discount

45% of Customers Influenced to Ditch Store by 2.5% Online Discount

Source: http://www.marketingcharts.com/interactive/45-of-consumers-influenced-to-ditch-store-by-online-discount-of-25-23027/

45% of customers would leave a store and buy a product online if they found it at a 2.5% discount while comparison shopping using their mobile device, details GroupM Next in an August 2012 report. At a discount of 5%, 60% of customers would leave, while at a 20% discount, 87% of shoppers would be […]

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Wednesday, August 22nd, 2012 news No Comments

Amazon Appears To Be Inflating The List Prices Of Some Discounted Items (AMZN)

Source: http://www.businessinsider.com/amazon-appears-to-be-inflating-the-list-prices-of-some-discounted-items-2012-2

 

Amazon Weird Pricing

You know how when you shop on Amazon there is a price and a then a “list price” which is usually much higher?

The effect is that you feel like you’re getting a big discount shopping on Amazon.

It turns out Amazon might be publishing list prices that are too high.

Mouse Print first noticed the problem with an array of general consumer products such as Kraft’s Mac & Cheese and a 100-count box of Splenda.

As if this afternoon, most of these prices have been fixed, except for a ton of pet food items.

Take for example the dog treats you see above. The retail value of one Merrick Flossies is approximately $4, making a 50-count supply valued at no more than $200. Yet Amazon claims the list price stands at a whopping $422.89, more than doubled what it should cost.

Click here to see more examples of Amazon’s wacky prices >

We tried to contact Amazon for comments, but did not receive a response.

The incident reminds us of last year when Amazon listed a seemingly normal book about flies for $23,698,655.93. Biologist Michael Eisen blogged about the unrealistic selling price, and documented how Amazon’s price for the book The Making of a Fly constantly went up day after another.

Here’s what happened: A professor required this book for a class and students naturally flocked to Amazon to purchase the text. Eventually, only two sellers still had the product available.

Because the book quickly became an exclusive, hot ticket item, Amazon’s algorithm for retailers to competitively price their product catapulted the retail value to more than $23 million.

We’re not sure if this is the same situation with the pet food offerings on the site, but it seems hard to believe the world is running out of doggie treats.

Deli Cat Dry Cat Food

Ok, we know having pets can be expensive but you can’t fool us, Amazon.

Higgins Celestial Blend Bird Food

Who can resist 89 percent off retail list price? Only ten left in stock!

Redbarn Filled Bone – Peanut Butter

Dog foods are getting so fancy these days, but at $6.70, the bone’s a steal.

 

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Wednesday, February 29th, 2012 news No Comments

Target Realizes There Are Only Two Ways To Compete With The Internet (TGT)

Source: http://www.businessinsider.com/target-realizes-there-are-only-two-ways-to-compete-with-the-internet-2012-1


Target

Target is sick and tired of customers who browse its stores and then go and buy products for cheaper prices from online retailers.

To reduce so-called “showrooming,” Target has asked its vendors to adopt one of two practices, according to the WSJ:

Last week, in an urgent letter to vendors, the Minneapolis-based chain suggested that suppliers create special products that would set it apart from competitors and shield it from the price comparisons that have become so easy for shoppers to perform on their computers and smartphones.

Where special products aren’t possible, Target asked the suppliers to help it match rivals’ prices. It also said it might create a subscription service that would give shoppers a discount on regularly purchased merchandise.

Target’s troubles with showrooming are shared by brick and mortar stores everywhere. Unfortunately small retailers may not have the clout to demand special products (see: Missoni) or help in price matching — and price matching without support from the supplier can be a losing proposition.

Don’t miss: See how big retails stores are spread across America >

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Monday, January 23rd, 2012 news No Comments

The Owner Of Flash Sales Site Rue La La Is Laying Off A Big Chunk Of Its Staff

Source: http://www.businessinsider.com/the-owner-of-flash-sales-site-rue-la-la-is-losing-up-to-half-its-staff-2012-1


rue la la

UPDATE: Rue La La has reached out to us to update the story with some additional information.

Rue La La just laid off 11 percent of its 500-person staff, according to the company.

The Boston Business Journal first reported the layoffs.

Site owner Retail Convergence is also shutting down SmartBargains.com, a discount shopping site, according to the report.

Some employees were offered other positions in the company, and everyone was offered some kind of severance package, a source close to the company told us.

“It was a mess upstairs. People were crying all over the place,” one unnamed employee told the Boston Business Journal. 

Rue La La operator Retail Convergence raised about $25 million from General Catalyst Partners and Breakaway Partners before being acquired by a company called GSI Commerce for $350 million, reports The Boston Business Journal.

eBay then bought GSI Commerce in 2009, and Rue La La got $500 million in debt and equity financing as part of the deal, according to the report. Retail Convergence, the owner of Rue La La and SmartBargains.com was spun out as part of that deal.

Here’s the full statement from Rue La La:

Since launching in 2008, Rue La La has transformed online shopping and has become a leader in the “private sale” shopping space.  In a continued effort to revolutionize off-price shopping, we have made the strategic decision to double down on our core business.  This heightened focus on our core includes the restructuring of our Rue Local business by outsourcing our sales force and consolidating SmartBargains.com into Rue La La. SmartBargains.com was originally launched 1999.  These moves unfortunately resulted in the elimination of some staff positions.  Rue La La has continued to see dramatic growth with nearly $300MM in sales in 2011 and similar growth planned for 2012 and beyond.

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Thursday, January 12th, 2012 news No Comments

This Retailer Is Doing So Well It’s Opening Hundreds Of New Stores For The Third Straight Year

Source: http://www.businessinsider.com/dollar-general-retail-expansion-2012-1


dollar general

Dollar stores are booming in a struggling economy, and one of the big boys of the industry is doing so well it’s planning another period of explosive growth, reports Gail Hoffer and Drug Store News.

It will open 625 stores and hire around 6,000 employees over the course of 2012. The discount chain already has about 9,800 stores spread across 38 states, and some of the new stores will be in previously unoccupied states California and Massachusetts.

Dollar General has adopted an aggressive growth strategy since the start of the recession. This marks the third straight year it has opened hundreds of new locations, and the chain has created more than 21,000 jobs since 2009.

It’s not all about the economy though. Dollar General had to be smart in its expansion strategy too — after all, Walmart is its biggest competitor, and the world’s largest retailer has had similar success recently.

It thrives on hitting markets that Walmart hasn’t taken over, such as small towns that can’t support one of Walmart’s massive big box stores. It also competes with the other big dollar store chains, like Family Dollar. The hybrid concept — somewhere between a giant discounter and a small dollar store — has worked admirably.

Plus, while dollar store marketing plays a significant role in getting people through its doors, Dollar General is actually also a clear leader in price over both Walmart and its dollar store compatriots.

NOW SEE: The 20 Brands With The Most Loyal Customers >

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Wednesday, January 4th, 2012 news No Comments

Here’s The Math Formula For Structuring A Groupon Deal That Doesn’t Lose Money (GRPN)

Source: http://www.businessinsider.com/heres-the-math-formula-for-structuring-a-groupon-deal-that-doesnt-lose-money-2011-12


groupon cupcake girl

We’ve all heard the nightmare stories about Groupon merchants who lost tons of money because they were suddenly overwhelmed with thousands of customers whom they were forced to serve at a loss: The British bakery that made 102,000 cupcakes. The Irish hairdressers whose customer base now consists entirely of people who only want their hair cut a discount. The Portland cafe that lost $8,000 because the owner failed to cap the number of deals she offered.

It’s not just Groupon, of course. There are loads of other daily deal sites — Living Social, Thrillist, Google Offers, etc — but they all present merchants with the same problem: The conflict between offering below-cost deals to customers in hopes of attracting long-term “regulars” and structuring a deal so that you can still make a profit. The math can be tricky because merchants have to account for two different sets of discounts: The discount to the customer and share of the payment taken by the daily deal site for publicizing the offer.

Now TheDealMix, a site that aggregates daily deals into an impressively complicated map of your neighborhood, has produced an infographic that can help businesses calculate daily deal offers so th! at they won’t accidentally go bankrupt.

And, yes, The DealMix has presented its formulas in the form of cupcakes — particularly useful given the number of bakery-related Groupon disasters that have made the headlines.

The formulas include:

Offer Price – Cost of Goods > $0

Average Customer Spend – Value of Offer + Price > Cost of Goods

See the rest of the story at Business Insider

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Monday, December 12th, 2011 news No Comments

Use Amazon’s Price Check App and Get Up to $15 Off Your Purchases [Deals]

Source: http://lifehacker.com/5865572/use-amazons-price-check-app-and-get-up-to-15-off-your-purchases

Use Amazon's Price Check App and Get Up to $15 Off Your PurchasesiPhone/Android: This Saturday, December 10 would be a good day to go shopping. Amazon’s offering 5% off (up to $5) for select items if you barcode scan them using its Price Check app; the offer can be used three times.

To get the discount, you’ll need to check prices on a qualifying item in one of these categories: Electronics, toys, sports, music, and DVDs. After putting it in your shopping cart with the Price Check App, you’ll have 24 hours to buy it (you can do it from the Amazon website or other Amazon apps) and get the 5% discount automatically applied.

As we’ve noted before Amazon Price Check is a really versatile price checking app you can use to look up products using your voice, photos, barcodes, or old-fashioned text search.

The promotion starts at 9pm PST December 9 and runs through 11:59pm PST December 10. So go download the app by the weekend, if you haven’t already.

Price Check for iPhone and Android | in the iTunes App Store | in Android Market


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Tuesday, December 6th, 2011 news No Comments

Why Loyalty Credit Cards May Soon Be A Thing Of The Past

Source: http://www.businessinsider.com/credit-suisse-retailers-loyalty-programs-2011-12


loyalty credit card

Credit cards have been a staple for retail rewards programs for decades (you know, like that Visa card they try to make you sign up for every time you go to Gap). They’ve been an effective way to reward customers, and for retailers to get additional funding.

But a new report by analysts Michael Exstein, Chrisopher Su and Trey Schorgi at Credit Suisse says that it’s time for retailers to abandon the credit card. Why are credit-based rewards programs not the right way to go anymore?

1. The cost of rewards programs keeps rising for banks. As rewards competition ramps up, issuer margins are pressured.

2. As the programs get more expensive, banks will offset costs in other areas. This will result in either less beneficial terms for retailers, or higher fees for consumers. Retailers may have to increase their own rewards programs to remain competitive

3. Retailers’ relationships with their customers could be hurt, because banks (who are now in control of many retailers’ credit businesses) could squeeze consumers. Since the programs are branded for retailers, not the banks, consumers would deem them responsible.

Credit Suisse instead suggests that the answer to these woes is simple. Switch over to programs based around membership fees or other upfront investments. “Going forward, we think the emerging trend will be the need for consumers to “invest” in loyalty programs, thereby creating a “vested interest,” says the report.

So what brands are doing it right so far?

Amazon — The Amazon Prime membership program has been vastly successful. Consumers pay an annual membership fee of $79, and get shipping benefits, free use of Amazon Instant Video and perks for their Kindle.

Costco — The largest membership warehouse club in the world has three levels of membership. There’s a $55 annual fee for businesses, a $55 ‘Gold’ card for individuals and a $55 executive member upgrade, which gives folks a 2% discount on most purchases.

Sam’s Club — Walmart’s warehouse subsidiary has a similar system, with a $40 per year Advantage card for individuals ($100 for Advantage Plus which offers extra savings) and a $35 per year Business membership ($100 for Business Plus).

Macy’s — “Thanks for Sharing” is a program that’s working for Macy’s to generate loyalty. It requires a $25 upfront investment (which is actually a donation to charity), in exchange for rewards.

Target — The REDcard is a ‘hybrid’ method which has been working well since the retailer started it up in 2010. It offers 5% savings on everything and includes shipping benefits.

These programs all capitalize on the concept of creating that “vested interest.” Customers, having already paid a set of promised benefits, will be more likely to keep spending to use those benefits that they’ve already paid for. They’ll keep coming back.

NOW SEE: The 20 Brands With The Most Loyal Customers >

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Tuesday, December 6th, 2011 news No Comments

This Bakery Had To Make 102,000 Cupcakes Because Of A Groupon Deal And Lost A Ton Of Money

Source: http://www.businessinsider.com/london-baker-makes-102000-cupcakes-groupon-deal-2011-11


need a cake bakery

A London bakery recently experienced the worst-case scenario of offering a Groupon for a small business, and it cost the owner thousands (via NBC Chicago).

Need a Cake bakery owner Rachel Brown decided to put up a 75% discount on a dozen cupcakes on the site, which dropped the price down to $10 from $40.

Apparently, people really love getting cupcakes cheap, because she was rushed by throngs of customers in a cupcake frenzy. 8,500 people signed up, and her crew of eight had to make 102,000 cupcakes to meet the orders.

Brown lost $3 per batch because she had to hire 25 extra workers to help, and she ended up losing $20,000 because of it, which a ton for a small biz. It wiped out her profits for the year, reports the Daily Mail.

“Without doubt, it was my worst ever business decision,” she told the BBC. “We had thousands of orders pouring in that really we hadn’t expected to have. A much larger company would have difficulty coping.”

This is just the latest in Groupon small business horror stories. A story popped up in September about a Portland cafe losing $8,000 because of a Groupon, which prompted a personal letter from founder and CEO Andrew Mason.

It brings up the always-present question about the daily deals site: does Groupon suck for small businesses?

Well, it looks like most small businesses think so. An overwhelming majority of 70% hate Groupon, if the latest survey from iContact is to be believed.

As for Brown and her bakery, the experience may have cost her 20 grand, but what about all the exposure she’s getting for her store? Great, right? It doesn’t hurt, but it probably wasn’t worth the cost.

Small businesses like this bakery thrive on relationships with their local customers, not crowds of outsiders coming in to snatch up a free lunch.

Getting new customers is great, but in this case, the bakery rewarded the wrong customers. Those 8,500 people that rushed for the Groupon probably won’t be coming back to pay for the same cupcakes at quadruple the price.

Only those the store has nurtured relationships with for a long time (in Brown’s case, 25 years), should be the ones rewarded. They’re the ones that keep coming back for more.

NOW SEE: The 10 Largest Family Businesses In The US >

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Tuesday, November 22nd, 2011 news No Comments

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.

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