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January 06 2014

The return of local retail?

About a month ago, IBM published its five tech predictions for the next few years. They’re mostly the sort of unexceptional things one predicts in this sort of article — except for one: the return of local retail.

This is a fascinating idea, both in the ways I agree and the ways I disagree. First, I don’t think local retail is quite as dead as many people thought. Now that Borders is no longer with us and Barnes and Noble is on the ropes, I see more activity in local bookstores. And the shopping district in the center of my town is full; granted, we’re talking reasonably prosperous suburbia, not Detroit, but not too many years ago there was no shortage of empty storefronts.

What surprised me was the reason IBM thought local retail would return. They observed that many of the same techniques that Amazon and other online retailers use can be applied locally. You walk into a store; you’re identified by your cell phone (or some other device); the store can look up your purchase history, online history, etc.; it can then generate purchase recommendations based on inventory; and send over a salesperson — with an informed view of who you are, what you’re likely to buy, and so on — to “help” you.

Well.

I like walking through local stores to see what’s there, and I even buy stuff in local stores (though, no doubt, not as frequently as they’d like). And I almost never want sales staff coming over to “help” me. I’ll ask if I need help. And I’d certainly find it more than creepy if salespeople came over and already knew what I was looking for, and made helpful suggestions about what I’d like to buy. I’d be more likely to leave than to give in to the upsell.

Some years ago (when Amazon was only a gleam in Jeff Bezos’ eye), I observed that local retail was dying in part because local retailers had given up. Stores didn’t sell what you needed, and customer service was awful. I remember setting up my home office and having trouble finding a business supply store that would sell me a desk or a chair — or, for that matter, a 3-hole punch or a case of copy paper. They had plenty of stuff on the shelves, but it was mostly greeting cards. (Why greeting cards in office supply stores? Don’t ask me…) And yes, “awful customer service” includes the obnoxious salesperson who won’t leave, even when it’s clear the store doesn’t have what you want. No wonder Staples ate their lunch. Staples will even carry the case of copy paper out to the car for you.

If there’s going to be a revival in local retail (and I believe there is), it won’t be by becoming more intrusive and obnoxious. It will be by getting back to basics: well-stocked stores that have merchandise that meets customers’ needs, and good service to help customers find what they want without being intrusive, to handle issues like returns efficiently and politely, and even to haul your stuff out to the car.

Unfortunately for IBM, the retailers won’t need Watson to do that.

May 24 2012

Commerce Weekly: Facebook continues its mobile acquisition spree

Here are the commerce stories that caught my attention this week.

Facebook acquires social gift-giving app Karma

Karma iPhone ScreenshotThe media focus on Facebook's IPO might be missing the point — as Michael V. Copeland points out in a post at Wired, the IPO is really about the cash Facebook now has on hand to continue its acquisition spree. And that's just what it did. On the heels of the market's closing bell last Friday (May 18), Facebook announced its acquisition of Karma, a mobile ecommerce app that facilitates social gift giving — what some analysts are calling the next big mobile commerce boom.

IDG News' Cameron Scott points out in a post at PCWorld that mobile is where Facebook needs to focus now, as "it currently generates less revenue per user [in mobile] than it does on the desktop." He notes that Karma already is integrated with Facebook and describes how the app works:

"Karma allows users to buy gifts from its catalogue from their mobile phones. Recipients receive a text message notifying them of the gift and directing them to a website where they can exchange it if they want to and enter their shipping address."

Chris Preimesberger over at eWeek.com reiterates Facebook's need to "monetize interaction with its subscribers in better fashion on mobile devices" and provides a nice roundup of Facebook's mobile-related acquisitions to date.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

If you can't beat "showrooming" ...

Raise your hand if you've showroomed. I'm certainly guilty, and much to retailers' dismay, this type of shopping behavior is becoming more common. Mobile Commerce Daily reports this week on a new study from the Interactive Advertising Bureau (IAB) that shows "53 percent of mobile commerce users have stopped an in-store purchase as a result of using their mobile phone." Joe Lazlo, senior director of the Mobile Marketing Center of Excellence at the IAB told Mobile Commerce Daily the practice of showrooming isn't likely to go away:

"Mobile shoppers today use their mobiles to save them time or money or both — mobile shopping helps make them more efficient. And since we all love to make the best use of our time and money, these kinds of behaviors are likely to spread and become mainstream really quickly.

"Fighting this trend is certainly going to be a losing strategy, so I predict that savvy marketers will learn to live with, and even court, these newly empowered consumers, who can and do leave a store if they discover a better deal somewhere else."

Staff contributors from McKinsey & Company call this situation a "retail store apocalypse" in a post over at Forbes. The group says, however, that "showrooming shouldn't be a show stopper. These digital shoppers are ready to buy. Excelling at multichannel sales is today's must-have capability, and retailers must adapt if they want to survive." They offer seven practical strategies to avoid succumbing to the apocalypse. Some highlights include establishing your store as an authority on your products, making use of data — or learning to — to better target consumers on an individual level, and re-imagining the role of your retail store as more of a service hub. You can read more on these ideas and their other suggestions here.

Mobile disrupts the grocery store checkout line

Stop & Shop iPhone ScreenshotMore and more, consumers are incorporating mobile into retail shopping, but what about grocery shopping? According to Kunur Patel in a post at AdAge Digital, the focus of mobile in grocery stores has more to do with in-store shopping behavior and convenience rather than online grocery competition. She points to loyalty program company Catalina Mobile and describes how it's testing the mobile grocery shopping waters, in part by targeting the big grocery store dice roll — choosing the fastest checkout line. Patel writes:

"[Catalina Mobile] is behind mobile apps in 110 of Ahold USA's Stop & Shop stores in Massachusetts, Rhode Island and Connecticut. Here's how it works: A shopper walks into the store, opens the store-branded app and receives offers based on their shopping history. To skip the line at checkout, shoppers can scan barcodes of items they put into the cart to buy the haul right on the phone. Catalina says the app will be available in 200 more Stop & Shops this summer."

Patel also highlights Coupons.com's app Grocery iQ:

"Shoppers create lists in the app by scanning barcodes or typing in entries, then the app organizes those items by aisle. The most recent [app] update ports coupons into the search tool so that, say, a shopper may add one brand of yogurt to the list over another because Coupons.com offers 50¢ off."

Unless the consumer is shopping at a participating store with a loyalty card that syncs with the app, the coupons will need to be emailed and printed.

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May 10 2012

The reinvention of the bookseller

This post originally appeared on Publishers Weekly.

Books Etc Victoria by markhillary, on FlickrIf you're a brick-and-mortar bookseller, does your blood pressure rise when you think about e-retailers and their deep discounts? Do you look at ebooks as a threat or an opportunity? Depending on how you answered those questions, you might need to ask yourself another one: What business are you really in?

If you're simply in the business of "selling books," I believe you're thinking too narrowly. Think of the story of the successful tools salesman who explained why he was able to sell so many drills: "My competitors sell the drill while I focus on selling the hole." In other words, he emphasizes the benefits while others are busy trying to sell a bunch of meaningless features.

What are the benefits you've successfully provided in the past? When I think of my local bookstore, some of the key benefits I see are personalized service and community. If I want to know more about a book I'm considering, I'd rather talk with a real person than simply trust a bunch of reviews on a website, especially if some of those reviews might be planted by the author or publisher. The main advantage a physical bookstore has over an online one is the in-person advice and support the former can offer.

A lesson from Apple

Despite the sluggish economy of the last few years, some brick-and-mortar retailers have found ways to grow their businesses. Apple is a terrific example. Regardless of whether you're an Apple fan, there's always something new and interesting to discover in an Apple store. I can't tell you the last time I felt that way about a bookstore. I'm not talking about eye candy or glitzy merchandising; when you enter an Apple store you know you're in for a treat.

Wouldn't it be awesome if customers entering your bookstore had that same feeling? I realize Apple can invest a lot in its store experience because it's selling higher-priced items, but maybe that means you need to look beyond simply selling $20 or $30 books. I'm not talking about adding stationery and toys, like some bookstores have done over the years. It's time to think much bigger.

These days most bookstores have some sort of coffee shop or snack bar. Years ago it was a brilliant move to add that dimension, as it helped turn bookstores into a hangout rather than just an in-and-out retail destination. If in-store coffee shops were the game-changing idea of the '90s, what's the new one for the current decade? Here's one possibility: an in-store self-publishing resource. Self-publishing is red-hot and still gaining momentum. But what's sorely lacking in the self-publishing world is a reliable place to go to ask all the questions. How do I get started? What's the best platform? How do I create a marketing campaign? Self-publishing enthusiasts are left with a slew of questionable online options and a few in-person events. Why not create an in-person self-publishing resource within your store?

Take a page out of Apple's playbook and create a Genius Bar service for customers interested in self-publishing. Establish your location as the place to go for help in navigating the self-publishing waters. Remember, too, that most of the income earned in self-publishing is tied to services, e.g., editing, cover design, proofreading, and not necessarily sales of the finished product. Consider partnering with an established expert in these areas or build your own network of providers. The critical point is to evolve your business into something more than just selling books.

This doesn't mean you need to invest in self-publishing equipment to enter the field, but it's interesting to hear from someone who has. I spoke about this with Chris Morrow, co-owner of Northshire Bookstore in Vermont, which has had an Espresso Book Machine for a number of years. According to Morrow:

"The Espresso machine has allowed us to create a self-publishing business and more. It has changed how customers view the bookstore. The self-publishing business is a complementary business that takes advantage of technological developments while being true to our mission."

If my self-publishing suggestion isn't the best option for your store, don't simply give up and assume you'll always have a future selling print books. It's clear to me that the number of brick-and-mortar bookstores will continue to decline; more specifically, the number of brick-and-mortar bookstores that mostly rely on selling print books will continue to decline. Bookstores have always been a source of inspiration and an important community resource for their customers. Think about your own store's unique attributes and how they could be extended as print sales decline. If you go about it the right way, the digital reading revolution won't be a threat but rather a once-in-a-lifetime opportunity to reconceive your business.

Photo: "Books Etc Victoria" by markhillary, on Flickr

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May 04 2012

Join us in celebrating International Day Against DRM

Day Against DRMOne of our core beliefs at O'Reilly is that digital rights management (DRM) is a bad idea. We have a very simple theory: Trust your customers to do the right thing and you'll earn their business. That's why when you buy ebooks from oreilly.com, or through one of our retail partners, you'll never be handcuffed by the restrictions of DRM.

This isn't anything new at O'Reilly. It's how we've sold our ebooks from day one. Plenty of publishers were skeptical of our approach but we're thrilled to see more and more of them adopting it. In just the past few weeks Macmillan subsidiary Tor as well as independent publisher Sourcebooks announced new DRM-free product plans.

We agree with Charlie Stross' point that publishers who insist on using DRM have handed "Amazon a stick with which to beat them harder." That's why we're excited to help celebrate International Day Against DRM with a special discount on all our ebooks and videos. For today only (5/4/12), use the code DRMFREE to save 50% on our entire catalog.

Matt Lee, campaign manager at Defective by Design and one of the organizers of Day Against DRM, explains why DRM is detrimental to ebooks:

"DRM is a growing problem in the area of ebooks, where people have had their books restricted so they can't freely loan, re-sell or donate them, read them without being tracked, or move them to a new device without re-purchasing all of them. They've even had their ebooks deleted by companies without their permission."

We appreciate your help in making Day Against DRM a success. If you agree with our DRM-free philosophy we hope you'll take the time to tell other publishers and retailers to abandon DRM as well. A DRM-free world is one where retailers will find it much harder to create a monopolistic position that locks you into their device or format. We long for the day when the book publishing industry takes the same important step the music world did by abandoning DRM.

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January 27 2012

Top stories: January 23-27, 2012

Here's a look at the top stories published across O'Reilly sites this week.

On pirates and piracy
Mike Loukides: "I'm not willing to have the next Bach, Beethoven, or Shakespeare post their work online, only to have it taken down because they haven't paid off a bunch of executives who think they own creativity."

Microsoft's plan for Hadoop and big data
Strata conference chair Edd Dumbill takes a look at Microsoft's plans for big data. By embracing Hadoop, the company aims to keep Windows and Azure as a standards-friendly option for data developers.

Coming soon to a location near you: The Amazon Store?
Jason Calacanis says an Amazon retail presence isn't out of the question and that AmazonBasics is a preview of what's to come.

Survey results: How businesses are adopting and dealing with data
Feedback from a recent Strata Online Conference suggests there's a large demand for clear information on what big data is and how it will change business.

Why the fuss about iBooks Author?
Apple doesn't have an objective to move the publishing industry forward. With iBooks Author, the company sees an opportunity to reinvent this industry within its own closed ecosystem.


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September 23 2011

The problem with deep discount ebook deals

This post originally appeared on Joe Wikert's Publishing 2020 Blog ("What Good Are Ebook "Daily Deals" & Other Deep Discounts?"). It's republished with permission.


Kindle Daily DealI admit it. I check Amazon's Kindle Daily Deal every day. Every single day. Why? As a publisher I'm curious to see what they're offering and as a consumer I don't want to miss out on a great deal. (In the spirit of full disclosure, at O'Reilly Media we offer an ebook or video deal of the day too. In fact, our program was in place long before Amazon started theirs. Everything I'm about to say below pertains not only to Amazon's program but O'Reilly's and everyone else's as well.)

As a publisher I worry about the mindset we're reinforcing that content needs to be deeply discounted to garner customer attention. Amazon started this thinking by pricing so many Kindle editions at $9.99 even when they took a loss on each sale. And now the Kindle Daily Deals are often priced at $1.99-$2.99 or less, so the effective discounts off digital list price are 80-90% or higher.

You might ask, "what's the harm"? After all, brick-and-mortar retailers of all shapes and sizes have offered deep discounts as a way of getting the customer into the store. That's why a grocery store sells a gallon of milk at a loss and hopes that you'll pick up several other profitable items between the dairy section and the checkout counter. And that's the problem.

When I go to the grocery store I always wind up buying something more than what I went in for but that never happens when I buy online. I find I'm willing to let more items catch my eye in a physical store than an online store, so impulse buys are the norm for me in a physical store. When I'm online I'm much more of a destination shopper. I have something in mind. If I find it at the right price I buy it and nothing else.

So I've now bought three or four of the Kindle Daily Deal titles but they were all bought alone as single-title transactions. Each day when I check the Daily Deal I'm greeted by plenty of other products and offers on Amazon but I don't bother with any of them.

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You might still say the deal is good for both Amazon and that day's publisher/author. I'm not so sure. One way of measuring that would be monitoring how long the discounted title continues to sell through at higher levels after the discount ends. I don't have any statistics to prove this (since Amazon doesn't share the data) but just watching Amazon's Kindle bestseller list tells me the Daily Deal titles typically stick around the top 5 or so for another day or two and then pretty much disappear from the top 25-50. Maybe they're still selling at a higher rate than they did pre-promo but if that's the case you'd think Amazon would be playing that up with publishers and authors. I haven't heard a word from them about it.

Meanwhile, the Amazon program is causing me to change my behavior, but not in a good way. I used to take a closer look at the Amazon home page for other campaigns but now I pretty much check the Daily Deal and head out. To make matters worse, one of the recent Daily Deal titles was one I paid full price for several months ago. That one left a bad taste in my mouth all day.

I should point out that I'm a fan of discounts and promotional campaigns ... as long as they lead to something more meaningful than a one-and-done transaction. So why not make these deals part of some membership program? There are a lot of directions that could head in. For example, if I buy five books at regular price I get the sixth one of my choice for only $0.99. Or what if the Amazon Daily Deal was always priced at $2.99 to $4.99 but if I'm a Prime member I get it for $0.99 cents? In that model the general public still gets a deal (albeit not as deep a discount as today) but customers are encouraged to join a membership program that should lead to even more purchases down the road.

That's all I'm asking for. Let's get away from these one-product deep discount campaigns and start thinking about how to build a much more extensive relationship with our customers.

P.S. Again, since O'Reilly offers an ebook deal-of-the-day program I'm going to see if I can grab our head of online, Allen Noren, to join me in a TOC podcast where we can talk further about our results, what works, what doesn't, and how we might want to think about tailoring it for the future. Stay tuned for more details on that podcast interview.

Associated photo on home and category pages: Bullring - Selfridges lit up in the evening - Sale by ell brown, on Flickr

August 05 2011

Top Stories: August 1-5, 2011

Here's a look at the top stories published across O'Reilly sites this week.


Missing maps and the fragility of digital information
During a long drive through sparse terrain, Tim O'Reilly had a remarkable demonstration of the fragility of the "always on" connected mindset.
Google Plus defines an era of disruption at a moment's notice
When an entrant quickly yields considerable power in an existing market, and elicits potential for rapid innovation, this is what Jonathan Reichental calls the "G+ effect."
Science hacks chip away at the old barriers to entry
How can opening access to scientific data, equipment and lab space spur innovation? BioCurious' Eri Gentry and Ariel Waldman from Spacehack.org share a few ideas.
How online bookstores should get social
What if you could take the social aspects of brick-and-mortar bookstores and blend them with the convenience of online sales? Joe Wikert explains how an online social layer would benefit everyone involved in the publishing chain.
Data and the human-machine connection
Managing data and extracting meaning require new approaches, new education, and even a new language. Opera Solutions CEO Arnab Gupta discusses each of these areas.





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August 03 2011

How online bookstores should get social

This post originally appeared on Joe Wikert's Publishing 2020 Blog ("Should Online Bookstores Go Social?"). It's republished with permission.


As I walked through a local brick-and-mortar bookstore the other day I overheard this exchange:

Customer #1: This is why I don't always buy online. I love holding and flipping through books.

Customer #2: Me too, but I really like spending time in the store and seeing if I can get any good recommendations while I'm wandering around.

That's so true. Shopping in person can have a social element to it, but shopping online is always a solitary experience. To be fair, I don't make a habit of bothering other customers in the bookstore but there have been times when I've asked their opinion, particularly if I overhear them saying something I'm interested in or if I see them picking up a book I'm considering. Then there are the in-store clerks: I've gotten valuable pointers from store personnel countless times.

What's the analog to that in the online bookstore? There isn't one. Sure you can read through product reviews but that's not the same as talking realtime with other customers or a clerk.

Online bookstores have gotten along just fine despite this brick-and-mortar advantage, of course. But if online stores enable this functionality would it lead to an even richer shopping experience? I think so.

Goodreads screen
By tapping fellow shoppers and staff for recommendations, online bookstores could supplement their search, purchasing and personalization tools.

Let's say you're searching your preferred .com for books about one of my favorite topics, the New York Yankees. Wouldn't it be cool if part of the screen listed other shoppers currently browsing the online store who have a history of buying books about the Yankees? They'd appear in a frame just like you see with instant messaging apps and you could initiate a quick chat with any of them about a book you're considering.

Before you privacy advocates get too wound up I'd like to point out that this service is something you'd have to opt into. If you prefer to shop without chatting with anyone you'd simply leave this service disabled. But if you're interested in talking to others with common interests and would love to get their recommendations this service is for you.

The service would automatically include your purchase history, excluding items you may not want to make public or just showing topics/areas of interest, not specific titles. Think of it like an overlay of your Goodreads shelf with a chat service, built right into the online bookstore.

As a consumer I'd love to have access to something like this. As a publisher I'd get even more use out of it. You could do real, live customer research anytime you want to (assuming the right customers are currently logged in).

Forget about the customers for a moment though and let's think about the in-store clerk. Wouldn't it be cool if there were virtual in-store clerks available to chat with, ready to make a recommendation or answer your questions? You might figure it makes no sense for an online bookstore to add to staff just to have a bunch of subject matter experts online for customer inquiries. I agree, but this is where the brick-and-mortar stores could use it to their advantage ...

Think about B&N, for example. There are hundreds of stores open from about 9AM ET till about 10PM PT each day. That's 16 hours each day and every store has one or more in-store clerks on the job at any given time. Connect the in-store computers to this service so that the NY clerk who manages the sports section and loves baseball gets notified when I have a general question about Yankees books. The clerk steps over to the computer and joins me in a chat session. The in-store employee now adds value to the online bookstore experience as well.

I'm just scratching the surface on this idea. How about making it more compelling with badges and credits earned for answering customer questions? Better yet, how about including an affiliate program so that if my recommendation results in a purchase I get a cut of the transaction?

Then there's the ebook side of this. How about letting me send you an excerpt from a book I'm recommending? If it's a better sample than the one the publisher made available it only increases the likelihood of generating a sale. And if it doesn't, the retailer should be capturing all this information and using it to follow-up with that customer to nudge them again on that book (or other related books).

I'm convinced social will play a crucial role in the future of search in general and I also see a terrific opportunity for it to add to the online book buying experience. How about you? Would you be interested in something like this if your favorite online bookseller implemented it?

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June 09 2011

ePayments Week: eBay's ecommerce platform

Here's what caught my attention in the payment space this week.

EBay buys rest of open source ecommerce platform Magento

MagnetoEBay's announcement this week that it would buy the 51% of open source ecommerce platform provider Magento that it doesn't already own moves eBay closer to its goal of having an end-to-end commerce platform that integrates online, mobile, and physical retail spaces. Earlier this year, eBay put up $2.4 billion to buy GSI Commerce, which provides eCommerce services for retailers whose primary sales channels are physical retail stores. By integrating Magento's platform, which already serves tens of thousands of merchants online, eBay widens the scope of its merchant partners and the services it provides to them.

A video message from eBay CEO John Donahoe (below) lays out the ambition for the company's newly formed Open Commerce Platform group. In the presentation, Donahoe says Magento's capabilities complement those of GSI to make eBay "the strategic commerce partner of choice for retailers of all sizes." As part of this effort, eBay is adopting and expanding on its subsidiary PayPal's developer program, changing its name from X to X.Commerce ahead of this year's developer event, which is scheduled for October.

EBay and PayPal have supplemented these major purchases with several smaller scale acquisitions this year, detailed nicely by Ryan Kim on GigaOm. These purchases include: Milo, for helping people find products locally; Where, with its location-based ad services; and Fig Card, which helps merchants accept payments (including as SMS texts).

Magento's senior executives are clearly pleased in their video announcing the deal, which shows them in front of palm trees with downtown L.A. in the background — perhaps to emphasize their independence from Silicon Valley? It will be interesting to see how eBay and PayPal treat the open source version of Magento, as eBay is eager to expand developer interest in its entire platform and the open source version represents a broader playing field that expands their developer audience. While there are many ways to measure the success of an open source development project, one of those is a successful commercial exit strategy. And as Alan Shimel noted on NetworkWorld, Magento's sale represents "another commercially successful open source project that returned money to its investors," which, he adds, is further proof of a healthy open source ecosystem.

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Report: $50 billion in NFC payments by 2014

A bullish report from Juniper Research released this week proposes that NFC payments — that is, mobile transactions that rely on near-field communications wireless technology — could rocket from about zero today to $50 billion in only three years. That's a steep climb, and it will only be possible with the support of a lot of other growth curves working together. That includes wider NFC adoption by handset makers, broader uptake of NFC-capable smartphones, agreed-upon ecommerce standards for NFC payments, and greater consumer acceptance.

On that last point, CNET's report on the Juniper study pointed to a recent survey by Mastercard that displayed a striking generational gap on the issue of comfort with payments. Mastercard's survey found that 63% of those between 18 and 34 said they would be comfortable using their phone to make a purchase, while only 37% of their older cohorts said they were comfortable using their newfangled contraptions in this way. It will be interesting to see how the carriers and merchants promote the security and convenience (or appearance thereof) of mobile payments to this older demographic. And, of course, they may not need to: if mobile payments follow the path of other tech innovations like the web, texting, and Facebook, it's likely that where the young'uns lead, their elders will follow.

Got news?

News tips and suggestions are always welcome, so please send them along.


If you're interested in learning more about the payment development space, check out PayPal X DevZone, a collaboration between O'Reilly and PayPal.



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March 16 2011

Piracy isn't just about price

Manifesto.pngLast week, the Social Science Research Council published the results of a three-year study on piracy in the "Media Piracy in Emerging Economies" report. The report concluded that price was the overwhelming issue contributing to piracy around the world. In a post for thinq_ summing up the study results, James Nixon described an example from the report:

They cite the example of Russia, where legal versions of the film "The Dark Knight" sold for $15 — roughly the same price that consumers would pay in the US. But with wages much lower in Russia, that price represents a much higher percentage of consumers' income — the equivalent of a US buyer shelling out something like $75 on the film. Pirate versions, says the report, can be obtained for less than a third of the price.

In February, a group of contributors got together at a workshop and came up with piracy guidelines. Of the five points outlined in the "Don't Make Me Steal" manifesto, only one addresses the price issue.

At my request, Magellan Media founder Brian O'Leary, who has done extensive research on piracy and P2P file sharing, reviewed the report summary and the manifesto website. He offered his take, and his preference, in an email response:

I strongly prefer the approach taken in the "Don't Make Me Steal" manifesto. Although higher prices can encourage more people to pirate content, the debate is about more than just prices. Concerns about convenience, availability and usability (the absence of onerous rights restrictions) factor into individual decisions about what and whether to pirate media products.

This doesn't refute the Social Science Research Council's claim that higher prices in lower-wealth countries can lead to piracy. It does suggest that it may not be enough to just lower prices. I do agree fully with the SSRC's conclusion that enforcement has limited impact. Content producers are better off looking at a mixture of localized prices as well as widespread efforts to make their products convenient, widely available and interoperable.

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March 02 2011

Publishers get creative to keep books on shelves

ChronicleLogo.png As publishers struggle to adapt to the changing economy and the changing technological landscapes, distribution becomes more and more of a challenge. With large bookstore chains failing and consumers turning to the Internet to buy books, the sales agreements with traditional bookstores are starting to make less sense. Sheila Bounford, deputy managing director of NBN International, described the distribution problem in a recent blog post:

It is well known that when it comes to returns, bricks and mortar booksellers feel that they deserve equal discounts to those enjoyed by the online retailers whilst also maintaining that in order to offer range, they must have the right to return. What this ignores is that although the online retailers theoretically have the right to return, they almost never exercise it. Returns from online resellers run at less than 1% of invoice value. From the high street it is usually well in excess of 10% and often very very much higher. Returns are a drain on publishers' resources. Not just in terms of the cost of the book which is often unsaleable — but in terms of the cost of administration.

Some publishers are addressing distribution and point-of-sale issues with creativity. A recent New York Times piece looked at how publishers are selling books through non-traditional, non-bookstore retailers. These niche outlets expand sales reach, allowing publishers access to consumers who might never step foot in a bookstore. Another plus noted in the Times article: books sold through these channels are generally non-returnable.

One publisher tapping these non-traditional markets is Chronicle Books, which sells titles through Urban Outfitters, Nordstrom, Toys R Us, and Paper Source. In an e-mail interview, Kim Anderson, executive director of sales at Chronicle Books, said this model has worked very well:

Chronicle has long relied on non-traditional book retailers as an important part of our business model and long-term growth. The change in the book retail landscape over the last couple of years has only further highlighted the importance of this channel to our overall success.



Related:


February 24 2011

For booksellers, the future is brighter than it seems

Brick-and-mortar bookstores may look like they're in trouble, and the Borders bankruptcy certainly doesn't help. But Kassia Krozser, owner of Booksquare.com, says that amidst all this upheaval, we're actually in a golden age of publishing. People are discovering and reading content all the time, and the very definition of "publisher" is expanding.

This golden age extends to brick and mortar booksellers as well. During a recent interview, Krozser said traditional retailers that can accept and adapt to digital realities will survive this transition:

Booksellers have to accept that digital publishing exists, because that is what your customers want. They want a digital book in certain instances, they want a print book in certain instances — they want to buy a combination of those books. They want to be able to buy a book in the middle of the night.

Krozser also pointed out that offering digital options isn't enough — booksellers need to learn how all the various technology works so they can pass that information on to their customers.

You can't just sell an ebook. You have know how to download it because that's what your customer is going to ask you. You have to know how it works and what the file formats are. The retailers who actually spend time learning the technology, integrating it and accepting that it's out there are the ones who will succeed.

For more of Krozser's thoughts on the future of booksellers, check out the full interview in the following video:

Buy where you shop gets a little easier

SearchReviews.jpgConsulting crowdsourced product reviews has become a common step in many consumer shopping processes. The practice, though good for the consumer, might not be so great for the brick-and-mortar retailer. If a customer comes into a store to touch and inspect products, then returns home to compare reviews before making a final selection, an online purchase becomes far more likely than the customer returning to the store.

A new app by Search Reviews may alter these shopping habits. Consumers can install the free app on a smartphone and use it to scan in bar codes from any of more than four million products. The app then shows a list of aggregated consumer reviews.

As Alexia Tsotsis from TechCrunch points out, the app has a ways to go in terms of its ability to sort by date or store, and it doesn't yet incorporate geolocation. But having aggregated product reviews in hand could encourage more of those buy-where-you-shop consumer experiences.

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Don't be the product, buy the product!

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