Category Archives: Miscellaneous

Amazon is Not a Threat to Best Buy, but Amazon, Walmart, & Target Are!

Best Buy is having problems. It’s closing 50 stores and, according to some analysts, could close over 200 stores in the next few years. For some stores, the best they can hope for is that they are mistaken by Chuck’s enemies for a BuyMart in off hours and blown up so that they can at least collect the insurance payout. For others, they are going to find out what Circuit City found out when their circuits started frying.

Why is it having these problems? According to recent articles, including this one in Forbes which says that Amazon is Not a Threat to Best Buy, there is speculation that Amazon, and other big web stores that are offering the same brand name consumer electronic devices at greatly reduced costs are stealing sales and stealing Best Buy’s customers and profits. And while this may be the case for accessories (like USB drives), phones, MP3 players, and even netbooks and laptops, where shipping fees are small (compared to the total cost of the purchase), it’s definitely not the case for larger appliances and electronics product because:

TV profitability is minimal and getting worse online. Shipping costs go up, TV prices go down, and accessories are hard to sell online. This does not make for a profitable business. We continue to believe third party sellers are not selling big ticket on Amazon like they were because they are losing money. Some categories remain great, like cameras and headphones, but ultimately, pick up in store to avoid shipping will work and only become more prevalent post the sales tax arbitrage is over.

Unless I want a previous generation big-screen HDTV and can get a kick-ass clearance deal, I’m not ordering a TV online because the shipping charges will probably be $100 or more, and if something is wrong with the TV, I might have to pay the same again to send it back. It’s not worth saving $50 on the purchase price if I have to pay $200 in shipping. And while the average consumer might fall for a red tag sale where you inflate the base price so you can take 30% off instead of 10%, they’re going to see the grand total and also balk at an online purchase of such an item.

However, this doesn’t make the case for buying that new big-screen HDTV at Best Buy. Sure, they have a bigger selection than most other stores on the showroom floor and it’s usually the case that they have at least one employee per department who knows more about the products than anyone at a big-box department store is going to know about the same product, but, in today’s marketplace where everyone wants to GroupOn the TeamBuy, debt is high, income is flat, and the possibility of losing your job is always around the corner, no one wants to spend more than they have to for a commodity item. So, now that they can see something in the store, decide they want it, check Target’s mobile website, see the same product is 10% cheaper in the Super Target down the street, why would they get it at Best Buy? Especially if they are not purchasing an extended warranty? And if they happened to see that same product at Walmart last week 15% cheaper? Plus, the fact that it’s probably on Amazon for 10% cheaper tells them that if they don’t want it today, at least one big-box department store is going to have it cheaper. So, while Amazon on its own is nothing to fear from Best Buy’s perspective, Amazon & Target or Amazon & Walmart combined are.

Until Best Buy can offer a better buying experience at the same price as these big box stores on all the big (ticket) items they sell, the incentive to buy at best buy is not going to be there. Especially given the state of customer service at these stores recently. Consider the plight of a customer at the Greenville, South Carolina store who was subjected to porn when visiting a best buy store, or the doctor who was repeatedly ignored AFTER indicating he was there to purchase a $200 product at that store on that day. In fact, when I think about it, if they don’t fix their customer service issues, they probably won’t survive long enough for the Amazon-Target or Amazon-Walmart tag-team to take ’em out. Especially since you can’t buy more than one item through their Canadian web store at a time! It’s a shame. They used to be great. Now …

Are the Traffic Ranking Websites The New SEO Scams?

As regular readers of this blog will know, back in 2009, SI briefly claimed the top spot on the traffic ranking engines during the summer (see this post). Before then, it was in the number two position for quite some time, and, according to these traffic ranking sites, remained strong in the number two position until about last summer. Then, about the same time that most of the major ranking engines starting introducing premium accounts and services, it started falling — rapidly — even though traffic has been holding steady, and often increasing 2% to 3% month over month, for the past year.

According to these respected traffic ranking sites, which used to at least be directionally accurate, it now gets between 1,000 and 6,000 visits per month. Are you fracking kidding me? On average, SI gets between 4,300 and 5,000 visits per day, which averages out to between 30,000 and 35,000 visits per week, and between 125,000 and 150,000 visits per month (which translates to somewhere between 1.5 and 1.8 Million visits per year). Not Perez Hilton traffic by any stretch of the imagination, but still quite respectable in this space!

Here’s a snapshot of traffic that I took a few days ago using the built in statistics tool in the GoDaddy QuickBlog hosting service. Between May 22, 2012 and May 29, 2012, SI received between 3,500 and 5,500 visits each day and over 36,000 visits in that week.

SI Traffic for May 22 to May 29, 2012

However, if I pay for premium membership, most of the traffic ranking sites will allow me to install (updated / more accurate) traffic monitoring capabilities (which translates into custom javascript / image loads) that will allow the sites to track my traffic more accurately (and do what GoDaddy and Google do for free). I don’t know about you, but if this isn’t an SEO scam legitimized, I don’t know what is. (Short story, I’m miffed, not giving them a dime and they can all go to heck!)

Has anyone had similar experiences with these sites over the past year?

What Impact Will the National Defense Authorization Act (NDAA) Have On Your Supply Chain?

According to a recent press release over on the IHS site, stringent new counterfeit-part regulations in the 2012 U.S. National Defense Authorization Act (NDAA) may have broad international implications that could impact hundreds of of overseas companies that supply Billions of dollars’ worth of items to the U.S. Government. This act, which was signed into the US law on December 31, 2011, not only authorized 662 Billion in funding “for the defense of the US and its interests abroad”, not only included Title X, Subtitle D on “Counter-Terrorism” which deal with the detention of persons the government suspects of involvement in terrorism, but also contains 8-page section 818 on the “detection and avoidance of counterfeit electronic parts” buried in its 565 pages.

This section states that the secretary of the department of defense shall issue or revise guidance … which … shall address requirements for training personnel, making sourcing decision, ensuring traceability of parts and shall revise … the Federal Acquisition Regulation to address the detection and avoidance of counterfeit electronic parts and The revised regulations … shall provide that … covered contractors who supply electronic parts or products that include electronic parts are responsible for detecting and avoiding the use or inclusion of counterfeit electronic parts or suspect counterfeit electronic parts in such products and for any rework or corrective action that may be required to remedy the use or inclusion of such parts.

In addition, the act states that the Secretary of Defense shall implement a program to enhance contractor detection and avoidance of counterfeit electronic parts and the program … shall require covered contractors that supply electronic parts or systems that contain electronic parts to establish policies and procedures to eliminate counterfeit electronic parts from the defense supply chain, which policies and procedures shall address

 

 

  • the training of personnel
  • the inspection and testing of electronic parts
  • processes to abolish counterfeit parts proliferation
  • mechanisms to enable traceability of parts
  • use of trusted suppliers
  • the reporting and quarantining of counterfeit electronic parts and suspect counterfeit electronic parts
  • methodologies to identify suspect counterfeit parts and to rapidly determine if a suspect counterfeit parts is, in fact, counterfeit
  • the design, operation, and maintenance of systems to detect and avoid counterfeit electronic parts and suspect counterfeit electronic parts, and
  • the flow down of counterfeit avoidance and detection requirements to subcontractors

 

 

 

And many other requirements, along with punishments for offenses which an include 2 and 5 Million dollar fines for individuals and 5 Million and 15 Million dollar fines for corporations for first offenses with second offenses garnering fines of up to 30 Million dollars.

This is of grave concern, because the legislation applies not just to counterfeit parts, but suspect counterfeit parts. An organization that supplies parts that are suspected to be counterfeit, whether proven counterfeit or not, will have to remedy the situation on its own dime (which could cost Millions to mint), and if it doesn’t do so satisfactorily, could be fined Millions of dollars on suspicion. And given that the reports of counterfeit parts have soared dramatically in the last two years, with 1,363 separate verified counterfeit-part incidents in 2011 as compared to 324 in 2009, this is a serious concern for anyone supplying products to the US Government. Given that many of these counterfeit parts are commercial electronic components that have wide use across every major technology end market, this is an especially serious concern for suppliers and manufacturers in electronics supply chains.

It would appear that this puts the need for supply chain security and risk management in your electronics supply chain at an all time high, now that even suspected fraud can bankrupt your company. The impact of this legislation could be much worst than 10+2. What do you think?

A Great Guide to Enterprise Influence(rs)

Over on the Enterprise Irregulars, Paul Greenberg recently published part 1 of a 4-part series on how to deal with and think about influencers and the basics around building an influencer/analyst program that is a must read for any Marketer or PR Pro looking to get the attention of one or more influencers to cover their product or service. The post is great because it contains a number of key takeaways, including this key point that most non-PR Pro’s miss: Do Your Homework: understand who they are, not just what they are. That means learn something about them as actual human beings.

It’s amazing how many PR / Media Relations people don’t understand why they should do this. They think that if they just spam the same bullsh!t press release to three thousand e-mails, they will get results. I can tell you that, like the influencers named in the post, every day I get dozens of spam press releases that just get dumped to a spam folder that gets emptied, unread, once a month. Why? Well, not only do I not have time to read them all, and not only do I have no interest in hyped up carbon copy that doesn’t bother to tell me how the product or service will benefit my readers, but I have no interest in wading through paragraphs of hype to figure out if the product or service being hyped is even related to Supply Management. (Now that SI gets about 125,000 visits a month, it gets on spam lists for political and religious products too, for example.) But more importantly, the doctor not only dislikes vendor press releases, but despises requests to blog about or post a press release. SI is about solutions, not about hyperbole. And, if the PR / Media Relations person had taken 5 minutes to actually visit the site and read a few paragraphs of the FAQ, they’d know that. (Unlike many blogs or sites, just about everything a PR / Media person would want to know is in the FAQ!) Furthermore, while multiple press releases typically gets a sender on a spam blacklist, a request for demo is usually answered in an hour with “here’s how much notice I need and, in this timeframe some days I could fit you in”. But I digress.

The point is influencers are people … insanely busy people. While I typically don’t get the 30-50 requests for demos, interviews, and story pitches that Paul gets in a week, I can tell you that I typically get 20 – 25 requests for interviews or stories, with typically 20-24 of the form “Would you like to talk to X / Would you please cover Y quoted/referenced in the Press Release before”, and, these days, ignore all of them. On the other hand, the one that says “we have just released Product X that does A, B, and C for Purchasing/Procurement/Logistics/Supply professionals that we believe would be of benefit for your readers because you cover Z, would you like a demo/discussion” gets a response within 24 hours. Unless, of course, this sentence is expanded into two pages that compares the product to the holy grail, in which case I assume that the company, like the author, has way too much ego and, like Paul, shake my head in disbelief and relegate it to the bottom of the queue.

Now, I might not be front page WSJ (but, in our space, who is?), but if you are building Supply Management technology, can you really afford to kiss-off a niche site known for its coverage of supply chain technology that gets 1,500,000 visits a year? (To put this in perspective, based on a recent post, the Spend Matters family of blogs gets about 3,600,000 visits a year — or 900,000 visits per blog on average, with SpendMatters and MetalMiner getting the majority of visits.) Maybe you can, but since you don’t know where your next lead is going to come from, why should you? (Especially since a demo and subsequent coverage costs you nothing! And this holds true for many influencers in the space.)

Plus, as Paul points out, an influencer can impact

  • the purchasing decision of a prospect
  • the thinking of an entire industry
  • the mindshare that a company will have
    which indirectly influences the purchasing decisions of a prospect
  • institutional and individual investors

and can often do so with much more credibility than you can acting on behalf of your organization.

So where do you start?

  1. Figure out what kind of influencer is right for you — be it an institutional, boutique, independent, established, newly emerged, vendor, media, or influencer influencer. It will depend on the specifics of your product/service and the market you want to reach, and you should definitely read Paul’s post for insight on how to make the call, and, depending on what type of influencer is right for you, who some starting influencers are.
  2. Then, as we stated in the beginning, do your homework.
  3. Remember it’s the person, not the organization, that you are reaching out to.
  4. Say the right thing.
  5. And read Paul’s 4-part series for the details.