Archive for the ‘retailer’ tag
Posted by Kate Morris
The simplest ideas can be the best link building ideas. If you spend a few hours really thinking like your customers, stop thinking about competitors, and stop being yourself (executive, SEO, etc.), there are a number of ideas out there that can turn into multichannel success stories for your marketing program. This inspiration came from my time spent in marketing classes.
Who here took a marketing class in school? *waits for hands*
If you were a marketing undergrad like myself, you want to shoot the next person that says "pick a company and build a marketing plan for them." For those of you that were spared the annoyance of hearing about Starbucks year after year, count yourself lucky. (Don't get me wrong, I love Starbucks, check my credit card statement.)
Marketing students are well versed on how to develop out of the box ideas for companies all over the world. Know why? They don't have to implement any of them! It is amazing how everyday politics and budgets can hinder the ability to brainstorm really good ideas.
Creating a marketing plan out of the blue is something everyone should try. It is truly amazing how many great, yet simple ideas come out of starting fresh and thinking not as an employee, but as an outsider. The key is getting out of your own head to generate fresh ideas.
Forget Yourself and Find Them
The first step is to get out of the office. For consumer facing industries, it's time to go find your customers. If you have the ability to visit a retail location, do that. You don't need hundreds of customers, you just need a few. If you are an online retailer, look up some of your clients and ask if you can visit them. Find real people and ask for 15 minutes to chat with each of them.
No, I am not kidding. This might be difficult, but it's worth the time.
If you are not a retailer (more B2B), do as the online retailer does and look up your clients to go visit a few. Flying across the country does not work for many businesses, so you'll need to get creative. If all else fails and all of your customers are far away, ask to Skype chat with a few.
You need to enter their world. Don't come to the meeting with questions prepared. Don't take more than the time they give you, and try to be brief. Simply chat with them about their day. Ask them how their life is and how your company fits in. You don't want company specific feedback, you just want to see how you fit into their life and what is on their mind at the moment. Really get to know them.
Take notes. Give them a $5 giftcard and sincerely thank them for their business.
(PS: you probably have a customer for life now)
Get Outside of Your Box
Now that you are in the mind set of your customers, don't go back to work. (Believe me, your boss will understand when they see these ideas.) Instead, find one of those co-working places in major cities. If you aren't in a major city, visit somewhere that isn't home or work. It can be a coffee shop, but try to pick somewhere you can be creative and productive for a few hours. If that means the local library or a friend's office, then cool.
Now, sit down and think like your customers. What would they say your marketing plan should be? What makes your company/client the place to go to for your products/services? You want to be the favorite place your customers go online and offline when they need something related to what you do. How do you make your company that important?
Don't be you, be your customer. What would you want done differently in your company? Find a whiteboard, a notebook, a computer, or similar. Write down everything that comes to mind.
Most Important: Answer Without Abandon
Take those questions and just answer. Don't think about what is plausible. Don't consider what other people will say. You want the ideas that you don't have to implement, which is what makes this exercise fun and awesome. Don't consider cost for ideas, just get them all out there. Your only concern should be how to make your customer happy. Don't think about selling them more, getting links, shares, or email sign ups. Just make them love you.
Do they already love you? Woo! Now, how do you get more people to love you?
Other questions to ask yourself if you are stuck include:
- Where would potential customers go to find out about our products or services?
- How do they know they need us?
- How can we solve their problem faster and more efficiently for THEM? (Stop thinking about shipping and costs, this is about them.)
- How do we make ourselves avaliable to them whenever they need us?
- What can we do to make them LOVE us?
The Result: Great Ideas
The above is a brainstorm that turned into a marketing plan for Dick's Drive-In in Seattle. The key take-aways were to have a spokesperson, "Dick," that had a van he drove around in to drum up love and business. If any of you have Uber in your city, think the ice cream truck promotion. They would also give away t-shirts in addition to yummy deluxe burgers. By the time these guys were done, everyone in that room was hungry.
Ther kicker here is that Dick's is not a client at Distilled. They a well-loved local eatery. Everyone knows who they are and how to get a yummy burger. They probably don't need help online, but they can get help with this 30 minute brainstorm and marketing plan by people who do not work for them. And the idea was fantastic. I was not a part of this team, but I can only imagine the applications.
I mentioned that these brainstorms can turn into major successes for you, including link building ideas. I can't promise that every idea you come up with will result in killer link building, but I have faith that if these ideas are actually customer focused and impactful, any number of them can get the attention of the media and make your customers want to share your business with their friends.
More sepcifically, let's use the ideas above for Dick's Drive In.
Depending on the success of the branding and the events around Dick, this could mean interviews (links) and social shares. If developed right, a meme could develop around a particularly funny photo with captions.
Van with Slogan "Dick, the man with the Van"
This has Reddit written all over it. There are some possible reputation issues with famililes and what a van might mean to parents (think abduction vans), but you get little to no reward without some risk. This would do great with the festivals in Seattle and online. Think about how many people would tweet and share photos with Dick and the Van? All of these mentions and shares can have a positive impact on your search metrics. And Redditors would be all over talking about this promotion.
Depending on the slogan, the shirts could be sold on the website. If good enough, they could drive people to the site via friends. How many times have you asked or been asked about an awesome shirt? The shirts themselves can be link bait. Check out this post from Shoemoney linking to Acquisio for the fact they had an awesome shirt.
What are the great ideas you have had in the past to grow your business? I'd love to hear them and maybe I can give some ideas of how I would turn them into link building ideas.
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Five years ago, as Thomas Friedman put it, “‘Twitter’ was a sound, the ‘cloud’ was in the sky [and] ‘4G’ was the name of a parking space.” It is apparent that the world of social networking is rapidly evolving but it is also fundamentally changing the way individuals and businesses interact. Today, individuals can have real-time communication with their favorite brands, earns special perks for following a retailer, and receive job updates from companies they dream to work at.
This is a space that businesses can no longer ignore. Therefore, the North America Coca-Cola Retailing Research Council (CCRRC) partnered with The Integer Group(R) to provide a five-part series on the current state of social networking entitled Untangling the Social Web: Insights for Users, Brands and Retailers. This series aims to provide the entire retail community with the foundational knowledge to decode the complexities of the social web and seed inspiration for how companies can set a path for change. Topics include: the social networking landscape of today, the allure of social networking for users, social networker shopping habits, and the role brands and retailers can and should play in this space.
Click here to download parts 1-5 of the series Untangling the Social Web.
Japanese media and retail behemoth Tsutaya has a well-known loyalty program with over 35 million members. Shoppers can earn “T Points” at any of the over 46,000 participating retailers and redeem them for an equally diverse array of rewards. Recently, they added a new variety of retailer to the mix: Kirin beverage vending machines. Thirsty patrons need only swipe their loyalty cards when they buy a drink to earn points.
Vending machine loyalty programs have been done before, but hooking them up to a larger network is definitely new news. It seems there is no end in sight for loyalty programs, and it will be interesting to see what opportunities emerging technologies such as NFC could allow in the future for this space.
Contributed by Integer Asia-Pacific
Photo source: ubergizmo
New documents made public in the legal feud between Apple and Samsung indicate among other things that retailer Best Buy had told Samsung it was processing Galaxy Tab returns from unhappy customers who thought they were getting an iPad.
Editor’s note: Leo Chen is a former product manager at Amazon and is currently the co-founder of Monogram, an iPad fashion discovery and shopping app funded by 500 Startups. You can find Leo on Twitter @leoalmighty; this article builds on one he previously wrote for us, here.
Mark Suster’s post on why “media is racing to the middle” got me thinking about how fashion is moving in the same direction. To summarize Mark’s thesis: plummeting video productions costs and lower distribution barriers are allowing a new generation of content producers to compete against the big studios. The “race towards the middle (i.e. torso)” starts with YouTube leading the charge from the long-tail and big players like Hulu and Netflix investing in more niche content from the head end. In other words, there’s a huge opportunity for high quality content produced for large niche markets.
Fashion As Content
How does this apply to fashion? Historically fashion “content producers” (i.e. designers/brands) had the following distribution options:
- Wholesale – wooing retail buyers into carrying their line
- Vertical retail – opening physical retail stores.
Both of which are extremely high risk. If retail buyers don’t like your merchandise, you’re stuck with unsold inventory. If you opt to open your own store, the upfront capital investment is an insurmountable barrier for most.
I believe we’re witnessing the beginning of a new class of brands/designers producing high quality apparel for niche audiences. At the head-end, e-tailers like Gilt are helping lesser known brands get exposure (albeit at heavily discounted prices). Traditional retailers like Nordstrom and Macy’s have been investing in niche in-house brands like Faconnable and Inc for years. At the tail-end, Etsy is a channel for aspiring designers to get distribution. Boutiques also dominate the long-tail and startups like Shoptiques are helping these boutiques expand online (pushing boutiques up the curve).
Niche e-Tailers On The Rise
The hottest fashion segment today is vertical retailers targeting the center of the curve. Bonobos is a prime example of a vertical retail success story. They were able to establish themselves as a pure-play, web driven vertical retailer. Traditionally, web retailers had to carry other brands before moving into private labeled goods. Brands needed brick-n-mortar for distribution before setting up their own physical or web stores. Bonobos turned that on its head and built a web-only brand.
Recently, sites like ShoeDazzle, Everlane, BeachMint and Indochino are taking a similar web-only approach. By foregoing the middlemen in the value chain and the costs of maintaining physical stores, these e-tailers are able to cut the waste in apparel distribution. As a result, consumers benefit from higher quality goods at lower prices.
Becoming Web Famous
But for every Bonobos and ShoeDazzle, how many other great brands are out there struggling to rise above the noise? This current wave of vertical retailers share a common trait; they are tech savvy and understand how to leverage the internet and social media as a distribution channel. I believe there is a large, underserved community of aspiring designers that are largely clueless when it comes to building a web business or manufacturing apparel at scale. However, the real design talent likely lies within this underserved designer community.
How disruptive is pure-play vertical retail?
J.Crew was founded in 1983 as a catalog driven, vertically integrated retailer. It took J.Crew well over a decade and dozens of physical retail stores later to become a billion dollar business. This was before the age of Pinterest, Facebook and other social discovery channels. In comparison, Bonobos was founded in 2007 and after 5 years, their revenue numbers are in the $15-20M range from figures I’ve read; far from a billion dollar business and they’ve already begun carrying 3rd party brands. Don’t get me wrong, Bonobos is a great business but I see them more as a “content producer” rather than a disruptive platform like Hulu or Netflix.
As discovery commerce improves and consumers broaden their tastes, I question whether pure-play vertical retailers will ever become billion dollar powerhouses.
I consider myself to be fairly fashionable and have been loyal to a handful of brands. But over the past year, I’ve found my brand loyalty straying as sites like Gilt have exposed me to new brands I’m rather fond of. My monthly Bombfell subscription goes even further; putting pieces from up-and-coming designers I wouldn’t have heard of otherwise right in my hands.
Long-Tail Opportunities: Discovery & Manufacturing
Discovery. Better discovery and showcasing of products is where the next billion dollar opportunities are:
- Pinterest’s 10 million monthly active users, most of which were amassed over the past 18 months, could potentially generate $45M/yr for Pinterest from affiliates alone. That’s already more than twice the revenue of Bonobos without the burden of carrying inventory.
- Sites like Joyus and Kaleidoscope found innovative ways to help consumers discover new brands and designers.
- Fab and Fancy are leveraging both professional and social curation with a drop-ship model.
- ModCloth and Karmaloop have been carving out their niche as e-tailers.
- I was speaking to a Zulily investor last week and learned that their business has been largely focused on exposing new brands rather than established ones (Zulily raked in $150M last year).
As this trend continues, fragmentation will become increasingly overwhelming. Companies like Pinterest or Fancy have a platform mentality and it’s quite possible that one of these platforms could become the mesh that ties together all these e-tailers and become the ultimate discovery engine.
Manufacturing. Unfortunately, the physical limitations of manufacturing and distributing apparel won’t go away like they did for books, music and video. Musicians and cinematographers can synthesize their creations with software and distribute it to millions. Fashion designers have far more hurdles to overcome to manufacture their designs at scale and distributing to millions of consumers.
My father used to manufacture denim for ‘7 for All Mankind’ and ‘Forever 21’, it’s a painstaking process where fabric, buttons, labels and zippers have to be sourced from multiple vendors and manufacturing is often an iterative process to get the perfect wash and softness. This part of the value chain is often overlooked.
Every fashion designer I’ve met had to learn about manufacturing from scratch and often traveled to Asia to source materials. More often, reputable manufacturers refuse to take low volume orders so up-and-coming designers often suffer with low quality manufacturers or settle for higher cost production in places like Hong Kong.
I believe there’s a huge opportunity in helping designers group purchase materials and manufacturing capacity so designers can focus on what they do best, designing awesome clothes.
If the thought of buying apparel primarily online still sounds far-fetched, we can look overseas for some indicators. According to Benjamin Joffe, founder of the Asia-based consultancy Plus Eight Star, “[This] is already happening in Asian markets where offline retail is less mature or markets ahead of the US in terms of digital retail. In China, Vancl did $1.6bn in online apparel sales in 2011. Korea’s share of online vs. offline retail is possibly the highest in the world, while Japan’s mobile commerce passed mobile content in value years ago.”
In summary, it looks like the big money will still be in the platforms because they enable the democratization of commerce. Be it a discovery platform or one that helps new designers go to market more efficiently at lower costs. The web is empowering a new generation of fashion makers with lower manufacturing and distribution barriers while cutting out the fat in the value chain. I suspect we will see many more niche designers generating $1-10 million in annual revenues. For once, the little guys can have their products showcased side-by-side with the Pradas and Guccis of the world and quickly build multi-million dollar brands. It’s deflationary economics at its finest, and unlike technology, the new guys can offer equal quality merchandise as the incumbents from the get-go.
On the heels of last week’s report that Amazon is working on a smartphone, another mainstream media outlet claims the retailer is already testing handsets sized between four and five inches and could begin mass production of a device as early as late 2012.
Editor’s note: Leo Chen is a former product manager at Amazon and is currently the co-founder of Monogram, an iPad fashion discovery and shopping app funded by 500 Startups. You can find Leo on Twitter @leoalmighty.
Death of brick-and-mortar retail
Andrew Chen recently recommended a video to me, which inspired this post. It’s a keynote by Ron Johnson, the CEO of JC Penney and the man behind Apple’s retail revolution. In the video, Johnson spoke about the history of the department store and why JC Penney has fallen behind.
It wasn’t very long ago that stores like JC Penney, Nordstrom, and Gap were the pinnacles of fashion retail. These retailers provided better products at unbeatable prices. Retail buyers acted as personal curators for customers and the in-store experience was exceptional.
Then came e-commerce. Predictable products like books, CDs, and electronics drove the first wave of e-commerce for e-tailers like Amazon. But fashion lagged behind. Consumers want a tactile, in-person experience when it comes to garments. They need to touch and try it on. Even as e-tailers offered lower prices, consumers preferred to shop in stores.
That all began to change when Zappos came along with free shipping and returns; customers are encouraged to order multiple sizes and colors, try on the items in the comfort of our homes and return what we don’t want. For free. Coupled with better product visualizations (large images, multi-angle views – see Warby Parker and MyHabit), consumers are increasingly turning to the web for their fashion needs.
‘Apparel and accessories’ is projected to be the leading category in e-commerce in the US over the next 5 years.
But soon, online retailers will also become less relevant
The bar for e-commerce is rising every day: great visuals and free shipping are fast becoming commoditized. If product, price and service are the same, consumers will grow indifferent towards the seller.
Retailers still drive marketing, supply chain and distribution for designers and brands, but how long before brands figure this out themselves? Social curation and discovery tools like Pinterest and Fancy are leveling the playing field for retail marketing; Amazon is disrupting supply chain and fulfillment (more on this next).
So why are we still shopping at a handful of our so-called “favorite stores”? Because the internet has a noise and discovery problem. I believe that’s where the next wave of fashion tech innovation will take us.
Pinterest has found an optimal balance between aspirational browsing and shopping. Social shopping is more about discovery, conversations and relationship building, something that’s apparent in the way Pinterest users interact.
As Pinterest evolves, they will focus more on monetization and driving direct commerce. They have already experimented with affiliate links and the Rakuten investment is a strong hint at direct commerce. Here’s what I predict Pinterest might do next (purely speculative, of course):
- Branded pages for brands, stores and boutiques
- There’s already evidence that Pinterest users spend more money than Facebook users.
- Pinterest could compete directly with Facebook pages by offering brands a better way to showcase products with access to a higher quality audience.
- Integrated/Universal checkout
- If users are already discovering products through Pinterest but going off to merchant sites to transact, Pinterest should own that transaction and offer a consistent user experience.
- For smaller retailers and boutiques, Pinterest could integrate, acquire or build their own version of Shopify and let merchants sell directly on the Pinterest platform.
- For large retailers and brands, Pinterest will have to form partnerships and integrate with retailer payment systems: essentially selling products on Pinterest, and having the retailer drop ship inventory. Retailers may resist this initially because Pinterest will effectively render the merchant less relevant.
- Brands will be more inclined to work with Pinterest because they see it as an effective distribution channel. Brands can ultimately skip the retailer if they can get distribution through Pinterest. Fulfillment by Amazon (FBA) solves the logistics challenges — brands can simply ship inventory to an Amazon warehouse and have Amazon handle fulfillment. Consumers get the added benefit of Amazon Prime.
- Create an e-commerce channel
- To mitigate the risk of disrupting (and irritating) current user, Pinterest will likely create a separate shopping channel if they decide to focus on commerce (e.g.shop.pinterest.com).
- This shopping channel will be product and commerce focused. You won’t find the cute puppies and fortune cookie quotes here, but you can bet Pinterest will leverage all your data for targeting.
Challenges Pinterest will face
As Pinterest scales, the biggest challenge will be surfacing signal buried in noise. It’s the Facebook Newsfeed problem, but much more difficult because of its focus on fashion and other tastemaker products.
- Facebook is about people, so to make my newsfeed relevant it has to factor in the quality of my relationships. Who am I closer friends with, who is my family, which fan pages do I interact with most, etc. This is easy because we give Facebook that information every time we look at a friend’s photos, like a status update or comment on a post. Facebook doesn’t care what content we interacted with; it only needs to know who produced that content.
- Fashion and other tastemaker products (e.g. home decor) are highly subjective, which means that I don’t necessarily like the same clothes or sofas as my closest friends. If I like a picture of a cute puppy my friend pinned, doesn’t mean I share his taste in fashion. Aside from existing Pinterest categories, they will have to find ways to add deeper tags on the products pinned (e.g. brand, color, style, season, fabric, patterns, etc…) to accurately target.
What’s next in fashion tech?
To date, most fashion tech companies are more commerce than tech. If you look at Gilt and Fab, they’re primarily commerce companies built on fairly standard e-commerce backends with some slight twists. It’s hard to drive disruptive innovation when your KPI is revenue.
In order to fundamentally change the way people shop, we will need teams with fashion experts, product visionaries, deep technical horsepower and growth hackers. It’s a hard combination to find, especially when most hackers in the valley shlep around in jeans and t-shirts — they’re not their own target user.
What will online fashion shopping be like in the future? I believe today’s multi-browser-tab search and filter behavior will feel as ancient as printed maps and yellow pages are today.
When I have a specific purchase in mind:
- I picture myself telling Siri that I’m looking for some sneakers as I’m driving home from work.
- When I get home, sink into my couch with my iPad or turn on my Apple TV, I’m shown pages of sneakers specifically curated for me, in my size.
- I choose a few that I like, tap buy, and the shoes show up the next morning on my doorstep.
When I’m in the mood to browse:
- I’m shown the latest collections and recommendations from my favorite designers, fashion bloggers and influencers (without having to search and filter on multiple websites).
- Upcoming designers are recommended to me based on my style and preferences. Some of these recommendations are computer generated, some are handpicked by designers or personal stylists.
- I won’t just be browsing product photos as I do on nordstrom.com today, it will be an interactive experience with inspiring looks, runway videos and beautiful images. Like Tom Cruise’s command center in Minority Report, except I am surrounded by Prada, Varvatos & Converse.
- I can’t tell the difference between product and advertisement because everything can be purchased with a tap or a drag.
- If I order by 11am, products will be at my doorstep by 6pm same day (Amazon already does this in China).
Welcome to the future.
How are Amazon’s sales growing so dramatically — 30 to 40 percent quarterly for the last umpteen quarters — when even the big retailers are struggling to grow 1 to 2 percent? In record time, Amazon has taken on the Goliaths of retail yesteryear with their massive resources, nationwide store footprints and well-known brands, and turned them into isolated Davids.
In 17 short years, Amazon has grown to be the 12th largest US-based retailer, larger than even Macy’s or Staples. Amazon’s 2011 online sales of $48 billion dwarf every competitor’s online sales, and are larger than the next ten online competitors combined including Staples.com, Apple.com, Walmart.com, Dell.com, OfficeDepot.com, QVC.com, Sears.com, Netflix, CDW, and Bestbuy.com.
What is driving Amazon’s amazing growth is a network effect, the likes of which have never been seen before in retail. For many customers Amazon is the one-stop shop where they start and end their shopping.
This suggests the question: how did it get that power?
Amazon’s incredible network effect has exponentially sped up, allowing it to enter new categories with ease thanks to a massive customer base of at least 160 million customers and tens of millions of items from thousands of retailers (and Amazon itself). Amazon is indisputably winning the war for online market share. But this war is not just an online war.
Amazon’s wickedly effective loyalty program, Amazon Prime, has made it really easy to buy across product categories too. Netflix now faces a formidable foe with Amazon’s entry into video (conveniently bundled into Amazon Prime). And the entire B2B sector is wondering about its fate with Amazon’s recent B2B launch of AmazonSupply.com offering 500,000 industrial and commercial items at launch.
For these diminished Davids, a trail of dead and struggling retailers in books and consumer electronics is just the beginning. And thus far, nary a retailer could stop formerly loyal consumers from leaving their stores.
With mobile devices entering into retail stores, the war has also become a physical store war which will affect retail survival. Few retailers have the customer base and product selection to go up against Amazon alone. Retailers have their backs against the walls trying to defend their higher cost structure and often higher prices against Amazon’s likely lower prices accessible on every smart-phone in the middle of their stores.
In this war for retailer survival, retailers can employ four stand-alone strategies to improve their odds:
1. Offer exclusive products that aren’t easily found elsewhere – Retailers can’t just sell commoditized products and hope to be successful. They need to sell custom products or unique products that are exclusive to them. This will require retailers to vertically integrate and become product designers and not just product sellers.
2. Add services that can’t be shipped in a box – Retailers that invest in services which customers value have a defensible proposition. As one example, pet retailers now offer in-store grooming, vet care, boarding and day care, all services that can’t be duplicated online.
3. Retailers need to double-down on their digital focus and investment, not brand legacy. Whatever they’re doing now, it’s just not enough. Retail CEOs spent far too much time on their legacy business of retail stores and not enough time on their future business of online and mobile retail. Digital strategy cannot just be delegated to the “SVP of Digital” but rather needs to be part of a CEO’s day-job.
4. Lead digitally, support physically – Retailers need to flip their mind-set from using websites to support stores, to using stores to empower websites to compete against Amazon (and all competitors). Retail stores can be potent weapons in retailers’ business plans. Hundreds/thousands of retail stores provide the proximity to customers that Amazon lacks despite dozens of fulfillment centers. With buy online, fulfill from stores, online customers get next day gratification. With buy online pick up in store today, online customers enjoy same day gratification, a superior option to Amazon’s delivery times.
And if any or all of the above stand-alone strategies aren’t good enough (and they likely aren’t), retailers need to find allies in the customer loyalty war. Taking a historical perspective that retailers should heed: great wars in history are rarely won alone, but rather with the help of allies. There’s no reason to attack each other when they share a common foe. In an alliance, they have a fighting chance of survival.
Retailers should join a network solution like ShopRunner – a growing consortium of over 60 retailers harnessing that alliance including ToysRUs, PetSmart, American Eagle, Sports Authority, Newegg and Blue Nile who are cooperating to provide a wide product assortment to ShopRunner members driving sales across the network. ShopRunner’s members are motivated to buy across the coalition’s websites with unlimited free 2 day shipping and return shipping, and across retailers’ stores with the option to pick up packages at designated ShopRunner PickupPoint locations. As such, ShopRunner members end up buying more from ShopRunner participating retailers (which of course, don’t include Amazon).
Fiona Dias is the Chief Strategy Officer at Shoprunner and was formerly the head of e-commerce at Circuit City.
Photo via Robert Scoble/Flickr
Design is determining the winners in everything mobile. The most successful players are focusing on one thing: How to make products, services, and devices as compelling and delightful as possible – visually, and experientially. MobileBeat 2012, July 10-11 in San Francisco , is assembling the most elite minds to debate how UI/UX is transforming every aspect of the mobile economy, and where the opportunities lie. Register here.
Filed under: VentureBeat
Amazon is already one of the best places to land a great smartphone deal online, so of course the retailer is stepping into the wireless resale market — starting with Japan.
Amazon will soon start selling prepaid SIM cards for Japan’s NTT Docomo LTE network as an MVNO, or mobile virtual network operator (like Boost and Virgin Mobile), the Verge reports based on earlier reporting from Nikkei. This marks the first time that a foreign company will offer wireless service within Japan, and for Amazon it’s also a big step towards controlling the entire wireless ecosystem.
The prepaid SIM cards will offer 500 megabytes of data and sell for a flat-rate fee of ¥1980 (around $25). With typical Japanese smartphone contracts going between $63 to $75 a month, according to the Verge, the prepaid cards would be a much better deal for consumers who don’t need to use a ton of data. The cards will function on NTT Docomo’s phones and tablets, as well as devices like the iPhone built to “foreign specifications.” Amazon is also teaming up with Docomo for the summer launch of its Kindle e-readers.
I’ve honestly been counting down the days until Amazon decided to jump into the wireless business on its own. At this point it’s not too difficult for companies to snap up extra bandwidth from larger carriers, and Amazon is in a unique position to sell cheap mobile devices as well. If these prepaid SIM cards take off in Japan, I wouldn’t be surprised to see them quickly spread to Europe and other areas where SIM-swapping is common, and then eventually bundled with cheap devices in North America and the rest of the world.
We’ve asked Amazon for more details on the news, and will report when we hear back.
SIM card image via Luciano Belviso/Flickr
The agreement is for up to $31 million in cash, plus stock, bringing the total estimated value to be $151 million. Bazaarvoice says the acquisition should close before the end of July.
The companies plan to combine their technology, content, and data. Both offer social commerce products that allow retailers and brands to collect and syndicate customer reviews, as well as other content. The release says PowerReviews’ self-service product will allow Bazaarvoice, which has been focused on larger companies, to expand into the small- and medium-sized market.
The combined company supposedly serves nearly 1,800 clients globally, including half of the Internet Retailer 500.
PowerReviews has raised a total of $37 million in funding from Menlo Ventures, Draper Richards, Lehman Brothers, Tenaya Capital, Four Rivers Group, and others. Bazaarvoice, meanwhile, went public earlier this year.