Amazon isn’t waiting for the advent of courier drones to ship your orders faster than usual: the Wall Street Journal reports that the e-commerce giant has been testing its own US delivery network in New York, Los Angeles and San Francisco Described in job listings as Last Mile, the initiative is meant to outperform established shippers like FedEx and UPS. These companies are increasing costs, can’t always meet capacity and are “impeding innovation in delivery services,” Amazon says in one job description.
Such efforts aren’t completely new for Amazon. The company is already testing its own delivery network in the UK, and went so far as to invest in a local parcel service. Even the US strategy reportedly began years ago. However, the WSJ understands that an American delivery network is now a much higher priority in light of last year’s holiday shipping meltdown — Amazon would rather not have to compensate angry customers time and time again.
It may also try to offer what existing courier services can’t. While the firm isn’t commenting on its plans, a self-run delivery system would let it deliver orders both on the same day and outside of normal hours. Don’t be surprised if it’s eventually possible to order from Amazon in the morning and get your goods that evening.
drag2share: Shopping Cart Abandonment: Online Retailers’ Biggest Headache Is Actually A Huge Opportunity
Shopping cart abandonment — when shoppers put items in their online shopping carts, but then leave before completing the purchase — is the bane of the online retail industry.
But it’s also a huge opportunity: Approximately $4 trillion worth of merchandise will be abandoned in online shopping carts this year, and about 63% of that is potentially recoverable by savvy online retailers, according to BI Intelligence estimates.
In a new report, BI Intelligence explains what leads a shopper to abandon an online purchase and how retailers can begin to combat rising shopping cart abandonment rates. We collected and analyzed data from top e-commerce companies, and spoke with industry experts whose job it is to reduce abandonment rates and boost conversions, to come up with a number of solutions that can help retailers recover lost sales.
Here are some key points from the report:
- Approximately $4 trillion worth of merchandise will be abandoned in online shopping carts this year, and about 63% of that is potentially recoverable by savvy online retailers, according to BI Intelligence estimates.
- Shopping cart abandonment is increasing, and will continue to do so as more consumers shift to online and mobile shopping. In 2013, as many as 74% of online shopping carts were abandoned by shoppers, according to data shared with BI Intelligence by e-commerce data company, Barilliance. That abandonment rate is up from 72% in 2012, and 69% in 2011.
- An abandoned shopping cart does not automatically translate to a “lost sale,” since three-fourths of shoppers who have abandoned shopping carts say they plan to return to the retailer’s website or store to make a purchase, according to data from SeeWhy. Online-only retailers are at a disadvantage to “omnichannel” retailers in this respect because they have fewer channels through which to recover lost sales.
- Retailers can reduce the rate of abandonment and increase conversions by streamlining the checkout process and also by retargeting shoppers with emails after they’ve left a website. Initial emails, sent three hours after a consumer abandons a cart, average a 40% open rate and a 20% click-through rate, according to Listrak.
- More broadly, an abandoned shopping cart should be seen as part of the increasingly complex series of steps a consumer might take before finally making a purchase, and a strong indicator of consumer interest in a product or a brand. Technology that helps retailers collect and leverage online shopping cart data is likely to be a worthwhile investment.
When you hear a scandalous conversation, there’s always the temptation to live tweet it for the internet’s benefit — but what if your furniture could do that for you? Conversnitch is a project by artists Brian House and Kyle McDonald which reinvents the humble lightbulb as an internet-connected surveillance microphone. Running off a Raspberry Pi, the hardware records conversations in real time and pushes them to Amazon’s Mechanical Turk, where the chatter is transcribed for the project’s Twitter feed. The idea is to generate some alarm about our surveillance-heavy culture, since the bulbs have already been quietly installed in public spaces across New York — although we guess the pair still have a long way to go before they can out-do the folks over at Fort Meade.
Filed under: Internet
People often discuss Bitcoin in terms of its price volatility: Is it up or down? Is it a good investment or a speculative bubble?
But at BI Intelligence, we believe Bitcoin’s real value is as a payments network. Bitcoin offers merchants and individuals an extremely low-cost, virtually frictionless payments system. Value can easily be transferred around the world without transmitting sensitive information that could be used for fraud, and without forcing merchants to pay exorbitant transaction fees.
In a recent report, BI Intelligence explains how Bitcoin works, from the moment when local currency is exchanged for bitcoins, to the moment when it reaches the electronic wallet of a receiving party. We look at the key advantages of Bitcoin compared to the legacy players in the payments industry and examine the challenges that Bitcoin faces as a payment network.
Taco Bell is launching a new upscale taco chain.
The restaurant, called U.S. Taco Co. and Urban Taproom, will feature a menu of 10 premium tacos, thick-cut fries, milkshakes, craft beer, and wine, according to Nation’s Restaurant News, an industry publication.
The first location is set to open in Huntington Beach, Calif., this summer. Taco Bell declined to elaborate on expansion plans.
Here are some of the menu items, according to NRN.
- Winner Winner: Southern-style fried chicken breast with South of the Border gravy, roasted corn, pico de gallo, jalapenos, and cilantro in a flour tortilla.
- One-Percenter: Lobster, garlic butter, red cabbage slaw, and pico de gallo on crispy fry bread.
- Brotherly Love: Carne asada steak, grilled peppers and onions, roasted poblano queso, and cotija cheese in a flour tortilla.
The side of fries comes with dipping sauces including “ghost chile ketchup” and “roasted poblano crema.” One of the beer-spiked milkshakes on the menu, called the “Mexican Car Bomb,” has vanilla ice cream, tequila caramel sauce, chocolate flakes, and Guinness.
Tacos will be priced at about $4 each, and the average check size is expected to be roughly $12 with a drink.
Customers won’t be able to customize their tacos like at Chipotle, but they will be able to watch their food being made.
“Most dishes will be prepared in-house, in glass-enclosed kitchens that allow guests to see meat grilling or tacos in the works — though a few ingredients will come from outside suppliers, like the Texas smoked brisket or Southern pulled pork,” NRN reports.
The new concept is meant to attract a demographic of higher-income edgy foodies who would never step foot inside a Taco Bell.
“We could spend time and money trying to get these people interested in Taco Bell,” but they would probably never become regular customers, Taco Bell CEO Greg Creed told Ad Age. “We thought, maybe there’s a new brand we can create to address this opportunity.”
FOLLOW US: On Facebook
Watson had been a doctor, a geneticist, a game show contestant and even a chef in the past. But now IBM’s supercomputer has a new career: personal shopping. IBM has partnered with digital commerce firm Fluid to develop a cloud-based app called Expert Personal Shopper (XPS), which uses Watson’s brains to answer buyers’ highly specific questions. In short, the computer with many hats now plays the role of a sales associate when you’re shopping online. IBM and Fluid are currently working with several consumer brands, but The North Face will be the first to feature the technology on its website. When the outdoor clothing and equipment company launches XPS, you can ask it questions like you would an assistant at a mall. If you needed a recommendation on the best equipment to use for a five-day cross-country trip, or need to know the best tent to use if you’re hiking with family, including kids, then Watson’s got your back. It’s unclear when XPS will launch exactly, but IBM has granted Fluid a $100 million investment to speed up the digital shopping assistant’s development — all parties involved are planning to develop it further for mobile applications and devices.
Filed under: Internet
This year, for the first time, BI Intelligence estimates that more than one billion smartphones will ship globally. And many of those smartphones will be purchased by first-time users in emerging markets.
To move these consumers onto smartphones, more manufacturers than ever before will be offering smartphones at bargain basement prices. Recently, came news of Mozilla’s upcoming $25 smartphone, adding to a flurry of new devices priced well below flagship phones from Apple and Samsung.
The race to build the cheapest smartphone will create a different kind of innovation than what we’ve seen before. New, exciting hardware features will be rare. Going forward, innovation at the top of the market will likely center on continuing to improve known features. And if a new functionality were to debut from one vendor, expect the rest of the market to catch on quickly. Meanwhile, lower-priced handset makers will use talent and creative thinking to incorporate premium smartphone capabilities into low-cost and mid-range handsets.
Cloud providers Google, AmazonWeb Services (AWS) and Microsoft are doing some spring-cleaning, and it’s out with the old, in with the new when it comes to pricing services. The latest cuts make it clear there’s a new business model driving cloud that is every bit as exponential in growth — with order of magnitude improvements to pricing — as Moore’s Law has been to computing.
If you need a refresher, Moore’s Law is “the observation that, over the history of computing hardware, the number of transistors on integrated circuits doubles approximately every two years.” I propose my own version, Bezos’s law. Named for Amazon CEO Jeff Bezos, I define it as the observation that, over the history of cloud, a unit of computing power price is reduced by 50 percent approximately every three years.
I’ll show the math below, but if Bezos’ law reflects reality, the only conclusion is that most enterprises should dump their data centers and move to the public cloud, thus saving money. Some savings occur over time by buying hardware subject to Moore’s Law, plus the fixed cost of maintenance, electrical power, cooling, building and labor to run a data center. In the end, I’ll show how prices are reduced by about 20 percent per year, cutting your bill in half every three years.
How we got here
Google was first to announce “deep” cuts in on-demand instance pricing across the board. To make the point that cloud pricing has been long overdue, Google’s Urs Hölzle showed in March just how much cloud pricing hasn’t followed Moore’s Law: Over the past five years, hardware costs decreased by 20 to 30 percent annually, but public cloud prices fell by just 8 percent annually:
Having watched AWS announce, by my count, 43 price cuts during the past eight years, the claim of merely a 6 to 8 percent drop for public cloud seems off. (That would be a 2 percent reduction 43 times to get an 8 percent trend line.)
Nevertheless, applying a Moore’s law approach to capture the rate of change for cloud, one would hold constant the compute unit, while the gains are expressed in terms of lower price. Thus, Bezos’s law is the observation that, over the history of cloud, a unit of computing power price is reduced by X percent approximately every Y years.
A bit of digging on Amazon’s Web Services blog shows how Amazon determined the percentage in computing power (X) and time period (Y) on May 29, 2008. The data from 2008 and the Amazon EC2 Spot Instances on April 1, 2014, shows that in six years, similar compute instance types have declined by 16 percent for medium instances and 20 percent for extra-large instances. Assuming a straight line, the pricing would have tracked as follows:
|2011||$0.410||$0.328||3 years, 50% reduction|
|2014||$0.210||3 years, 50% reduction from 2011|
|April 1, 2014||$0.210||6 years, 75% reduction from 2008|
For the AWS public cloud, X = 50 percent when Y = 3 years, supporting my claim: Bezos’ law is the observation that, over the history of cloud, a unit of computing power price is reduced by 50 percent approximately every three years.
Clearly, cloud, as opposed to building or maintaining a data center, is a much better economic delivery approach for most companies.
And how can an enterprise datacenter possibly keep up with the hyper-competitive innovation from Amazon, IBM, Google and Microsoft? Enterprising tech pros know how this is going to play out. They’re way ahead in asking: “Why should we continue to saddle our company with a huge cost anchor called a datacenter or private cloud?”
It looks as though being a cloud provider isn’t going to be like a retail business when it comes to profits, but it may be too early to tell. It’s a bit like the x86 server business IBM recently sold to Lenovo. There will likely be innovation above the core cloud platform for a long time, which might alter the profitability outlook.
Opinions aside, the math doesn’t lie. It’s not question of if we’re moving to the cloud but how — and when.
Greg O’Connor is CEO of AppZero, which specializes in migrating enterprise software applications to and from cloud computing services. Follow him on Twitter @gregoryjoconnor.
Feature image illustration adapted from Steve Jurvetson/Wikimedia Commons
Source: RKG [download page]
Notes: Mobile’s 33% of Google search visits in Q1 2014 represented only a slight uptick from Q4 2013 (32%), but a more robust rise from 27% share during the year-earlier period. During Q1 2014, Yahoo actually saw a larger share (36%) of organic search visits come from mobile than Google. Overall, mobile devices accounted for an estimated 31% share of US organic search visits during Q1, up from 24% in Q1 2013.
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
Collaborators – Digital Profs
- Netflix vs Blockbuster - Perfect example of an industry replaced by a more efficient version of itself
- Coke vs Pepsi vs Dr Pepper
- Marketing Costs Normalized to CPM Basis for Comparison
- The JKWeddingDance video was real; the viral effect was MANUFACTURED - Post 1 of 2
- Samsung 52 inch HDTV $9.99 at BestBuy - purchase receipt below (6:21a eastern time August 12, 2009)
- Facebook usage by hour
- Moore's Law Gives Way to Bezos' Law
- The Grand Unified Theory of Marketing(tm) - Digital String Theory
- This Cornell Student Went From Sleeping In Starbucks To Investing In More Than A Dozen New Companies This Year
- Brand Advertisers: Escaping an Ecosystem of Digital Advertising Fraud
- #SESNY: Toward a Performance Mindset for All Advertising
- Tips for Marketers Selecting a Digital Agency
- Context Is Not King or Queen; It's Just Necessary
- 2013 New Year's Digital Marketing Resolutions
- The Good, Bad, and Ugly of Online Campaign Ratings and eGRPs
- Why You Should Banish the Net Promoter Score Immediately
- Digital Strategy To-MAY-to vs. To-MAH-to
- The Agency-Client Relationship is Forever Changed
- Targeting vs. Privacy - Who Will Win?
- April 2014 (86)
- March 2014 (247)
- February 2014 (167)
- January 2014 (222)
- December 2013 (167)
- November 2013 (111)
- October 2013 (116)
- September 2013 (214)
- August 2013 (210)
- July 2013 (200)
- June 2013 (87)
- May 2013 (87)
- April 2013 (70)
- March 2013 (114)
- February 2013 (89)
- January 2013 (136)
- December 2012 (96)
- November 2012 (130)
- October 2012 (147)
- September 2012 (94)
- August 2012 (93)
- July 2012 (112)
- June 2012 (71)
- May 2012 (82)
- April 2012 (80)
- March 2012 (122)
- February 2012 (114)
- January 2012 (129)
- December 2011 (60)
- November 2011 (54)
- October 2011 (29)
- September 2011 (17)
- August 2011 (30)
- July 2011 (18)
- June 2011 (19)
- May 2011 (23)
- April 2011 (23)
- March 2011 (52)
- February 2011 (69)
- January 2011 (108)
- December 2010 (82)
- November 2010 (67)
- October 2010 (68)
- September 2010 (44)
- August 2010 (101)
- July 2010 (61)
- June 2010 (28)
- May 2010 (28)
- April 2010 (26)
- March 2010 (33)
- February 2010 (21)
- January 2010 (12)
- December 2009 (4)
- November 2009 (2)
- October 2009 (14)
- September 2009 (6)
- August 2009 (19)
- July 2009 (34)
- June 2009 (11)
- May 2009 (4)
- April 2009 (6)
- March 2009 (13)
- February 2009 (32)
- January 2009 (25)
- December 2008 (1)
- October 2008 (1)
- June 2008 (1)
- November 2007 (1)