A New Retail Dynamic

Whenever we go on the internet to check out how much something costs, we expect that it could change by the day, the hour or even the minute. Heck, it feels like they put the price up if we dare to look at something twice – especially that flight for a weekend getaway.

We’ve been trained in digital forums to know that prices are in a constant state of flux – dynamic. They vary based on demand (which is now trackable) to maximise the sellers’ profitability. Everything on the internet just moves that bit faster – the programmable nature of the forum creates a naturally turbulent environment we have to navigate, especially when it comes to commerce. While it can be frustrating and annoying, it also creates a sense of anticipation. It makes us act quickly, and come back frequently to see what else might seduce us. We have to make sure we’re not missing out, or that we paid too much.

While prices in the physical world do change, they’ve never been as malleable as they are on the web. Sure, grocery prices to change every week, car yards to have offers every month, and most retailers have sales. But no traditional retailer changes price by the minute, or even by the hour. Maybe it’s time they started.

It’s worth remembering the constraints retail had in a pre-internet world. Changing the prices in a grocery store required weeks of planning, long paper trails, the changing of pricing tickets on shelves, and the printing of physical retail catalogues. Most retailers had similar constraints when it comes to changing prices in stores. It turns out the low frequency of price changes in stores was in reality, a technology limitation. While local retailers could slash the price on a slow selling item with a sharpie, or a fresh fruit retailer could discount a pineapple before it rotted, larger retailers with many stores had a much tougher time changing prices.

But now that many stores have digital pricing displays on shelves, why haven’t they leveraged the possibility for totally dynamic pricing on the shelf? Answer: Legacy Thinking.

The only constraint that now exists is in their minds.

Crazy idea for free

Imagine if retail stores had prices that changed constantly, maybe even by the second. The moment I mention it to people, they think I’m crazy and that this would be ‘unfair’ to consumers. They says it’s something a store just couldn’t do. How could a store just change its prices every other moment? Answer: The exact same way the internet does. How cool would it be to reduce a price dynamically in front of a consumer to entice a purchase as they walk past an item they picked up and put down again – to send out a post on social media on a quiet day and announce a half price sale for just the next 30 mins? Or to announce at a random time on a Saturday the store will have a radical price reduction. Maybe an unexpectedly busy time would require the prices to go up to thin out the crowd in a too busy fast food restaurant?

Sure, there’s massive flaws in this idea, there’d be winners and losers, people complaining and people gaming it to their advantage. But surely it would generate traffic, attention and conversation that harkens a market bazaar of yesteryear where literally anything could happen.

Maybe it’s this kind of crazy that retail needs.

The last 10 steps

In the week before Christmas, houses around the world are inundated with ‘Sorry we missed you’ delivery notes from couriers. So if you’re wondering why on-line retail still only represents 10% of sales in the USA and around 6.9% in Australia, it’s because the real problem isn’t the last mile, it’s the last 10 steps.

What is the last 10 steps? I’m defining it as the space between where the delivery van stops out front of the final destination, to getting the package inside. It’s estimated that more than 20% of deliveries do not get made on the first attempt. This comes at a massive cost to couriers, and ultimately us. And this is before we consider the horror of having to go into a post office pick up the package. Which is much worse than shopping –  so annoying.

While we have access to most everything via ecommerce these days, our houses need an upgrade to cope. Yep, our houses have been upgraded many times as new technologies arrived. We’ve added electricity, indoor plumbing, automated heating, and even driveways are a little over 100 years ago. Unfortunately our letter boxes haven’t had an upgrade in about 250 years – and we need one. The early attempts to solve this problem are lets just say, sub-optimal. Giving Amazon a key for couriers to unlock my door? No thanks. A  locker outside a petrol station brought to you by postal services around the world? Hmm, that seems like a company not trying very hard. Quite frankly I can’t believe a Mac Daddy Delivery Box hasn’t entered the home market yet.

So what would one of these puppies look like? Here’s the Sammatron version of the Mac Daddy Delivery Box to avoid our Christmas ecommerce woes in 2019:

The Mac Daddy Delivery Box – Some of the features I’d put into it:

  • It would have 3 sections: Dry, Fridge and Frozen – so it could take all deliveries.
  • It would probably be a as big as a fridge.
  • It would be underground and have a button for the courier to press and it rises up on demand to take the delivery.
  • When a delivery arrives the owner would get a call and see live video footage of who is delivering the item and potentially check their ID.
  • The delivery unit would only open via the owners smart phone.
  • It would have near field communication readers (RFID) and image recognition cameras to detect the delivery is correct and as ordered.
  • All data of deliveries would be owned by the person who owns the MDDB (Mac Daddy Delivery Box) so they could sell that information to companies if they choose, for their own profit.
  • The MDDB would aggregate data and give reports of who, what and when back to the owner to track their spending.
  • It would be secure like a safe, so that items of high value could be delivered safely.
  • It would be electric, and solar powered.
  • It would make your friends envious and totally want one.
  • Optional Extra: two small palm trees above the underground delivery unit – so that when a delivery arrives it looks like the Thunderbirds secret cave coming out of the ground!

This type of delivery unit seems inevitable to me. It’s not if, but who and when. And if it isn’t done by mid 2019, then I’ll do it myself in my House of the Future project. Until then, you might just choose a glitter bomb to entertain you in the interim.

 

🎄Have a great Christmas, Steve. 

 

You own prime time now

Punch Clock

Prime time used to be a big thing, sure it’s still a thing, but a diminishing one. You can probably remember when the 6 o’clock news mattered. You can remember when the sitcoms hit the airwaves at 7.30 and the movie at 8.30pm. They all made sense because we all worked until 5pm. The shops used to be closed from 12pm on Saturday, and not opened on Sunday. The clock, above all things defined the industrial era. Time zones themselves where invented to serve national railroads. The clock told us where to be and when. We had special clocks at work to punch to show when we arrived and left. And smart media worked around this. While time is the key asset in the attention economy, the clock itself is losing its power.

Old media still thinks the clock matters more than it does.

We still have prime time. We still have that time when we sit down and absorb or participate in entertainment, but the time we do it is determined by us. Maybe it’s 5-6pm on the train listening to a podcast. Maybe it’s 11pm in bed watching a Youtube video, maybe it’s placing ecommerce orders at 3pm. The enslavement that goes with prime time is finally evaporating. We have our own airwaves now.

While this trend has started with media (Tv, News, The Press, Web, Radio, Movies) it’s part of the great fragmentation in all commerce and culture. The only question left is whether we are doing business at times which serve history, or those we serve.

You should totally read my book – The Great Fragmentation.

Why on line prices can mislead

Cars for sale

On line markets where people sell peer to peer – think eBay sellers, or used cars on line –  can trick our perception of the price of things. Here’s why:

This is the advertised price, not the price it sells for.

When we compare similar items on line, we are more likely to see the price of things that haven’t sold yet. The price people actually buy at, is often not advertised long enough for comparisons. This means the real value of something is often much less than we think. Especially when we are looking to sell something we own. We are weirdly programmed to think items we own are worth more than they are. 

You might notice a car like yours is advertised for $20,000. There may even be multiple advertised at this price.  Other sellers also see the most common price and follow the market. But we need to remember these are the cars which ‘haven’t sold’ – those that sold probably did so at $17,ooo and are no longer listed. It’s the overpriced stock that creates our price perception.

Why does this matter? Because it is counter intuitive, the opposite of what we’d expect. It’s the filter bubble in action. The more we see homogeneous products with price X on line, the more we should remember it’s the price people hope for.

You should totally read my book – The Great Fragmentation.

I wanted to give them my money – Vans

I’ve been a Vans off the wall fan since I did my first cross up on my BMX way back in 1982. My fav’s are the original checker board slip ons, as sported by main man from Ridgemont High – Spicoli.

Spicoli shoes

Well today in a classic web enabled distraction I decided to see if I could make a custom pair over the web. I found that Vans do have a design your own shoe service – like most shoe brands these days. I was prepared to pay a premium – maybe double the usual price. For these wouldn’t be the Spicoli, they would be the Sammatron. I even decided to go fluoro to give it a bit of 80’s retro kick. Check ’em out below:

Screen Shot 2014-02-13 at 2.45.05 pm

But when I got to the check out. I pumped in all of my information only to be told they don’t ship to Australia. It was curious, because their on line form let me add Australia as my country. I could also see that the shipping agent was UPS. I chatted with a staff member on line who also told me they couldn’t ship to Australia. Even after I offered to pay twice the price. Sad that one of my favourite brands is still in 1985 with more than their retro cool products.

Here’s what I don’t understand:

  • The site doesn’t care what country the person is from.
  • The staff shoe maker doesn’t care what country the custom shoe is sent to.
  • The site has the e-commerce built in.
  • The site accepts credit cards and other forms of payment.
  • The shipping agent ships to Australia
  • The customer (me) wants to give them money.

So why wouldn’t they sell me my custom shoes? A strange decision indeed. In the end I decided to buy some custom old school superstar Adidas shoes – who gladly ship to my fair country. The world doesn’t care what country a company is based in. If you don’t let them give you their money, there is always somewhere else to spend it.

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Why e-Commerce is different

At first we got confused about how to make money out of the internet. We thought we should be able to demand payment. Silly us, we forgot about the first lesson in economics – that pesky demand and supply. Supply doesn’t automatically equal demand – especially financial demand. On the internet things work in reverse. First value must be created, then it is extracted. It’s the opposite to the previous industrial world of buying and selling.

Now it’s proving, then earning.

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