DANGER AHEAD - Jeff The Retail Giant Killer Strikes Again, But Did He Finally Make A Fatal Error ?

DANGER AHEAD:

Jeff The Giant Killer Strikes Again,

Outmaneuvering The Retail Giants. . Again.

BUT – DID HE FINALLY MAKE A FATAL ERROR ?

For years, Jeff Bezos has single-handedly led retailers away from the hidden realities (Chart 1) of the $4 Trillion Online V-Commerce Market he intends to dominate. (Chart 2)

He skillfully led them to a place of failure (Same-DAY delivery) to Jeff’s significant benefit,

Exactly as in the Fairy Tale:  Jack The Giant Killer.

As farfetched as this may seem to some of you,

Even this Fairy Tale pales in comparison to Jeff’s astonishing success, as most retailers already know the hard way.

It’s mostly due to his continuing and clever deceptions that have already led to the death of myriad retail Giants (e.g. Border Books, Circuit City, Blockbuster, etc.)  – just like in the Fairy Tale.

For years, we’ve been warning retailers that “The Key to The Giant’s Castle” is 30 to 45 minute (Same-HOUR) fulfillment and delivery (Chart 1),

But Bezos convinced them Same-DAY was the Secret to Success, instead of the Consumer’s #1 Choice:  Same-HOUR Fulfillment  (Chart 1),

And everyone quickly endorsed that erroneous conclusion,

Ignoring The Obvious Reality: 

Same-HOUR is less costly than Same-DAY when done right,

AND Same-DAY offers far less Consumer Convenience (33% want Same-DAY),

Than the Consumer’s #1 Choice: 30 to 45 Minute (1-HOUR) fulfillment (83% prefer Same-HOUR). See Chart 1

Then, To Everyone’s Complete Surprise:

Last week, Jeff announced his new 30 Minute Prime-Air “OctoCopter” DRONE Fulfillment Service,

Delivering from his huge new nationwide automated local area warehouses.

Secretly, he’s been quietly developing his Same-HOUR service for some time now,

While letting you believe Same-DAY was his sole objective !

Brilliant Deception – AND IT WORKED – AGAIN – (here’s the U-Tube Prime Air Video if you haven’t already seen it)

NO QUESTION ABOUT IT:  Jeff’s “OctoCopter” DRONES absolutely trump his Same-DAY Service for 80% of his inventory units,

Given the FAA finalizes its new rules governing use of unmanned aerial vehicles in Jeff’s favor,

This will happen when all the objections and difficulties are overcome (especially with someone like Jeff behind it).

All while most retailers are still trying to duplicate his Same-DAY service that he will eventually mostly phase out for all the right reasons.

IN THE MEANWHILE:  This huge Same-DAY Red Herring,

Just gave Jeff a clear and unobstructed pathway to the $4 Trillion Online V-Commerce Market,

Including time-sensitive items like groceries and restaurants and fast food’s “Hamburgers, Fries & A Coke”

Which collectively comprise over 60% of the $4 Trillion Online V-Commerce World Market.

All because major retailers bought into Jeff’s deception,

Ignoring: 

(1)   The Consumer’s #1 preference of 30 to 45 Minute (1-HOUR) fulfillment (Chart1)

(2)   Increased V-Commerce “Networking” Profits

(3)   The opportunity to finally offset Amazon

30 to 45 Minute (Same-HOUR) Rapid Fulfillment always has been the Consumer’s #1 demand,

Which we’ve been trying to tell Bricks and Mortar retailers for the last 7 years, with amazing difficulty,

Until J. P. Morgan came to our rescue in July, 2013 – Chart 2.

And that Jeff’s “OctoCopter” now confirms.

Then, as if that isn’t bad enough;

The Same-DAY Bridge everyone was crossing just collapsed mid-stream,

With the 2013 Cyber Monday’s 19% growth rate triple-trumping Bricks & Mortar store’s Black Friday sales, which, for thefirst time fell 2.9%.

Reality Check:

Things like “Beam-Me-Up-Scotty” and Jeff’s “OctoCopter”  (that Domino’s Pizza and others were testing months ago),

Are things that are Certainly Going To Happen sometime in the future.

But today’s Consumers want FREE 30 to 45 Minute 24 / 7 / 365 Rapid Fulfillment OF EVERYTHING – Delivered In A Flash® . . . . TODAY

Not just a few, small, light-weight items sometime in the future  . . . . . Maybe.

And remember The 4 V-Commerce Pillars which are essential to any successful 30 to 45 Minute FREE 24 / 7 / 365 Rapid Fulfillment V-Commerce Network:

1.      The RIGHT SIZE Professional WELL PAID “Shared” Workforce Pool of Drivers and Customer Service Reps.

2.      A full Consortium of local participating retailers is critical to supporting this huge workforce pool needed for V-Commerce Critical Mass,

That one retailer alone could never achieve – even Walmart.

AND Amazon is proportionately a bigger threat to local bricks & mortar “Mom and Pop” retailers than Amazon is to you.

3.      To attract the order volume needed for items 1 and 2 to achieve Critical Mass,

The right Major Anchor Tenant (Marketing Partner) is absolutely essential:

Same as Anchor Tenants are absolutely essential to every successful Major Regional Mall – NO EXCEPTIONS – NO DIFFERENCE.

And such Anchor Tenants, online & offline, get numerous added benefits for participating – such as:

a.      A low, to no cost prime location in the Consortium Network’s Online “Mall”.

b.      Net-Net 30 to 45 Minute (1-HOUR) FREE Fulfillment and Delivery 24 / 7 / 365 ON EVERY ORDER

At no cost to you as a Major Anchor Tenant

c.       Increased In-Store sales from Cross-Marketing with the other participating local area retailers (similar to any Regional Mall).

d.      Significant ROYALTIES as the Major Anchor Tenant from the added sales of the participating local area retailers

who ALSO have Amazon as their main competitor with no other effective method of competing.

e.      BONUS:  This Patented V-Commerce Network Is 100% Turnkey;

You and Your Staff Do Absolutely NOTHING Extra – EVER.

4.      A “Network Operating Partner” with our 35+ years of experience is needed to support items 1, 2 and 3 above, knowing exactly what to do and more importantly, what NOT to do.

a)      Operating liabilities such as third party product liabilities, traffic delivery accident liabilities and staffing liabilities, etc., are all the responsibility of the Network Operating Partner (similar to any Major Regional Mall and/or FedEx, UPS and USPS).

NOTE:

As you haven’t yet tried V-Commerce, possibly you still don’t believe the above is possible, or even necessary,

Same as you originally didn’t think Amazon and E-Commerce were possible, let alone necessary to most Consumers 15 years ago,

                        And more today than ever before.

And now comes the Amazon 30 Minute Fulfillment “OctoCopter” – Impossible You Say ???

Well Maybe for Domino’s Pizza.

Of course, you could simply continue giving your 30 – 45 minute orders to eBay or Google who are trying hard to copy our Network,

But without Anchor Tenant benefits equivalent, or even close to the above (one of The 4 Pillars to V-Commerce success),

Your order level will be less than optimal, with far more in-store assembly work, and less profitability in-store and virtually no Third Party Royalties (the biggest factor of all).

And eBay and Google are just as much your competitors as Jeff Bezos and Amazon.

“Cyber Monday sales surged, sending online shopping toward a single-day record siphoning consumers from brick-and-mortar stores

The results deliver another blow to physical stores, which just suffered the first spending decline on a Black Friday weekend since 2009.

Web sales this holiday season are projected to climb as much as 15 percent to $82 billion, more than three times faster than total retail growth of 3.9 percent to $602.1 billion”

HOWEVER;  To get your share of the $4 Trillion Online Market J. P. Morgan recently identified (Chart 2),

You need to step out of Amazon’s Fairy Tale into the online reality of V-Commerce starting with Charts 1 and 2

The sooner the better.

BUT WAIT – What Do We Suddenly See When We Look More Carefully ?

Jeff just made a fatal error, as he was eventually bound to do:

Jeff Just Admitted His Achilles’ Heel – 30 Minute Fulfillment Terrifies Him,

Which is why he now is abandoning his Same-Day Red-Herring and touting 30 minute fulfillment – which he can’t yet offer.

Regardless, he is now professing he is way ahead on his 30 Minute Fulfillment.

When The Truth Is: 

Jeff is light years behind on what “most” (but not all) retailers now know is the future of retail – 30 Minute Rapid Fulfillment.

But for those few remaining Doubting Thomases, Jeff’s “OctoCopter” just confirmed our above statements, once and for all.

YES – drones are a great idea – but realistically not any time soon – and further away for large bulky orders (where the real profits are).

But, for sure 30 Minute Fulfillment Drones are coming,

And for sure they are less expensive (well maybe) and more reliable (well maybe not).

But for absolutely sure it’s safe to say V-Commerce is here today, and has a clear 5 to 15 year window before our enhanced version of the drone (or any other “OctoCopter” or Beam-Me-Up-Scotty version) realistically appears.

Jeff is a really bright guy and knows this all too well, including all the pros & cons,

But Jeff had no other choice,

He had to announce his claim to 30 minute fulfillment while he still had the credibility to do so.

Your Chance To Capitalize . . . But The Reality Is:

Jeff needs more time to get his 30 Minute Fulfillment Prime Air Drone into long term profitable operating realities.

And the Bricks & Mortar retailers are probably going to give him the time he needs – before competing in the 30 Minute area.

Thus missing:

(1)   The largest new $4 Trillion World Retail Market of all time, ($2 Trillion U.S.) – Chart 2,

(2)   Their stockholders’ largest market cap gain of all time,

(3)   And their new online customers’ demands.

(4)   Probably the last real chance to offset Amazon.

All in the name of:

(1)   Waiting for other Bricks & Mortar retailers to go first,

(2)   Doing everything “in-house” regardless of the realities,

(3)   Doing nothing “risky” regardless of the higher risks of actually doing nothing,

(4)   Only dealing with Fortune 500 Companies, instead of with accomplished, financially vested, entrepreneurs (Charts 3 and 4).

No wonder Jeff’s deceptions are so successful.

But his competitors (and yours) eBay and Google are not being so “generous”,

Because they grew up in this new online retail generation,

Same as Jeff did, not caring about conventional Bricks & Mortar retailing guidelines.

EBay & Google understand this new generation Consumer and their demand for the Highest Convenience, Widest Choice & Best Price.

And are determined to prevent Jeff from dominating V-Commerce as he now does E-Commerce.

However, while eBay & Google are far closer to 30 Minute Fulfillment success than Jeff is with his “OctoCopter” (and who knows what else),

They are light years away from winning the $4 Trillion World V-Commerce Market without The 4 V-Commerce Pillars.

So you can just imagine;

Jeff is working at warp speed to offset this threat to his goal to dominate the $4 Trillion V-Commerce Worldwide Retail Market.

Someone will win this huge V-Commerce market J. P. Morgan detailed a few months ago,

That we have been detailing for major retailers for the last 7 years – Charts 1 and 2,

We have the Keys To The Giant’s Castle,

But we have always realistically known we can’t do it alone,

AND We Certainly Tried,

But it was bigger than we were, and is even bigger today.

Therefore, Jeff is assured of winning . . . at your expense,

As long as you are willing to let Jeff play his already successful game uncontested.

BUT IT DOESN’T NEED TO BE THAT WAY.

Are you that rare retail exception that is willing to try something powerful, proven and new ?

IF SO, Call us;

We Can Get You There.

Starting with a simple inexpensive TEST City to conclusively prove all the above to you and all your Doubting Thomases.

Most Respectfully,

 

Gail Nichols

www.TheNowMall.com

 

 

Forget The Living Room: Amazon Is Fighting For Your Whole Damn House ! (Including The Kitchen)

Further to “The Unbelievable” portion of our recent E-News (see Chart 1 below) for Big Box retailers:

To further help “connect the dots” to the “Now Believable” and the soon-to-be “Necessity” (see Chart 2 - example for Best Buy), we believe this new article quoting Marc Andreessen, co-founder of Mosaic and Netscape, will be of interest.  (See Article Here)

“These two initiatives could allow Amazon to topple (or at least maim) traditional retail.

“Retail guys are going to go out of business and ecommerce will become the place everyone buys. You are not going to have a choice,” Marc Andreessen told PandoDaily in January.

“We’re still pre-death of retail, and we’re already seeing a huge wave of growth. The best in class are going to get better and better. We view this as a long term opportunity.”

“If Amazon will sell you the same groceries as Walmart and deliver them straight to your doorstep the same day you order them, why make the trip to the labyrinthine monument to capitalism at all?”

We look forward to discussing this with you when you and your executive team are ready for the Unbelievable to become your Necessity.

Thanks,

 

Gail

 

BREAKING NEWS - The Retail Sleeping Giants Are Awakening !

BREAKING NEWS

The Retail Sleeping Giants Are Finally Awakening !

Giving Big Box Retailers The Chance Of A Lifetime To Leap-Frog Amazon.

National Retail Federation’s (STORES.org) May 2013 lead article published last week is appropriately entitled “Moving Fast” which is a powerful double entendre for Big Box retailers.  (see National Retail Federation (NRF) article here).

Principally, this article pertains to the opportunity that enables your team to take a commanding lead in your industry as well as Retail In General.  It says:

“Late last fall, USPS joined a crowded field of retailers and logistics experts, all attempting to find the Holy Grail: the right product, price point and customer for Same-Day delivery.”  (see Chart 1 below)

NOW CONFIRMED:  The Consumers #1 Choice = Instant Gratification

For years, Big Box retailers have heard from us that their solution to Amazon is to focus on the retail consumer’s #1 choice of “Convenience” = Rapid Delivery = Instant Gratification = The Retail Holy Grail (Chart 1).

This NRF article confirms our R&D results shown in Chart 1, which is what the Grocery & Restaurant industries with highly time-sensitive products have known for years, but have never achieved. (Other than Tom Monaghan, founder of Domino’s Pizza, one of our founders.)

The consumer’s #2 choice is Price and their #3 choice is Widest Product Selection – as this article also confirms – and as Walmart has known for years.

It took Amazon 15 years in retail to help prove the point that Convenience (Rapid Delivery = Instant Gratification) is the consumer’s #1 choice.

Now that the roof on retail bricks & mortar stores has finally fallen in because they historically missed this strategic point, this article describes it as follows:

“Amazon has pushed the envelope on what’s possible and has gotten pretty successfully to two-day delivery on a lot of items,”  see Chart 2 for confirmation

Now The Sleeping Giants Are Beginning To Awaken To The New Consumer Reality.

The incredible opportunity for your company is:  These Giants Are Not YET Fully Awake as this article also attests.

This NRF lead article for their May 2013 issue details how Retail Giants are finally being FORCED by Amazon into giving the Consumers their #1 choice:  Rapid Delivery – at great cost and inconvenience and still missing the Holy Grail this article references.

However, this article only deals with “Same-DAY” delivery as Amazon is only doing Same-DAY in select markets, in limited time frame windows (not Same-HOUR 24 / 7 / 365) but this article correctly states:

“From my perspective, there’s a lot of inside-the-industry hype (about Same-Day), but it’s not the customer demanding it.”  Absolutely Correct.  They want Instant Gratification = Same-HOUR. See Chart 1

“only 4.2 percent of consumers use Same-DAY delivery frequently” Absolutely Correct.   83% want Same-Hour Fulfillment – see Chart  1. Offer it and discover the huge market you’ve been searching for – Chart 3 – and with ADDED profits most executives simply can’t conceive or believe – Chart 3.

This article confirms what we’ve been saying for years – Chart 1 – which is “The Retail Holy Grail”:  NOBODY “WANTS” SAME-DAY DELIVERY which means waiting for “something” to arrive “sometime” during the usual 4 to 8 hour time period, or 2 hour windows – same as “waiting for the cable-guy” and then at a huge cost that nobody wants to pay.

People Simply Hate To Wait

This NRF article also outlines why TheNowMall.com does the various things we uniquely do, that others have never done before, such as providing a huge, dedicated CyberValet® Shopper/Driver pool that is necessary to handle on-demand orders in 30 to 60 minutes during the various Peaks & Valleys 24 / 7 / 365 including Seasonal Peaks & Valleys as this article mentions, PLUS Free Delivery Etc.,  Etc. (see Charts 4 & 7 for more details)

Same-HOUR is less expensive than Same-DAY for myriad reasons that the retail industry can’t yet grasp simply because there are a lot of underlying factors that even this enlightened article is wrestling with.  However, we perfected how to deal with these issues years ago even before we did McDonald’s 30-minute fulfillment program or we couldn’t have succeeded beyond even McDonald’s wildest expectations (except we made it “look” too easy !). See Chart 5

But when the retail industry “finally sees the light at the end of the Amazon tunnel”, stand back and watch the stampede, to which this NRF article continuously alludes.

But for now, the Sleeping Giants are only thinking about “Same-DAY” not the consumer’s wish for Instant Gratification = Same-HOUR, simply because Amazon is now only doing Same-DAY, leading the parade again but in the wrong direction, as this article is very clear about.  Where are all the Industry leaders ?

While Same-Day is a huge step forward from their 3 to 10 day delivery position 9 months ago, it’s not the long term game-changer that is sorely needed – see Chart 2.

But the best is yet to come.

Your Chance Of A Lifetime To Offset Amazon & Walmart

As you have been reading our E-News Updates for some time now, you are probably already 90% convinced that only 30 to 60 minute Rapid Fulfillment can BEAT Amazon, while (as this article indicates), the rest of the retail industry is at least a year or two behind you in vision, INCLUDING AMAZON & WALMART !    

To support this:  Last year we were told by one of these still struggling Retail Giants as they started their Same-Day tests:

“Your concept is clearly different in its approach and perhaps one day, many people will shop this way. For now though, we are going to pass.  This is not to say "not ever", simply "not now." (due diligence officer, S. Jensen – August 2012)  Across the country, millions of people every year have been consistently ordering “this way” from our Co-founder, Tom Monaghan’s Domino’s Pizza, for well over 50 years !

In 2010, we were told by one of the largest Regional Mall owners:

“E-commerce will not affect us because 15% of nothing is still nothing” (due diligence officer, P. Flanagan – March 2010) now converting some of their malls to other rental uses.

This is Great News for your Big Box stores !

The MINUTE you open your first SuperCyberCenter Mall in Buffalo, NY,  for your industry competitive reasons against Amazon & Walmart; AS A BONUS, the other 25 top Big Box retailers & Major Regional Mall owners (who are also hurting because of Amazon) will immediately increase their due diligence.  Key media (including Neil Cavuto – Fox News) and most retail Industry Analysts will also immediately focus their attention on this newsworthy event.  They all religiously read our periodic E-Newsletters as Rapid Delivery is a trending topic.

This is because they all know:

“IF” Same-HOUR fulfillment can be done ECONOMICALLY, Profitably & Efficiently, without Interruption to their current store operations, which Same-Day delivery simply cannot ever do – a new world is upon them.

As nobody else on this planet has anywhere near our 50 years’ combined INSTANT GRATIFICATION knowledge and ability – it’s easy for us to prove that it’s practical with a major Marketing Partner.

When The Retail Holy Grail is conclusively proven via a simple test in Buffalo, NY –a small but well-defined test city, this will give you an enormous opportunity at relatively no cost to execute an Industry-Changing Business Method Worldwide that puts your stores light-years ahead of any and all competitors, including Amazon. 

This solution includes more than just Rapid Fulfillment; it brings you incremental in-store sales and ADDED industry profits as well as increased market cap/share value - as we have achieved before as per Charts 6 & 7.

Same-Day Delivery Failure Is Now Reported

Big Box retailers have been hit hard by Amazon and many are doing many great and positive things to offset this damage, but no strategy has yet risen to this extreme long-term game-changing challenge –including Same-DAY delivery.

Your current Same-Day delivery results have been costly and disappointing and have not met your expectations (as this NRF article clearly indicates is true for all retailers), nor has Same-Day delivery in the least offset Amazon’s nor Walmart’s growing threat to your E-commerce future - see Chart 2.

Your Once In A Lifetime Opportunity:

Before the Sleeping Giants wake up to the real future of E-commerce as the consumer is demanding (Chart 1) – now is your chance to Capture Dominance In Retail with a simple field trial of the Retail Holy Grail: 30 to 60 Minute, 24 / 7 / 365,  Instant Gratification, with FREE Delivery with us in Buffalo, NY; then Pittsburgh, PA; then Atlanta, GA, before your national roll-out of your SuperCyberCenter Network.

As Winston Churchill said:  “Americans always do the right thing . . . after they have tried everything else.” And Best Buy has tried everything else, as have most other retailers, and so far everything else has failed to offset Amazon – including Same-DAY delivery.

The obvious is upon you – Instant Gratification: 30 – 60 Minute Fulfillment – 24 / 7 / 365 = The Retail Holy Grail = Same-HOUR Fulfillment.

It’s almost here.  One major retailer is close to launching their first SuperCyberCenter Mall with us. 

Now is your chance to take the coveted Master Worldwide Marketing Partner Position and, in the least, take control of the future of your Industry – Chart 3.

We sure hope your stores join us in the Winner’s Circle.

Please call or email us ASAP.

Thanks,

Gail

 

V-Commerce: Amazon's Newest Weapon Of Choice. Trumps E-Commerce.

Big Box Bricks & Mortar retailers continue to react in conventional ways to Amazon’s growing power, which opens new markets for Amazon to propel their annual $13 Billion (27%) growth via V-Commerce.

Thus Amazon is becoming the Death Star of retailing as we know it today – virtually unchallenged. This continuing disarray is outlined in Chart 1.

V-Commerce (Viral-Commerce): To effectively use one customer group, media group or product group for significant commercial gain.

Why Amazon Is Happy Breaking Even With Online Grocery   (See Article here)

“AmazonFresh could be the online grocery service that finally breaks through to critical mass, all helped by its lack of financial burdens and mastery of logistics.”

“It could also mean that delivery fees are lower, order size minimums are waived,”

“and it certainly could mean that home delivery and in-store pick up will never pay out using traditional metrics and full allocated costs.”

“Finally, Amazon views steady grocery delivery as a “powerful way to drive frequent customer interaction,” and opens up avenues to entice consumers to shop for other products with each order.”

A conventional fulfillment & delivery system using “Traditional Metrics and Full Allocated Costs” misses all the above, putting retailers directly in Amazon’s path, not to mention the loss of infinitely greater “Frequent Customer Interaction” and the incredible Third Party Profits therein – from the $8.7 TRILLION worldwide retail market – including Groceries, Pharmacies, Retailers and Restaurants. (US market equivalent is $2.6 Trillion).

Unbelievable opportunity awaits and most retailers are still in denial, even Walmart; thus giving Big Box retailers a wide open field to win.

For years we’ve been urging Big Box retailers to offer:  “(1) The Highest Level Convenience;   (2) The Widest Product Choice;   (3) The Consistently Lowest Price.”

Most retailers are positioning themselves as unique and entertaining places to shop.  However, when Amazon’s V-Commerce strategy is in full roll-out, there will be panic in the executive ranks of most major retailers.

Amazon’s V-Commerce strategic move in Groceries simply increases these Three Top Consumer Choices further in Amazon’s favor against you, stealing your customers, sales, profits & market cap – see Chart 1.

Although dinosaurs were helpless against the asteroid that destroyed them, Big Box retailers are not helpless against the coming Amazon asteroid.

Given the above:  you have the knowledge of what’s coming.

Given the following:  you also have the knowledge of The V-Commerce Solution:   A SuperCyberCenter® Mall with 30 to 60 minutes, 24 / 7 / 365,  Rapid Online Order Fulfillment and 600,000 Third Party Sellers with stores nationwide, including Grocers, Restaurants, Retailers, Pharmacies – virtually all purveyors of time-sensitive retail commodities. 

It’s a tactic that Amazon and Walmart cannot match, even though they both have similar structures.

The Only Thing Left You Have Not Yet Tried ! – A  SuperCyberCenter Local Area Online Mall – Unbelievable, But Now A Necessity – Chart 2 (Best Buy example)

A SuperCyberCenter Mall with your company name on the marquee is similar to having branding rights to venues such as: American Airlines Center, Best Buy Theater in Times Square, Staples Center in Los Angeles, FedEx Field in Washington, Bank of America Stadium in Charlotte, NC; Wrigley Field in Chicago and MetLife Stadium in New York and myriad similar other V-Commerce marketing branding examples. Those companies paid a fortune for such prized branding rights.

Amazon is close to reaching this Pinnacle of The Consumer’s Choice – but still has a mountain, or more, to climb – however, Jeff Bezos is trying very astutely and will eventually succeed.  Now is your time.

For the sake of all your constituents – relent and Test This V-Commerce Solution with us, starting in Buffalo, NY, lest the Amazon asteroid strikes before you have your defenses in place.

Respectfully,

Gail

Gail Nichols, Vice Chair

The Now Mall

 

So - Showrooming Is Dead ? Actually, It's Just Beginning to Heat Up !

Best Buy company spokesman MattFurman told Bloomberg:

Best Buy is confident that its latest policy change will kill "showrooming" in its stores for good.

Starting on March 3, the retailer will price match all local retail competitors, along with 19 "major online competitors" in all product categories, whenever a customer asks for it, 

“There is no doubt that this new policy ends showrooming for Best Buy customers,”  said Mr. Furman.

This statement assumes: “Amazon Is Dead”. Far From It.

For some time now, we’ve been highlighting our EVERGREEN Pricing Strategy. (Chart 1)  It’s similar to what Amazon and others use successfully.

In a nutshell: “Use higher profits from one product group, or service, to offset competitive pressure on a key product.”

Amazon uses their long time “EVERGREEN” pricing strategy most effectively, applying their “Evergreen Profits” from Sales Commissions from their 4 million Online Third Party Sellers to maintain overall growth and margins while lowering key product prices, long or short term, as need be.

Our EVERGREEN Pricing Strategy is similar, except you use “Evergreen Profits” from Sales Commissions from your 600,000 participating Physical Third Party Sellers (Local stores and restaurants) to lower your in-store and/or online product prices, as need be.

Amazon’s Siege Is On:

It’s not just Best Buy that hopes to keep Showrooming under control with price matching.  So are Target and RadioShack, amongst others.

However, price matching, declared or otherwise, without a long-term offsetting “EVERGREEN” profit source has always been a very risky and uncertain long term DEFENSIVE strategy,

AND it further encourages consumers to use their ever-increasing number of Smartphones in your stores against your ongoing best interests.

Particularly, it invites price wars by web-only retailers like Amazon who measures profits in free cash flow, not margins:

For example, see these excerpts from this Bloomberg article:

·        Amazon scares everyone. There are multiple reasons, but a big one was summarized by Amazon Chief Executive Officer Jeff Bezos in a Harvard Business Review interview posted lasted week, which ranked Bezos as one of the top executives in the world.

“Percentage margins are not one of the things we are seeking to optimize,” Bezos said, to make the counter-intuitive point that he does not particularly care about making money.

“It’s the absolute dollar free cash flow per share that you want to maximize. If you can do that by lowering margins, we would do that.

Free cash flow, that’s something investors can spend.”

·         Bezos has been reliably saying this sort of thing for years. To him, it’s still a land grab. So he’s prepared to cut prices to the bone and add all those freebies to cultivate customer loyalty and drive sales growth.

Then he reinvests it all in more low prices and further expansion, driving additional customer loyalty.

·         If you’re a competitor, it’s the Bermuda triangle of business.

·         And by the way, low margins to Bezos are a competitive advantage.

Jeff Bezos is a Past Master at using his “Evergreen Pricing” as a Sales & Marketing tool effectively.

You Need The Same OFFENSIVE Tool to survive and win.  Only your SuperCyberCenter^© with 600,000 Third Party Seller local merchants is that tool.  (see BEST BUY example in Chart 1 below)

Without such an aggressive long term OFFENSIVE tool to generate a ‘War Chest”, you will not be able to withstand Amazon’s siege against your margins using their “Evergreen Price-Tweaking” to the “Ouch No-Go” level.

And Amazon can do this for years until they win, as they did against Circuit City, Borders, Blockbuster and so many others. 

The Worst Part For You Is:

Your “price-matching” strategy backs you into a corner – it simply tells Jeff Bezos how weak and therefore vulnerable you really are,

You need a permanent Offensive pricing / marketing strategy instead of a Defensive position, expecting the consumer to do your pricing job for you.

AND Amazon will further encourage their Prime members with the convenience and cost savings of FREE Delivery  against you.

All Bezos has to do is concentrate on the obvious and weakest competitor(s) first to simply and inexpensively lessen his siege time and costs against you.

His first target is ALL the top 25 Bricks and Mortar retailers in America, including Walmart – Why Not ?

After all – time is on Bezos’ side - he has all the time in the world – he has nothing to lose, only you do !

The Only Long Term Permanent Solution In Sight:  Your SuperCyberCenter with 1-Hour Instant Gratification with Lower Prices and Wider Choices than Amazon.

Over the last several years, since E-commerce clearly emerged, (Chart 1) you’ve tried everything else, including price matching, and nothing has stopped Amazon’s phenomenal growth against you. In fact it continues to increase.

You’ve also resisted the only Game-Changing solution in sight (Your SuperCyberCenter –  see Chart 1 for Best Buy example) for all the standard reasons such powerful new innovative solutions have always had to overcome.  Trying to do something like this alone looks easy, but it is deceptively difficult – see the first line in Chart 6.

But when you finally see the riches of the promised land, as in all our other Industry-Changing successes, (Chart 5) you’ll never want to leave. (Charts 1, 2 & 3). We Promise.

To truly turn Showrooming in your favor, only a SuperCyberCenter can do it quickly, efficiently & profitably by meeting all three major consumer demands that collectively Amazon can never match:

(1)    Better LONG TERM Pricing than Amazon (supported by Evergreen profits to you);

(2)    Much Wider Product Choice (including time-sensitive groceries, restaurants & fast food – with profit from sales commissions to you (Chart 1) as Amazon does so successfully);

(3)    Super Convenience – 1-HOUR Fulfillment with Delivery (usually in 30 to 45 minutes); The Retail Holy Grail (Chart 4)

And, it’s not just Amazon & Showrooming to Fear.  Google, Microsoft and eBay arealso Gearing Up.

Having the ability to lower prices LONG TERM (while increasing your sales & profits – as Walmart did)  has always been  “The Retail Holy Grail”.

Your ONLY choices are:   Be “slowly eaten alive” by Amazon or do something powerful to “Change-The-Game” to the consumer’s obvious #1 choice: “One-Hour Instant Gratification with Lower Prices & much Wider Choices”.

In today’s retail world, Amazon is Goliath, but we are David – Chart 1 says it all.

All you need to do is:   Make That Call to us to schedule your initial trials.  Prepare to assuredly win this decisive battle.

We’ll answer ANY remaining questions you may have that are blocking you from achieving the Sales & Profits in Charts 1, 2 & 3.

As well as stopping Amazon’s “Showrooming Siege” against you, Dead In Its Tracks.

Respectfully,

Gail

Gail Nichols, Vice Chair