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12 Dec
 
We’re always excited to discover new trends in retailer discounting. Usually there are similarities year-on-year, but an increasing number of websites we monitor have had unexpected discounting in 2014.  
 
As the festive season approaches, it seems that everywhere you look, food and decorations are on offer. Not only are these products discounted, most have a considerable amount of money knocked off, or a promotion such as ‘buy one, get one free’ running.  
 
But has full price ever existed, or are these offers a way of trapping the consumer into thinking they’ve got themselves a bargain?
 
Here at Competitor Monitor, we’ve tracked festive products such as Christmas trees, gift-wrap, cards, food and decorations over time, to offer insight into pricing changes during the run up to Christmas. Here are our findings:
 
  • Artificial trees are currently reduced by 50%, some even less than half price. By launching price history reports for several monitored websites, we can see that artificial trees were only sold at full price during August this year. The best time to buy is during November and December – pricing trends have shown that 50% offers only exist during these months.
  • We’ve tracked prices of Christmas cards on several monitored sites. Our data shows that there are currently discounts of up to 50% available, will full prices offered up until October.
  •  Christmas-specific gift wraps currently have a 30-50% saving depending on where you buy – most only stayed at full price until September.
  • Foods such as chocolate biscuits and Christmas puddings have had their prices slashed by 50% – research shows these items were sold at full price in August.
 
From the research above, it appears that the most cost-effective time to prepare for Christmas is later rather than sooner.
 
However, based on past indicators, prices will increase around 19th December, when people have less time to bargain hunt and are less conscious of how much they spend, giving retailers an opportunity to increase their prices. 
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08 Dec

 

At Competitor Monitor we always find some interesting insight in our data. This week we decided to dig into this data in a slightly different way, combining our existing information with some desk research. We thought we would share some results about the Holiday season.

As we all know, the holidays are a time of significant spending for parents and therefore a great opportunity for retailers. But what about the hidden costs in addition to the obvious?

Here are some findings from our research:

·      Food and gifts take up a large portion of a parent’s budget, with up to 80% spent on these alone in the run up to Christmas.

·    Despite Black Friday discounting and Cyber Monday deals, we have found that many of our monitored retailers have increased their pricing over the past few weeks on key items, toys being an obvious but significant one.

·    Tied in with the above, there is a lack of discounting across the board at the moment with very few retailers offering reductions in their lines.

·   Although fuel prices have lowered recently, due to the lower price of oil, our bespoke price monitoring for one customer has shown that train ticket prices remain high and there are no low-cost deals for travel until the New Year.

·     Visits to attractions such as a trip to see Santa Claus, are often unbudgeted expenses which are becoming more expensive year-on-year with the average attraction now costing £60 for a family of four, before factoring in food. Most families can only visit these festive attractions at weekends when prices are usually higher than during the week. An adult fee is even more expensive than a child’s – usually turning a fun family day trip into a pricey affair.

·     According to a survey conducted by a large supermarket chain, on average, parents will spend £312 per child this Christmas – and that’s only on gifts. From our own research, comparing prices of identical products on several of our monitored retail websites could lead to a saving of up to 60%.

 

We will be monitoring the products above to see how they change in price and availability into January. Feel free to reach out of you have any comments on this article.

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02 Dec

 

Although still a relatively new concept in the UK, Black Friday was anticipated to be the biggest and most successful shopping day in the British retail calendar this year.

According to reports, Boxing Day will be outperformed by Black Friday, as discounts and product quality have been higher due to a poor autumn, where retail sales slumped due to mild weather. Supermarket giant Tesco already expects that its Boxing Day sale will be beaten due to huge 70% discounts that were available in-store and online on Black Friday.

Fortunately, after a disappointing autumn, there has been a pre-Christmas boost to sales figures in the UK, where an estimated £810 million was spent by shoppers on Black Friday - £300 million more than projected.

In the USA however, shoppers spent 11% less than during the same period in 2013 and sales dropped from $57.4 to $50.9 billion. Earlier discounts during October, savvier sales shoppers and the money-worries of many consumers are possible contributions to this decline.

Traditionally, Boxing Day is one of the most successful sales in the UK. Yet as more and more retailers offer more permanent and frequent discounts, shoppers are no longer waiting post-Christmas to grab a bargain, potentially killing off the Boxing Day sale.

With that said, it becomes much harder for retailers to gain insight into competitor activity. Promotions are more sporadic and not all retailers offer their most competitive prices at the same time. By monitoring retailers and their competitors, Competitor Monitor can help companies understand more about pricing and promotional trends, whether during a sales period or on a day-to-day basis, offering full visibility and the opportunity to gain a competitive advantage in the marketplace.

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21 Oct
High-end retailers are famous for being intimidating and supercilious. Whether it's a cultural artifact or an actual reality, the perception exists that high-end stores tend to treat customers poorly, especially if they are not immediately wealthy. Conventional marketing wisdom would say that this is a terribly negative strategy, and that the better customer service a retailer provides, the happier the customer will be, and the more likely they are to purchase from you again. Surprisingly, a new study that will be published in an upcoming edition of the Journal of Consumer Research by Darren Dahl has found that when it comes to the highest of the high-end retailers, the opposite is true.
 
Yes, you read that correctly - as long as a brand is perceived to be a luxury high-end brand, customers actually respond more positively to being treated poorly by the sales staff. At least, it's 'positive' when it comes to the bottom line of the retailer's books.  According to the paper, "Rejection by a brand increases consumers' desire to affiliate with it, and they do so by increasing their willingness to purchase, pay for and wear or display items from the rejecting brand." This is incredibly counterintuitive, but it seems to only apply to high-end brands. If the brand or retailer is considered to be cheap or budget, then the effect of poor service is completely different.
 
Additionally, the effect doesn't seem to apply equally to everyone. Dahl was quoted as saying, “Our study shows you’ve got to be the right kind of snob in the right kind of store for the effect to work." In other words, the more you idealise a certain brand, the more likely you are to respond favourably to being rejected by it, which is completely counterintuitive to traditional marketing wisdom.  

In the no-holds-barred world of retail, where a tiny competitive advantage can be the difference between success and failure, it will be interesting to see how various retailers attempt to capitalise on the results of this study. Even more interesting will be possible applications in the world of e-commerce. When it's impossible to assess a customer's potential net worth and spending habits  simply by looking at them as they walk through the front door of a shop, we may find that the 'big data' on our shopping habits being compiled by various retailers is sold and consolidated to form a sort of digital buying power scale. But will customers allow it? Only time will tell.
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13 Oct

When Online Goes Offline

Posted by Toni
The e-commerce revolution has sparked a number of major changes in the way customers interact with businesses. Massive changes in the way they browse, in the way they shop, and in the way they expect their entire transaction experience to go. One of the unintended side effects of these changes has been the shuttering of brick and mortar stores in favour of investing more resources in the digital side of the sales and fulfillment process. As we discussed in a recent post, brick and mortar stores are closing left and right as pressures on margins, overhead and bottom lines become even greater than they have been in the past. Recently, as in the aftermath of most sets of chaotic circumstances, a new pattern has begun to emerge. Instead of offline businesses moving online, a reverse trend has finally begun to establish itself, as traditionally online only companies begin to see advantages of having physical locations.

Arguably, Apple began to pave the way for this when they first took their successful online store offline, and opened the very first Apple Store location in the brick and mortar world. It was a runaway hit, and proved that there was possibility for online stores to make successful forays into the material world. Admittedly, Apple has some of the most fanatical customers of any brand in the world, and those customers tend to have relatively high incomes (or at least the willingness to spend their disposable income at said Apple Store), however the mold was broken and the floodgates may now open. Amazon is apparently gearing up for a pilot test of an offline brand to be known as 'Pantry', in an effort to compete with so-called 'big-box' stores like Walmart and Costco in the United States, and if they can also make it work, then the model has definitely been proven.

North America isn't the only region where online giants are eagerly eyeing the offline sector, however. In China, the popular competitor to Amazon.com known as Alibaba, which has been making headlines all around the world with rumours of a Western IPO and a renewed North American sales focus, is also seriously expanding its ability to conquer offline markets. One of the largest Chinese department store companies, Intime Retail, has recently accepted an investment from Alibaba of over £415 million, giving them a significant advantage over their rivals. As often as Alibaba and Amazon are spoken of as direct rivals, it's interesting to see how much more quickly Alibaba appears to move on its projects - Intime had already inked a deal with Alibaba to use their mobile payment affiliate system, Alipay Wallet, something that Amazon has only spoken of deploying as of yet. It will be interesting to see in the coming years how the two go head to head, as a clash of the e-commerce titans seems more and more inevitable.
 
To learn more about business intelligence and competitor monitoring, whether you're Amazon-sized or just starting out your online business, visit us for a free demo of how we can help you stay ahead of your competition.
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30 Sep
It's an almost unavoidable fact that the e-commerce world moves at the speed of light - thanks to fiberoptic global communications, this is literally true. But even figuratively, the e-commerce world is a constantly shifting landscape of innovation as retailers large and small move to counter the advantages gained by others, while increasing their own competitive ability and marketing position. Competitor tracking is one of the most essential elements of the online retail world, and allows even the smallest businesses to stay abreast of the latest retail tactics.

The latest concept that's taking the retail world by storm is presented as a solution to the competition between online and offline markets: omnichannel retailing. Channels, as most retailers are aware, is simply another way of describing ways of interacting with customers, whether it be via email, websites, mobile browsing, or brick and mortar store foot traffic. In a world that was struggling to adapt to the sudden rise of e-commerce, channels were becoming increasingly fragmented, with the left hand not knowing what the right was doing, so to speak, more often than not, as websites and stores offered different deals, different prices, and in some cases even different products. Needless to say, this was a growing hassle for both retailers and customers alike.

Omnichannel retail solves all those discrepancies by stressing the essential nature of a consistent experience for customers, no matter how they choose to interact with a business. Unlike many buzzwords, this one appears to have gained real traction in the business community, as evidenced by the recent "First Annual Symposium on Omni Retailing", held in New York City at the Fashion Institute of Technology.

While the focus of the symposium was on fashion retail and how it can be enhanced by using omnichannel retail strategies, it makes perfect sense that fashion retailers would be at the forefront of a distributed but consistent retail experience, as many shoppers who browse fashion online are still unwilling to purchase without actually trying the final product. Lending some serious weight to the event was the speaker list, which included representatives from Microsoft, Birchbox, and The Boston Consulting Group, as well as a keynote address by Peter Nordstrom, from the retailer of the same name, a real coup for the event organizers as he rarely speaks at any sort of event.

In a world dominated by multiple channels, the true competitive advantage will be held by those who can deliver consistently excellent experiences to customers, no matter how they choose to interact. Getting in on the ground floor can ensure your business stays ahead of the curve, instead of behind the eight ball.
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27 Sep
Much comment has been made about the recently booming Chinese online retail market, which is forecasted to double in size each year for all the years that projections have currently been made. The potential of the market is truly incredible, and it shows every sign of meeting or exceeding the forecasts that treat it so glowingly. It should come as no surprise, then, that Chinese consumers are embracing the e-commerce experience with such open arms, as they're an integral part of the engine that's driving the retail boom.

According to a recent report that was released by the Shanghai branch of PricewaterhouseCoopers, the Chinese consumer turns to online shopping at a much higher rate than the average global consumer does. One in seven people buy something online every single day, and 60% of the population buys something online at least once a week.

While this is quite impressive in and of itself, there are some other habits of the Chinese consumer that differ somewhat from the Western perspective we've come to have on e-commerce. For instance, their near-ubiquitous adoption of mobile devices is on par with the West, but they use their devices for shopping at a far greater rate than the rest of the world, with nearly 25% of all those polled shopping using their mobile device to shop at least once a week, more than double the global average which clocked in just shy of 9%.

The typical Chinese consumer also seems far more likely to use a social network or company-hosted review site to leave feedback and reviews of their purchases than the global average, whether positive or negative, which creates a much more complete perspective for other potential customers on which to base their purchasing decisions. More than 90% of the polled Chinese customers in the PwC study indicated that they leave feedback online about their purchases, compared to the global average of just 55%.

Even as omnichannel shopping is growing as a common phrase in boardrooms and planning offices in Europe and North America, so too does is it become crucial in China, as the traditional brick and mortar store is forced to adapt to the incredible pace of the online markets. Considering the incredible success of m-commerce in China, it will be very interesting to see how offline retailers deal with the problems of showrooming and omnichannel solutions, and may provide a testing ground for successful strategies to be implemented elsewhere around the world.
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19 Sep
The e-commerce world has always been a rapidly changing one. As little as 10 years ago, it was still a relatively new thing to many people in the Western world, and not necessarily entirely trusted by many who were yet to adapt to the technology. But as the ease of use and availability of items increased, so too did the general public's desire to embrace the new phenomenon, and naturally retailers followed suit. Fortunately, the entire backbone of internet access was well-established in the West by this point, and when coupled with the credit card systems that had been in use for decades, the stage was set for e-commerce to take the retail world by storm. But what about the rest of the world?
 
As the idea of globalized e-commerce begins to become a viable reality, any number of hiccups are being encountered by retailers hoping to reach emerging markets. Global logistics and supply chain issues have been dramatically improved over the last decade, but they're still not guaranteed, and the same type of issue often applies to payment processors. In many nations around the world with comparatively wealthy populations such as Russia, credit cards are still not widely embraced (though with the sheer amount of credit card fraud going on in the world, it's not too difficult to understand why).
 
This presents a fairly serious problem to retailers, however. Some have worked out clever ways around this problem, including the Russian competitor to Amazon's localized shipping depots where customers can pick up items and pay cash, or in some African nations, cash-on-delivery systems have been implemented. Both of these put all the risk in the hands of the retailer, however, and while that may reassure the customers somewhat, it doesn't always encourage foreign investment in online merchants.

In many parts of the world, however, an interesting march of technology has taken place. Throughout Africa and many parts of Asia, landlines and hardwired access has been leapfrogged by mobile phone technology. Enterprising payment processors, recognizing the possibilities of leveraging the already established mobile phone payment systems, have begun to partner with retailers to build an entirely different model of e-commerce that takes advantage of the ubiquity of mobile phones. As this trend expands and more and more customers grow comfortable with the safety and security of these methods, expect to see a sudden and rapid growth in the e-commerce markets of every nation around the globe.
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16 Sep
One of the most celebrated trends recent in online retail websites has been the functionality that allows customers to post reviews of the products being sold, as well as reviews of the retailer itself. All sorts of hassles and unexpected problems have been avoided just by allowing customers to post comment and interact with each other, and by allowing the retailer's customer service team into the conversation, customer confidence and satisfaction has skyrocketed. However, auction sites like the ubiquitous eBay that started so much of the online shopping revolution, coupled with the growing popularity of market-bazaar sites like Alibaba that simply act as platforms to connect merchants and customers, the question must be asked: should retailers be able to start reviewing customers?
 
At first, it may seem like a ludicrous idea - nearly impossible to keep track of and ensure there is no potential for abuse. But these same issues were raised during the introduction of the buyer's ability to rate sellers, and of the entire online customer review concept, and now those elements are staples of almost all e-commerce sites. eBay in particular has a problem with this, given the nature of the system. If a user wins an auction and then simply doesn't pay, the seller has absolutely no recourse when it comes to alerting other sellers to this problem customer. Curiously enough, sellers are able to leave positive feedback about transactions that went smoothly, but don't have the option to mention anything negative if the customer fails to send money or causes some other type of problem.

There is much to be said for the idea of protecting customers from the wrath of an angry merchant. At first glance, the power dynamic appears to automatically favour the merchant. After all, they have a business to run and seem to gain trust simply by virtue of the fact that they are merchants - but as the line between sellers and "trustworthy brands" continues to blur thanks to the digital empowerment of a single individual to run a fairly large business online, and as fraud and abuse seem like daily facts of life in the digital world, it only seems fair that protections for merchants evolve at the same time as protections for customers. This is especially true in the emerging online markets that often have higher instances of fraud and other dubious transactions, and that element is likely going to become more and more apparent as these markets mature.
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13 Sep
When talking about online retail, the news is generally positive. After all, most markets around the world are posting incredible growth numbers that vastly outpace the statistics in comparable offline sectors, and in business news (unlike most news), the tendency is towards positive reports that keep everyone upbeat about the stability of the economy. It's impossible to ignore the fact that there is a bit of a dark side to all this growth - many brands are closing a huge number of brick and mortar stores, which throws a number of other connected markets (real estate, for example) for quite a loop.
 
The trend in brick and mortar closings isn't exactly new. Back at the beginning of the e-commerce era, when people still used the phrase 'dot coms', highly successful book shop Barnes & Noble was already beginning to feel the pressure from Amazon's initial forays into the book market. Eventually, Barnes & Noble got its act together and invested in a serious online presence, but not before they had closed an astonishing number of stores in a remarkably short time, including their New York City-based flagship location. The element that makes this continued phenomenon strange is now the types of stores that are closing.
 
24/7 Wall St. reports that of the brands closing the most stores in the United States, 3 of the 5 are clothing retailers, which perfectly highlights the growing success of fashion retailers who have moved towards online shopping in recent years. The retailer closing the second-highest number of stores is the aforementioned and beleaguered Barnes & Noble, and the other is Office Depot, although this last is largely due to a merger than any sudden shifts in online sales success.

Interestingly enough, across the Atlantic in the United Kingdom, it appears that this American trend isn't holding true. In 2012, nearly 1800 shops closed on high streets throughout the UK, which is a staggering 20 closings per day. Last year's numbers, however, had shrunk so dramatically as to be considered 'normal', down 80% to only 371 closings for the whole year. However, this is still the third year straight that has posted decreases in the number of brick and mortar stores overall, which indicates that even though the initial shock of the online retail switch may have passed, it's not likely reverse itself unless retailers can come up with better reasons for customers to visit brick and mortar locations.
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10 Sep
Mobile commerce, or 'm-commerce', has long been a sort of holy grail for e-commerce retailers - tantalizing, but nearly impossible to find successfully. A number of different approaches have been tested to solve the problem, but there haven't been many runaway successes as of yet. However, as the market begins to mature, we are finally reaching a point where there is actually enough data to begin a data-driven analysis of what is working and what isn't, over larger product areas than a single company can provide.
 
A recently released Experian Marketing Services analysis report took a look at the online purchasing trends among Americans in 2013, but subdivided this fairly typical question by the specific type of device those customers used to make their purchase, and the results were fairly interesting. Perhaps unsurprisingly, over 50% of Americans bought books, clothing, or electronics online last year - although on reflection, perhaps that is a bit surprising after all, simply for being somewhat lower than one might expect in such a hyper-connected era.
 
Among the most interesting tidbits was the fact that nearly the same number of users (roughly half of those polled) purchased clothing and fashion accessories on a tablet as those who did their shopping computers, compared to just over a quarter of those who owned smartphones. This is likely a testament to the much larger screen sizes afforded by tables, but the intuitive possibilities of gesture and swipe controls for creating interactive catalogs that just feel clunky on a computer can't be ignored. Tablets haven't quite caught up to desktop computers when it comes to purchasing electronics, with only 41% of tablet owners making such purchases via their tablets. Naturally, books are one of the areas that tablets completely dominate the market, thanks to devices such as the Kindle Fire and the iPad. The same is true of music, games and other apps that have long been the province of the mobile market.

The most interesting thing about tablets and their emerging popularity is the way they start to blur the lines between mobile devices and traditional computers. As tablets grow more and more powerful, the lines will blur even further - except in one major respect. Many customers bring their smartphones with them everywhere, and frequently use them to find store locations and use price comparison tools in store, which is a difficult thing to do easily with a tablet, as they tend not to fit comfortably into pockets. Fortunately, brick and mortar retailers aren't likely to ever have to worry about tablet showrooming - but who knows what the future may bring?
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01 Sep
One of the most interesting things to watch as the e-commerce revolution begins to come home to roost is how the various companies involved cope with and adapt to issues that many brick and mortar retailers don't have to deal with. The primary problem, of course, with buying something online is actually getting the product into the hands of the customer. When e-commerce was just starting to take off, this was a frequently dodgy process, and was a leading cause of customer dissatisfaction. As retailers are beginning to discover, the problem of logistics has now begun to manifest in a different direction, as industries such as clothing and fashion accessories that were initially unable to find a foothold online are becoming more popular: the dreaded return policy.
 
As these industries broke into the e-commerce arena, one of the marketing tactics that most effectively swayed hesitant customers into a purchase was the prospect of easy and hassle-free returns. Customers embraced the idea, and for a while all was well - until online retailers discovered that a huge number of their customers were taking advantage of the policy to use their own living rooms as change rooms to model their purchases and then returning a huge portion of them, all on the company's dime.
 
Complaining that these chronic returners were costing the industry billions of dollars every year, various strategies were floated to combat the problem, but of course they were all rooted in big data, the wealth of customer information available to online retailers. Some retailers began to only include free shipping on certain products which are less likely to be returned, and some were simply revoking free shipping for customers who returned too often, and some have floated the idea of restocking fees on returned items to cover the cost of returns.

But like most solutions involving customers, it's a better choice to reward the actions that you want them to take rather than adopting punitive measures against the customers who abuse store policies. Instead of revoking access to the juicy deals and helpful policies and risk driving away customers or creating negative perceptions, it's better to adopt new strategies to reward customers with low return rates, or at least those with a desirable purchase-to-return ratio. After all, if a customer returns 10 things but buys 50, the costs of processing the 10 returns pale in comparison to the profit generated overall. Big data, that most fantastic tool of the online retail world, tends to offer the answer in the online world - the challenge lies in combining its findings with more conventional marketing wisdom.
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29 Aug
In the discussions we've been having recently about the BRIC economic bloc and its incredible rise through the ranks of global e-commerce, we've yet to mention the 'R' - Russia. Russia's economy hasn't been immune to the global financial calamities of the last 5 or 6 years, and their economy is still in a general slowdown phase, but in spite of that, online shopping increased by an impressive 26% last year, reaching a respectable $14 billion US dollars - 510 billion rubles. The truly incredible thing, however, is that the Moscow-based e-commerce analysis firm Data Insight projects that figure may double in size by next year, which beats most other growth figures hands down (with the possible exception of China).
 
Leading the charge of this trend towards e-commerce and online retail is an retail giant completely unknown in the West named Ulmart. Originally making its name as an online computer parts and consumer electronics retailer, it has recently dramatically expanded its offerings into most other sectors of the home-oriented market, including appliances, textiles and general purpose hardware and tools.
 
However, this burgeoning market is naturally attracting the same sort of speculative interest from the current world giants Amazon, eBay and Alibaba, who have a considering competitive advantage in the marketplace - or so it may initial seem. The chairman of Ulmart, Dmitry Kostygin, is completely unworried by the prospect of competition with Amazon, saying "In this market, Amazon has no chance." He may well be on to something, considering that the majority of Russians still tend to want to pay for things in cash instead of relying on credit cards - the number of fraud schemes in the West that originate in Russia and Eastern Europe may have contributed to this wariness.
 
This highlights the strength of the Ulmart distribution model, which has already implemented from the ground up a number of features that Amazon has only recently been exploring. Ulmart operates its own fleet of delivery trucks, for example, which Amazon only started experimenting with in a few limited pilot projects in late 2013. Ulmart also focuses on allowing customers to shop online, but then typically has orders delivered to one of three major urban warehouses, or one of over 250 more locally distributed locations where customers can pick up their purchases in-person, obviating the need for use of a credit card.

It's very difficult to ignore the power of the juggernaut that Amazon's online retail business has become, however, and Amazon may simply be willing to outspend Ulmart for domination of the available marketshare. The
price comparison algorithms that have made Amazon such a success also have yet to be tested against the convenience of the Ulmart distribution model, and Amazon may view Russia as the perfect testing site for their own similarly competing system.
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22 Aug
Logistics has always been the largest stumbling block when it comes to a smooth online shopping experience. No matter how well crafted a website is, and how minimal its shopping cart abandonment rates are, if the supply chain that actually gets the product into the customer's hands is flawed, the customer is going to come away feeling like the process was flawed on the whole. Increasingly, major online retailers like Amazon, and their growing competition from Google in the online shopping world, are removing as many human links from the logistics supply line as possible.
 
Ever since Amazon pulled a flashy publicity stunt right before Cyber Monday by announcing a long-term plan to employ automated drones as a delivery system, there has been an increased focus on the role of automation in the logistics back end. Robotics, on the whole, generally doesn't have much traction with the average consumer. Consumer robotics are clunky, over-priced and generally not up to scratch when it comes to doing things by hand. However, in a highly controlled and consistently cataloged environment such as a warehouse, seemingly clunky algorithms suddenly blossom into incredibly useful tools for models of efficiency.
 
Nothing highlights this better than Amazon's recent acquisition of Kiva Systems, a manufacturer of industrial robots designed specifically for warehouse conditions. Amazon previously operated as a customer of Kiva Systems, but decided to simply buy the entire company outright for $775 million USD in cash - their second-largest acquisition in the history of the company (second only to the Zappos.com buyout in 2009, at $847 million USD). Kiva's robots are found in the warehouses of other major retailers as well, such as Staples and Saks, but there's no word as to whether or not they're going to have to go elsewhere for their robotics solutions.

There has long been some trepidation among the general workforce about the idea that robots are replacing humans in manufacturing and logistics positions, but it's a simple economic fact that most consumers are going to prefer a product with a lower price - or failing that, companies are going to prefer the highest profit margin - and there's no denying the increase in productivity that automation provides. In the highly competitive world of online retail, every competitive advantage must be implemented in order to stay ahead of a never ending line of competitors hoping to gain market share, and even since long before Henry Ford's assembly line, automation has always been the key to staying ahead of the game.
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16 Aug
Perhaps the most intriguing loopholes in the e-commerce world is the widely varied way that sales taxes are applied. In much of North America, purchases made from a business located outside of the country or, in many cases, even outside the same state or province, are exempted from sales tax in either location. In the EU, the situation is slightly different, with Value Added Tax (VAT) being calculated based on where the seller is located. This has had significant impact on where many corporations choose to establish their home offices, with Luxembourg being one of the most popular choices thanks to its relatively minor corporate taxes and low VAT rates, which allows companies to offer lower overall prices to the consumer. However, recent changes to how VAT is applied to digital products stand to shake up the current system, and put millions into the tax coffers of nations that have so far been shortchanged.
 
The new rules, which apply to the retail prices of digital products such as telecommunications and digital products such as apps, e-books, and even cloud-based data storage services, will shift the location where VAT is applied from the company's location to that of the consumer. While these changes have been in the works for some time, many companies have taken full advantage of lower VAT rates, among them tech giants such as Apple, Microsoft and Amazon.
 
Interestingly, one of the most affected markets may be a surprising one: e-books. E-book retailers are almost exclusively located in Luxembourg, thanks to a VAT rate on the product that is as little as 3%. Just considering the e-book sales made by Amazon alone, the VAT reform would net the government in the United Kingdom upwards of tens of millions of pounds. In the other affected markets, the impact will be significantly less, as the VAT rates of the two countries vary by much smaller margins, averaging near 5% difference. Both Microsoft's XBox games division and Apple's iTunes division are also both based in Luxembourg, however those markets are yet to come close to the current scope of e-book sales.

Unfortunately, of course, most companies aren't likely to take the VAT hit to their profit margins lying down, and will wind up passing on some or all of the adjusted cost to the customer. However, it's likely to give a boost to companies that don't have the luxury of locating themselves in a particularly low VAT jurisdiction, allowing them to compete more fairly in the marketplace of retail prices.
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