this day and age, retailers don’t have to incur the costs of paying their employees extra, providing holiday meals, and offering discounts, not to mention incurring utility costs for opening the stores.  Retailers should be focusing on their websites and mobile apps to help drive sales on Thanksgiving.

According to a USA Today article, a recent email survey by RetailMeNot.com reported that 64% of people plan on shopping from home on Thanksgiving, while 37% of people will use mobile apps to scan or purchase items on Thanksgiving.  Let’s assume that half of the mobile apps group, about 18.5%, will be those who use mobile apps to purchase items and not to scan items in-store.

Retailers don’t have to force employees to come to work, causing them to lose time with their loved ones and paying them greater amounts for missing that precious time.  They don’t have to incur additional costs of full electricity or heating.  Yet, they can still gain the sales and brand loyalty that they want from customers by utilizing technology and digital marketing tactics.

The future will only get more digital over time. In fact, I could see the following scenario being a more likely event on Thanksgiving than people heading out after Thanksgiving dinner.

While the guys are in one room watching the end of the second football game (on CBS or Fox) and the beginning of the third one (on NFL Network), the women are in another room, sitting on the sofa and in chairs around a coffee table. They put down their drinks and begin talking. One of them mentions about shopping for her husband and pulls out her tablet from her purse, describing what she found online as she heads to the website on her tablet. The other ladies immediately start pulling out their tablets, following suit to see what their family member or friend had found out about a particular sale that was occurring right then and there. Then, another of the ladies mentions another sale, and the ladies begin checking out that site and the deals it’s offering on Thanksgiving.

I see this type of scenario being much more likely of occurring on Thanksgiving than people rushing out to stores to pick up deals for the following reasons:

1. Most people get tired from eating turkey due to the tryptophan; as a result, they won’t be as eager to go out.

2. Many families will enjoy alcohol on Thanksgiving. Most will not want to risk going out on the road after having one or more drinks.

3. Especially in northern cities or where there is bad weather, people will be much more likely to stay in and shop via mobile sites and apps than racing to get “DoorBusters” (that they’ll have to wait in line for, hoping they can get them). How ironic that a major snowstorm is expected to hit parts of the Northeast (including my area in Cleveland), while New York City, Boston, and the East Coast could get around 3 inches of rain, certainly enough to cause flooding issues and travel delays.

4. I see the above scenario being similar to Tupperware parties from earlier decades. Women, especially, will be eager to talk with each other and determine what they are going to purchase for their loved ones. A recent eMarketer article reported that an Adroit Digital poll said that 7/10 moms are responsible for 75+% of the gift purchasing. Talking with each other will help them learn more about the sales on various websites, with the ability to even purchase right then and there.

5. People are busier than ever in our increasing technologically advanced age. People are working more hours, have less down time, and have less time to spend with their families. This is all the more reason why retailers would be wise to start focusing more on a digital marketing plan utilizing their mobile sites and apps for future Thanksgivings than focusing on opening stores for a relatively small portion of the U.S. population and being lucky to break even or gain a tiny profit. They also risk alienating some people from shopping at their stores for the entire season because they disapprove of retailers that open on Thanksgiving.

The world will only become more digital over time, with more advanced mobile sites and apps that will save more time and make purchasing even easier from the comforts of our homes. Retailers can accomplish the goals and profits they want to achieve and be likelier to do so by employing more of a digital plan than a physical plan on Thanksgiving.