Amazon, Google, and eBooks: Retail vs Search
January 9, 2011
I read “3 Ways Google Can Succeed in E-Books.” Interesting. I sat on the write up and my initial ideas until I had more information from the Consumer Electronics Show. CES was, I hoped, going to provide me concrete information about Android-based tablets. Well, there were tablets. My hunch is that the success of the Android tablet may have something to do with the success of Google’s e-book initiative.
Based on our research into Google’s machinations disclosed in open sources, we think Google may have a steep hill to climb. Think of a 12 year old slogging up Mt. Kilimanjaro. The “climb” is a walk, and if you are not in reasonable shape, you will not make it to the summit with your collected works of Ernest Hemmingway.
First, the notion that Google must win over, cater to, or somehow leverage independent bookstores is a great idea—just one of those anachronisms like the Connecticut Yankee in King Arthur’s Court. Bookstores are in deep doo doo, and I am not sure how one wins over, caters to, or leverages the moribund. Not far from Harrod’s Creek, Kentucky, we have one independent bookstore. The goslings and I shop there in order to help the shop out. I see more knick nacks which is a sign post saying, “The margins for books suck. Buy an expensive book light.” Good luck to any analyst who wants to build a hedge fund on book stores.
Second, Google has lots of hardware partners. The challenge is to find a way to get those folks to behave like fire ants on the way to a meal. With Andoid 2.3 available as open source, the hardware folks may say, “Thanks. Don’t let the door hit you on the way out.” Think forks, fragmentation, and proprietary behavior. Maybe not today, but I see these clouds on the horizon. Amazon and Sony have at this time been aced by Apple in the hardware department, and Google has to find a way to deal with the reality of consumer electronics that generates substantive revenues. I suppose Google can start reporting in Amazon fuzzy units. Victory is for Google indeed possible, but online behaves in mysterious ways. Cheaper definitely does not work. Better maybe if style and cachet are the key factors. Faster. Faster may be out of the hands of the Google. Faster has been a mantra for a while, and, frankly, I don’t think I know what faster means. Some of Google’s nifty new services seem sluggish to us.
Third, online commerce was supposed to be a slam dunk for Froogle, now, Google Shopping. I use Checkout, but only after I check to see if Amazon has a better offer. The dust up over Google’s app stores and their functionality may be over, but there are some payment methods in place that work reasonably well and some of the payment schemes workwell and have a strong position; examples include Amazon, Apple, and the on again off again PayPal. Can Google become the go-to payment system? The go to shopping system for mobile users? The go to price look up system? The go to deal system for the Groupon crazed crowd? Lots of opportunities. How many have slipped away from the ageing GOOG.
Fourth, Google is late to the party. Now I know that The Art of War talks about sitting back and striking when the enemy is listening to iPod music after dinner around the apple wood camp fire. What better time to show up and slaughter the winners? Our interpretation of our research data suggests that Google is no longer very good in the 100 yard dash. Heck, when it comes to social media, Google is challenged getting up the front stairs to Frye’s in Palo Alto. I hear the heavy breathing and the chuckles from the Xooglers at Facebook. Google is 12 and slowing down. Examples of Google’s agility are welcome. Plug them into the comments form on this blog. Maybe Google’s new entrepreneurial organizational set up will toss faerie dust around? We hope so.
Fifth, lock in and habitual behavior are challenges for Google and its partners. Once habits are formed in online, those bowling ball gutters are tough to change. Google’s dominance in search is one example. Other examples include Netflix, iTunes, and Amazon in eBooks. Google can change habits by 10 step programs and rehab.
The question is, “Can Google take the right actions at the right time?”This question has greater urgency now because Amazon has opened its own Android store. I wonder if Mr. Bezos wants to be positioned to deal with this retail opportunity than a search-and-advertising specialist.
Stephen E Arnold, January 9, 2010
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Amazon Moves to Fill a Google Gap
January 6, 2011
The articles about Amazon’s up market Android store caught my attention. I found “Amazon Preps Up market US Android App Emporium” spot on. The story said:
Amazon is inviting Android developers to upload their applications for listing in a better class of app store, at a price set by Amazon and only available within the USA. The application store will launch later this year, but developers who sign up now get a free year before they have to start stumping up the $99 annual fee. For their money, developers get listed in a store that reviews every application submitted, and rejects the tat as well as the unstable or inadequately tested, but more importantly Amazon can offer access to shoppers who only dropped in to buy a book.
Seems harmless enough, but I don’t think it is a harmless move and I think this app store marks the beginning of more skirmishing between Amazon and Google.
Here’s why:
- Google, despite a ream of ecommerce patent documents and technical papers, is still breathing Amazon’s exhaust fumes in ecommerce. Amazon is just being Amazon or what I characterize as Bezosly. Moving quickly with only a modest incremental investment required.
- Google has not been able to get much traction for its own app stores. The Chrome app store seems like a close out at a Border’s book store. Not much excitement in my opinion. The Android app store is more lively, but the quality of the products make shopping as risky as buying from a street vendor in Cartagena, Colombia.
- Amazon is hedging its bets. Striking at the Google when it is not laser focused on value added software sales could ace Google out of a potentially hefty revenue stream. If one of those apps takes off, Amazon might step in and engineer a deal. As I said, a Bezosly move.
What will Google do? Gee, I don’t know. Read the book with a similar title.
Stephen E Arnold, January 6, 2011
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Exorbyte Explains Its Strengths
January 4, 2011
“What Makes Exorbyte Commerce So Good (The Nature of Ecommerce Search)” lays out the reasons why a good search tool is essential for any commercial website, saying, “Because of the ubiquity of Google with the Web, more and more people are actually using the search bar as their sole tool to navigate a website and find the product they’re looking for.”
I couldn’t agree more as I myself am not one to browse around, or heaven forbid, watch “animation or short movies” to find what I want to purchase. The post goes on to say that “It is imperative, in order to capture a sale, and in order to engender brand loyalty, for the search box to be error tolerant, extremely quick, and extremely user friendly.”
Obviously, Amazon figured this out a long time ago, but as the post points out, this type of super-sharp search “often runs into the five and six figures.” Not exactly within reach of even a medium-size site, but Exorbyte Commerce promises to provide this service without the exorbitant cost. An interesting approach, and one that sounds like it will provide the stickiness of the big-time to even a modest player online.
Alice Wasielewski, January 4, 2011
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Groupon Getting Searchified
December 29, 2010
If you take a turn to the West, you’ll find that the Groupon company has been busy. TMCNet reports on Groupon’s growth spurt in “Groupon Acquires Ludic Labs, Expands West Coast Headquarters.” Through Groupon’s Web site, people can find limited time deals exclusive to their town. They opened a new office in Silicon Valley and will be able to go from a staff of twenty-five to over one hundred in the coming year.
“Meanwhile, the acquisition of Ludic Labs should enhance Groupon’s talent pool and allow the company to continue to push its valuation to new levels. By absorbing Ludic Labs, the ever-evolving group buying site will bring on several of the company’s upper management personnel, including Paul Gauthier, co-founder of Inktomi, and David Gourley, who was the former chief technology officer at Endeca.”
What’s interesting is that while Groupon is expanding, they are also entertaining a buyout offer from Google for $5.3 billion. Rumors say that that the acquisition may pull through, but in the technology world who knows?
Stephen E Arnold, December 29, 2010
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Affinity Shopping and Free Choice
December 23, 2010
With the holiday shopping season here, retailers try to improve their e-commerce systems, including navigational ease and relevancy of products offered to buyers. Market Watch states in “Retailers Embrace Internal Site Search for Accuracy, Relevancy, and Profitability” that retailers have turned to the Aberdeen Group report: Retail E-Commerce Search: Accuracy, Relevancy, and Profitability in the Age of Choice to help them “address rapidly shifting customer affinities.” E-commerce system vendors underwrite the “free” and independent and objective analysis.
“Consumer and business analytics resources allow retailers to leverage the search process as a key customer touch-point. The more information taken into consideration regarding previous activity and site behavior, the more likely an up-sell will be. This saves time for the consumer and increases profitability for the retailer.”
By using customers’ analytical search data, retailers will improve their search results. Retailers are depending on this data to help increase their profit margins for this year. All I can say is get it quick after you take a wild and crazy survey with words like “affinity” in the questions.
Combine this with Google’s “contextual discovery” and shopping becomes something my great grandmother would not have recognized. Would she have made her own decisions about sox?
Stephen E Arnold, December 23, 2010
Exorbyte eCommerce Search
December 17, 2010
Move over Mercado and Endeca, Exorbyte is joining the ecommerce search arena and is making a grab for the little guy. The brief, informational overview video on Exorbyte’s Commerce Search details the main strategy behind this powerful search service engine.
It opens by explaining that the “name of the game is conversion rates”, i.e. tons of marketing dollars bring window shoppers to e-retailers, but the key lies in converting those browsers into shoppers. Unless that happens, all that marketing money spent getting the shopper to the site goes straight down the toilet. So Exorbyte has analyzed why people leave an online store without making a purchase and the number one contributing factor is that browsers cannot find what they want. To combat this issue, Exorbyte offers merchandising focused reporting features that take the functionality of Google Analytics a step further. These reports can tell you what people are actually searching for and more importantly, what queries are yielding no results so autocomplete fields can be adjusted accordingly.
Only slightly related, but I would be remiss if I didn’t also mention Exorbyte’s novel error tolerance capabilities. Spelling errors in search queries are a problem of the past.
What could be most amazing is you can have search implemented on your website within fifteen minutes thanks to the user-friendly interface. And, Exorbyte offers a 30-day free trial. Once you are pleased with the initial results, and Exorbyte is fairly certain you will be, you will begin paying a flat monthly fee based on the number of queries per month, starting at $119 for the littlest guys.
If you want to check out what Exorbyte’s ecommerce search can do on a live site, check out the example they provided in the video: www.onlynaturalpet.eu.
Sarah Rogers, December 17, 2010
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Online Shopping Reduces Hassles of the Mall
December 15, 2010
As reported on adage.com, Ad Age and Ipsos Observer recently conducted a survey studying the holiday buying habits of American consumers, and the results do not exactly bode well for physical retail stores as compared to virtual ones. The article detailed:
“Shoppers hunting for deals and convenience increasingly turned online during the Thanksgiving selling season. Coremetrics reported sales jumps of 19.4 percent on Cyber Monday, 9 percent on Black Friday and 28 percent on Thanksgiving Day when many retailers started rolling out their Black Friday deals early. These numbers far outpaced the nearly flat sales at physical store locations.”
Per the survey, daily discount websites such as Groupon provide incentive for shoppers to tarry off to the tangible storefronts in the name of getting a good deal. These sites will even hone on members specific interests based on location, demographics and input on interests. While this may seem like a silver lining for the brick-and-mortar locales, the article states that only the consumer is benefiting. “SymphonyIRI Group data show that coupons are not driving incremental sales. They are more likely to offer discounts to those already planning to buy, thereby cutting at the margins for retailers.”
Something else new to the shopping arena is the plethora of iPhone apps suited for this purpose, ranging from instant price comparison programs and barcode scanners to online coupon books, alleviating the need for printing and cutting. Easy just got even easier. So I guess with the internet, ‘the customer is king’ takes on a whole new meaning.
Sarah Rogers, December 15, 2010
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A Google Goof in Android Online Payments?
December 14, 2010
Yet another Google Goof or YAGG? Maybe.
I don’t use an Android phone. I have one. I don’t use the Android online store. I visited it once. I don’t use an iPhone. I visited the App Store and found it too much like a 1950s Warner Brothers cartoon. So, I am not in a position to comment about the features, functionality, or search systems in these stores.
I am able to read. I just worked through “Google’s Checkout ‘Failure’ Now a Big Problem for Android” and was surprised to learn that Google has a lousy payments platform for the Android. With 300,000 Android phones activating every time the sun rises, I was surprised.
Here’s one of the passages that caught my attention:
Most Android users, including me, just don’t buy apps. This stands in marked contrast to the culture of paid apps over at Apple or RIM. One of the fundamental reasons for this is the lack of Checkout adoption. If Checkout were widely penetrated among consumers, as iTunes is, there would be less friction in trying to buy apps. Other systems are being tried, including carrier billing in some cases. And now Rovio, maker of the wildly popular game Angry Birds, has vowed to develop an in-app carrier-billing payment system that bypasses Checkout. This is reportedly based on frustration over the limitations of Android billing. The company will also let third parties use the system as well.
The article asserts that Google may have to buy a company to get what it needs.
The questions that occurred to me were:
- Isn’t Google racking up a string of product disappointments?
- How much social capital does Google have? If problems persist, won’t that capital be depleted more quickly than it can be accrued?
- Will developers and customers just go some place else?
I don’t know much about Angry Birds. I do know about Angry Humans. At what point will pundits and poobahs assert that Google is broken when it attempts anything other than online search and ad injection?
Stephen E Arnold, December 14, 2010
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Search Hooks for Shopping Tuna
November 26, 2010
The outcome of a new survey presented in “More than half of top e-retailers personalize search results” details that 55% of the top e-retailers polled use technologies such as natural language processing, web analytics, mixed media searches, relevance ranking and segmentation tools to provide customers with more relevant search results. These e-retailers are dubbed ‘best-in-class’ in contrast to their peers, who fall into either an ‘average’ or ‘laggard’ category based on key performance indicators like net profit margin.
It isn’t headline news that employing more advanced search functions will aid in increased business. Notice that while 55 percent of the top e-retailers are using said technologies, the survey also shows that “44 percent of average performers and 15 percent of laggards personalize search results based on customer or customer segment purchase history.” With only a 10 percent difference between the top and average performers, could there be a stronger relationship in the results?
The article goes on to say:
“Top-performing e-retailers also do more with the search information they get. 73% have a process to disseminate results from search to relevant departments throughout the organization, such as marketing and merchandising. 32% of all other retailers surveyed had such a process in place.”
I’m inclined to believe that while offering a satisfactory shopping experience chock full of search bells-and-whistles will never hurt, the stats allude to a win for the marketing department, not the IT department.
Sarah Rogers, November 26, 2010
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Endeca Powered Interhome Goes Live
November 22, 2010
I visited Interhome’s newly relaunched website this afternoon at the urging of “Interhome.com: Easily find holiday homes (Guided Navigation)”. After a few minutes on the site it is no surprise that Endeca had a mouse click in this venture; Interhome.com is in fact sporting Endeca’s Guided Navigation search experience.
Drawing from a URL database and providing a faceted search, it takes mere minutes for any user to find a posh chalet in the perfect Swiss location and ensure it offers a dishwasher. Search is enabled through several different criteria including region, price, availability etc. One notable feature is that each offered home gains its own customized URL based on the user’s search terms. The real magic happens behind the scenes. The article said:
The URL of each page is rewritten based on user input and based on importance of the given refinement. i.e. someone may start browsing by not so search engine relevant terms such as say ‘dishwasher’. The URL will reflect that and show ‘dishwasher’ as variable. But if the next refinement is say ‘Switzerland’, a term that is way more relevant for Interhome’s search engine optimization efforts, the URL will be adapted accordingly and ‘Switzerland’ will be placed before ‘dishwasher’ in the result page’s URL.
I find the functionality to be nice, but not explicitly novel. Integrating the map aspect into the search does allow a break from having to cross-reference websites in the pursuit of the best getaway home locale, but it wasn’t enough to overcome some personal aversions. I actively avoid Facebook, and with the same hackneyed color scheme and “profile” layout, Interhome.com is the Facebook of vacation houses. But because I do love a good travel website and I recognize the profile format is useful in this application, my hope for Interhome is the search speed, precision, versatility and general lack of contest keeps others interested.
Sarah Rogers, November 22, 2010
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