Amazon Admits Selling Millions of Kindles

December 16th, 2010

What’s happening with the Kindle in the e-Reader Market?

This week Amazon let us know it is selling millions of Kindle e-readers.  The 2010 holiday quarter has already surpassed the total of all sales for 2009.  The various estimates for Kindle sales for all of 2010 range from 4 to 7 million units will be sold.  What’s the real number?  Hopefully Amazon will tell us early next year. 

A recent report by ChangeWave has the Amazon Kindle at a 47% share of the e-reader market based on their survey of consumers.  The Apple iPad is next with 32% and that is if you consider the the iPad just an e-reader.   The iPad certainly impacts this market and will continue to do so. 

It should be no surprise the Kindle is at the top right now as a true eReader.  The Kindle is relatively cheap, priced at between $139 and $149.  You can find cheaper devices such as the Aluratek Libre and Kobo eReader which cost between $99 and $129.

What about functionality?  Not all avid readers feel the need for over-the-top functionality.  The Kindle’s black and white display is fine for reading.  It is neat to have wifi that enables an online dictionary to look up those occasional new words.  But this is not critical.

A revolution is starting as publishers are now beginning to convert their vast inventory of illustrated books into e-books. This is all possible due to Barnes and Noble’s new Nook Color and the Apple iPad color displays which will help them showcase their color illustrations and photographs.  On Wednesday, Apple introduced 100 illustrated book titles in the iBookstore, a collection of cookbooks, children’s books, and photography books. Some of the most popular children’s books will be available with illustrations. Barnes & Noble’s Nook had announced publishing famous children’s books last month.

The Kindle and eReader market will continue to grow.   According to Gartner, the market for eReaders is expected to grow by 68% in 2011 despite competition from the iPad and Galaxy Tablet.   The Kindle is projected to sell 11 million devices in 2011 and will continue to be the market leader holding on to a 45% share.  A key will be holding the price to a point where it can continue to be an affordable alternative.

It will be interesting to see if the Kindle continues on the predicted path or if the new entry in the market, Barnes and Noble’s Nook and the iPad will impact this trend.  It will also be interesting to see how publishers will embrace this new technology to reach this new age consumer.   

So how are eReaders impacting how you publish your content in the digital world?

Fighting for Mobile Platform Market Share

November 12th, 2010

What Business Model Will Win?

The recent release by comScore of its mobile subscriber report continues to show Google Android (promoted as Droid by Verizon) closing the market share gap with Apple for mobile platforms.

Google’s market share is up 6.5% from June to 21.4% and now only 2.9% behind second place Apple which has 24.3% of the market. Apple’s share is the same as reported in June. RIM continues to lead the pack with 37.3% share slipping 2.8% from what was reported in June.

The Google / Apple competition for market share presents two very different business models. Google’s Android or Droid contains an open source operating system. The code is available to manufacturers to add their own features and functionalities. They can listen to their market and shape the product. Apple owns their operating system and keeps their code proprietary. Apple allows developers to build applications on top of their operating system. These applications are then sold through retail or on the web where Apple controls distribution of iPhones and iPads.

It will be interesting to see how these competing business models evolve over time.

Apple’s recent announcement that iPhones will now be available at Target stores through the Target Mobile Centers, located in 846 stores, might be the start of a change in strategy to sell more phones. In the third quarter of 2010, Apple sold 14.1 million iPhones, up 91.4% from the prior year and beat the top competitor, RIM, which sold 12.1 Blackberry’s in the same quarter. Apple is already selling a lot of phones.

Regarding the Google / Apple business model differences, during a conference call with analysts, Steve Jobs was quoted as saying “It’s worth remembering,” he said. “that open systems don’t always win.” “In reality, we think the open versus closed argument is just a smokescreen,” he concluded. The real issue he said is integrated versus fragmented. “We think integrated will trump fragmented every time.”
We will continue to watch how the story unfolds…
So how are the actions of, Apple and Google, influencing how you will reach your customers in the digital world?

Social Sentiment

November 2nd, 2010

How will businesses deal with this unstructured data?

Recent news from SAS announcing their release the SAS Conversation Center in 2011 is another clear sign how social media continues to change business in the digital world.

The new product is designed to help companies capture tweets in real-time that are important to a company’s brand or product. The tweets are analyzed for their sentiment and influence of the tweeter and then can be routed to customer service to handle. It is no wonder the unstructured data flowing from social media sites are driving companies to invest in the technology to link them to their customer service operations.

According to Nielsen Online’s research report from last year “Global Faces and Networked Places”, social media sites are now being visited once every 11 minutes and the 35 – 49 year old category of social networking site usage is growing at the same extent as the 18 – 34 year olds. As for the younger generation, in 2010, kids are spending 27 minutes more time online than in 2009 with most of this time dedicated to social media activities. Not to mention the growth in smart phone devices is helping to accelerate the process and access to social media.

So what are the challenges of dealing with customer sentiment?

Linking customer sentiment to a customer service strategy extends beyond tracking tweets. It means capturing information from other sources such as Facebook and customer reviews. A company such as Expedia gets about 80,000 customer reviews per month. All this data must be captured and analyzed. Part of the analysis is separating out the real issues from a flip comment before investing time and money into a response. Social media is another source of feedback and analytics.

A recent survey of 2,100 companies sponsored by the SAS Institute found that 75% of the companies did not know what their customers were saying about them. Only about 23% were using some sort of social media analytic tools. With the impact of a bad customer experience being made many times worse by social media channels, there is no doubt this will change over time.

So how are you making use of social sentiment in managing your business in the digital world?

Social Scraping

October 18th, 2010

What are the ethical boundaries?

A recent article in the Wall Street Journal got our attention. The article is titled “Scrapers Dig Deep for Data on the Web”.

This article begins by talking about a “break-in” at a web site called PatientsLikeMe in May of this year. A new member was using sophisticated software to scrape or copy information from private online forums. PatientsLikeMe was eventually able to identify and block the intruder. The company did inform its members of the break-in.

It’s a fact of life that there are companies out there actively scraping data from social network sites such as Facebook and Twitter. Scraped or not, there is a lot of valuable information on social networking sites companies want and will actively seek. The question is should there be limits placed on what information is available for companies to collect or analyze. There are certainly ethical and legal challenges that need to be addressed.

For the ethical and savvy marketers, information from social networking sites can provide a wealth of customer insight. Social networking sites also have become an extension of customer service and support. Some companies have staff monitoring the sites and in some cases are responding to service problems through social media sites. The use of social networking sites and the information from these sites will only increase over time. According to the Winterberry Group, spending on data from online sources will more than double to $840 million in 2012 from spending of $410 million in 2009.

Users of social networking sites expect marketers will gather and use their data. A survey conducted by Webtrends indicates half those surveyed who use Twitter expect brands to use their information. However half also indicated they would leave social networking sites if they became too commercial.

So how do we ensure collecting this information remains within ethical bounds?

The answer may rest with the social sites and the collectors of this information. For example, Facebook is putting a strong effort into data security. It is important for them to lead the way to taking this issue seriously. Nielsen says it no longer scrapes data from sites requiring individual account access unless it has permission. These are examples on both sides of the issue.

Social network scraping can remain within reasonable bounds that protect information that needs to remain confidential. However, it will take the social networking industry leaders to invest in data security and markers to abide by ethical practices. This is yet another stage in the evolution of the digital world. And, unfortunately, there will always be some individuals and companies that attempt to reach beyond the areas of reasonable ethical behavior. It is up to all of us in the digital world to call their actions into question to protect this valuable world of information.

So how are you making use of social networks in managing your business in the digital world?

The c-store: A microcosm of retail marketing

October 4th, 2010

Interested in recent findings on the in-store shopping experience?

Here is an article published by DDI, a Nielsen Media Company.  Author George Wishart analyzes a study conducted by Wesley Partners in-store intelligence partners Bill Dupre and Linda Brennan of In-Store Insights.

Here’s George’s article…

In-store marketing gets increasingly difficult when the entire shopping experience is only 103 seconds. How would you have to think about your environment differently, if that was the entire time a person was in the store, including walking in, shopping for desired items, paying the cashier and leaving?

In a recent study by In-Store Insights, a consultancy run by in-store veterans Bill Dupre and Linda Brennan, results confirmed that the average shopping experience in a convenience store is a mere 103 seconds. This is not surprising, given the definition of a channel where shoppers want to get in, purchase what they need and get out of the store quickly. Two things become clear. First, impressions are vital in convenience stores. The first instore destination visited is critical, because there is a very good chance that it will be the only destination visited (other than the checkout). The second critical issue is the stopping power of the marketing/display.

In-Store Insights data demonstrates the split-second decision making that consumers make when they are shopping. Most of the items are only shopped for about 1 second to 4 seconds—not much time. The coffee zone has longer dwell time, but stopping power is not very strong. The coffee items jump up to 9 seconds, only because the customer is actually making his coffee. On the other hand, hot dogs have high stopping power, but the average dwell is quite low, strongly suggesting either poor in-stock conditions or that the hot dog offerings are not meeting shopper expectations.

Unique Stop Unique Pass Stopping Power % Total Stop % Total Pass Avg. Dwell
Checkout 4,482 4,742 95% 95% 100% 44.12
Front-End 2,161 4,757 45% 46% 100% 13.36
Coffee 556 1,743 32% 12% 37% 9.00
Middle Aisle 492 1,358 36% 10% 29% 4.82
Refrigerator 439 882 50% 9% 19% 4.62
Soda 574 1,002 57% 12% 21% 4.23
Lotto 127 651 20% 3% 14% 2.56
Front Aisle 302 1,260 24% 6% 27% 2.42
ATM 112 581 19% 2% 12% 2.00
Back Aisle 265 1,421 19% 6% 30% 1.76
Fountain Drinks 241 788 31% 5% 17% 1.57
Hot Dogs 206 293 70% 4% 6% 1.29
Water 129 524 25% 3% 11% 0.81
Soda-Floor 54 501 11% 1% 11% 0.28

Source: Sapphiresky Image Marketing Inc./In-Store Insights Inc.

New questions arise with this data. In fact, further research is needed to determine if longer dwell time is the result of out-of-stocks, assortment issues, poor execution of signage/tags, confusing shelf set, etc.

According to Dupre, 71 percent of shoppers purchase two items or less per c-store trip. “One difference between c-stores and other retailers is, in c-stores, few customers go to the display. This is for two reasons. First, the categories that the customer wants are all close at hand, and secondly, cstore retailers use display space to inventory products, usually drinks, that the consumer would prefer to get cold from the refrigerated case,” Dupre says. “The c-store shopper is a shopper on steroids compared to other channels. They are prepared to spend just a couple of minutes in the store, and anything that jeopardizes this quick-trip mentality will result in an extremely frustrating experience.” The convenience store is a microcosm of retailing in general. If shoppers can’t find what they want, they leave the store. In other retailing channels, the customer could move on to the next aisle or department and buy nothing from your category—in addition to leaving the store.

Brennan, a partner at In-Store Insights, cites research that it takes about 7 seconds to shop an aisle in a grocery store.

c-store Digital Media

Therefore, just like in convenience stores, the marketing in an aisle must have stopping power, and the message must be clear and quickly communicated.

Brennan and Dupre have done research into displays in various channels. “We have done extensive research in the use of digital displays in-store, and too many clients want to have 15- and 30-second commercials on the digital sign,” Brennan says. “That is way too long for shoppers.” Recent research was conducted on a category where shoppers dwell for an average of 30 seconds before purchasing. Even with digital media planted squarely in that category, with shoppers’ faces 9 in. or less from the stimuli, shoppers will only engage with the media if it has a relevant message, and if it has the ability to getshoppers out of their “shopping mode.”

The research insights that Dupre and Brennan refer to are not new. For years, basic Marketing 101 says that the marketing message must have stopping power, clearly communicate the brand message, and provide the consumer with a way to get more information and have a dialog. The trouble is we keep forgetting these lessons. We need to keep reminding our teams, including the new recruits to marketing and the TV-trained art director who thinks he (or she) knows better, and help them get focused on the only thing that really matters—making those 103 seconds of shopping a productive, enjoyable experience.

A pioneer and consultant in the shopper marketing industry, George Wishart is the president and CEO of Edgewood Industries LLC. He shares his shopper marketing insights with DDI in this regularly appearing column.

That Sign Can See Me!

September 24th, 2010

Source: The Wall Street Journal

Where is recognition technology taking direct response marketing?

How would you feel about this scenario?

You walk up to a beverage vending machine. It is a flat screen monitor with high resolution images of your beverage choices. After a second or so of standing in front of the machine, the machine TELLS you what beverage selections might suit your taste and they begin to flash on the screen.

We have all probably seen this technology to some degree in our everyday lives. Whether it’s the camera at the ATM machine or toll booth, in-store digital displays, the voice at the self-serve gas station telling us to reposition the pump…well I am sure you get it.

But this new technology takes things many steps further. It actually profiles you on the spot to determine gender, age, ethnicity, and level of attentiveness. According to NEC digital signage group, these signs can identify the right gender 90% of the time and age within 10 years 70% of the time. This is the transformation of digital display boards into powerful direct response marketing tools. Japan is taking the lead in using this technology for digital public displays. They are also incorporating mobile technology into the display boards to make them even more interactive. The Wall Street Journal has an article titled “Billboards That Can See You” that provides more detail on what’s happening in Japan with this technology.

For privacy advocates, this can be construed as a scary thing. In particular, there are the demographic profiling aspects of the new technology. It has all the possibilities of taking our concerns about internet privacy to another level. We are in the midst of increased consumer sensitivity to privacy issues.

So will there be acceptance of this new technology? Retailers may be motivated. They are already investing in Smart Networks that do not have this extra functionality. A Walmart revealed at the Digital Sign Show this past February revealed there is a sales lift in departments which featured Smart Networks:
• Electronics – 7 percent
• Over-the-counter 23 percent
• Food – 13 percent
• Health /Beauty – 28

It is inevitable this kind of technology will become more main stream and retail will continue to invest in-store digital networks. With the advances in displays, recognition technology, mobile, etc. and the Generation Y or the Millennial Generation who grew up using this kind of technology becoming major consumers, it will become part of our culture.

The question will be how consumer privacy is integrated into the implementation of this technology. The lessons learned from the online privacy should heighten awareness of the need to deal with privacy up front.

Okay. So how will interactive display technology impact you as you manage your business in the digital world?

Google Takes a Bite out of the Apple!

September 17th, 2010

What does that mean to mobile commerce?

This week comScore released their July 2010 US mobile subscriber market share report.  The results show the American Consumer is using the phone for more than just a call.

The hardcore data users, smartphone subscribers, grew to 53.4 million people at the end of July 2010, up an 11 percent from the three month period ending July. The majority of the growth in the market came from the Google smartphone operating platform. Google’s market share was up from 5% to 17%, while Apple’s share drop by 1.3 percentage points to 23.8%. While Apple’s market share dropped, the number of subscribers using the platform still increased.

Apple analysts have been quick to point out that all is well and this is just an unusual blip caused by two main factors:
• A delay in Apple iPhone subscriptions in May and early June as everyone waited for the new iPhone 4 model. After all, who wanted the old iPhone 3Gs line!
• The inability of Apple to meet the demand for Apple 4 iPhones in June when they ran out of stock.

Is that really the case or is history repeating itself?

Apple has a great platform but is prisoner to the AT&T network and one hardware manufacturer, Apple. The focus has just not been on producing a great smartphone platform.

Google’s approach is to focus on delivering a great platform that is easy to develop and can be incorporated by Motorola, Samsung, and HTC mobile handset manufacturers. Google’s app store is growing and now boasts more free applications than Apple.

Who has a better strategy?

Well if you are a mobile marketer who cares! You need to plan to reach both smartphone platforms. The good news is that mobile subscribers are using the phone for more data oriented activities. Just look at these comScore stats:
• Sent text message to another phone – 66.0% up 1.4 percentage points.
• Used browser – 33.6% up 2.5 percentage points
• Used downloaded apps – 31.4% up 1.6 percentage points
• Accessed social networking – 21.8% up 1.9 percentage points.

So Google taking on Apple is all good news for digital marketers who want to reach their customers while they are on-the-go. Mobile is becoming the way to deliver your digital message.

Okay. So how will the Google and Apple smartphones impact how you manage your business in the digital world?

Data Source: comScore Reports July 2010 US Mobile Subscriber Market Share – July 15, 2010.

More News about Digital Content

September 3rd, 2010

Did you hear what’s happening with your dictionary and the espresso machine?

Recent articles in the Wall Street Journal brought to light changes in content delivery that are impacting an old traditional publication and how on-demand paperbacks are going direct to the consumer.

The Oxford English Dictionary may not be printed again.  This is a 126-year-old dictionary.  According to the WSJ, the online version of the dictionary gets 2 million hits a month from subscribers.  The cost of the online subscription is $295.  The full printed version is 20 volumes and weighs 130lbs.  The cost is $1,165 and has sold 30,000 sets since being published in 1989.

With its online subscription and the availability of free sites like Dictionary.com, your “oxford” is your laptop or smart phone.  This is another example of a business model that has been turned on its head by the digital world.  It will be interesting to see how Oxford University Press, publisher of the dictionary, evolves its business.  Old reference books that have gone online like Encyclopedia Britannica have fallen far behind Google and Wikipedia as online reference tools.

Another change in the traditional world of books is the on-demand book. These on-demand books are not produced at the printer but at the bookstore thru what some have called an “ATM device for books”. One of the direct to consumer printing machines available is called the Espresso Book Machine.  It is manufactured by the New York firm On Demand Books, LLC and has sold 51 machines so far placed in 50 locations. The fully configured machines cost between $100,000 – 150,000.

A three hundred-page book produced by these new on-demand machines can be printed, trimmed and bound within 4 minutes at a cost of pennies per page.   On Demand Books claims access to over four million public domain titles provided in part through a partnership with Google for access to public domain titles and Ingram Content Group for in-copyright titles.  If you’re in the Boston area, you can check it out at the Coop in Cambridge.

According to Interquest Research Group, digitally printed books currently represent about 4% of the market and are expected to grow to 15% by 2015.

Okay.  So how will the evolving world of digital content impact how you manage your business in the digital world?

The Interactive Store

August 27th, 2010

How the interactive experience is coming to a store near you

The in-store shopping experience is loosing its competitive edge to the online digital shopping experience.

According to IPG Media Labs shopper satisfaction at retail stores is declining at a rate of 15% per year.  This is during a time when many retailers are facing lower sales due to the current economic conditions.

Meanwhile, the online shopping experience has become more main stream.  Online consumers are getting accustomed to being empowered with detailed product information, product reviews, interactive selection options, and more at their fingertips when they shop online.  Expectations have been permanently raised.

So what are retailers doing to enhance the in-store shopping experience?  The interactive shopping experience is being integrated into the in-store experience.

Here is a sampling of some of the in-store interactive media solutions recently introduced.

• Stop & Shop is testing hand-held scanners in 289 of its stores. The scanners deliver personalized ads and offers based on purchase history, location within the store, and last item scanned. They also have placed kiosks in the deli area allowing shoppers to order product and their order is fulfilled while they shop.

• The Limited is considering installing interactive mirrors in its stores. The mirrors will allow shoppers to mix and match styles and warn of mismatches.

• Target has launched a mobile application that allows their Customers find a store, keep up-to-date on sales, clip coupons and store the Target Gift Card for payment. Best Buy is launching a mobile program called ShopKick. An application is downloaded to your mobile phone and you earn reward points for shopping in the store. Dunkin Donuts and Walgreens are also planning to launch new mobile programs soon to draw customers into their stores.

There is a good article in the Wall Street Journal, “Luring Shoppers to Stores”, that covers this topic and provides more details on some of the retailers plans.

The challenge will be how consumers adopt to the new in-store technology. Generation Y sees mobile devices and interactivity as a natural part of their daily lives. Will the preceding generations adopt the new in-store technology?

At some point, there might be no choice!

Okay. So how will the retail interactive experience impact how you manage your business in the digital world?

Adoption of Digital Media

August 18th, 2010

Four points any marketer should find interesting

In the new, growing and evolving world of digital media, adoption is a critical statistic. Adoption is essentially the use of new media delivery methods supported by technology in the delivery and consumption media. The key players are the providers of the means of delivery (technology), marketers and consumers.

Adoption of digital media by consumer is critical to its success in achieving its goal: Selling More Products!

Here are the four points:

• Adoption of Social Media by Major Brands. According to Burson-Marsteller, 79% of the Fortune 100 use one of the major social media platforms. 20% of those companies are using all four of the main social media platforms (Twitter, YouTube, FaceBook and Blogs). 82% are tweeting at least once per week and post to FaceBook on average 3.6 times per week. 50% have a YouTube video account and upload on average 10 videos per month.

• Adoption of Mobile Coupons. Promotional coupons sent by mobile phone are expected to reach 200 million by 2013 according to Juniper Research. Adoption of mobile coupons has been slow to date since they aren’t necessarily any easier to use than paper coupons. However, Target Corporation recently announced it had deployed scanners at its more than 1,700 stores that can read mobile coupons. This initiative by the second largest retailer in the U.S. will help push adoption ahead.

• Adoption of Smart Phones and Mobile Applications. Why are these two lumped together? Smart Phones are the means to using mobile applications. Smart Phones will grow to be roughly 60% of the new handsets sold in the U.S. by 2014 according to Pyramid Research. They are a growing channel for brands to interact with consumers. Projected to be among the top 10 consumer mobile applications for 2012 by Gartner are mobile payments, mobile advertising and location based services. All are key components in adoption of mobile devices in brand marketing initiatives.

• Adoption of New Standards of Measurement. A new media measurement project will be launched in September with the goal of understanding consumer media behavior across all platforms. The “Touchpoints” Initiative”, launched in the U.K. in 2006 is being brought to the U.S. by the Coalition for Innovative Media Measurement. The data from the study will allow media buyers in the U.S. for the first time look at unduplicated media consumption across all channels.

Okay. So how will adoption of digital media impact how you manage your business in the digital world?