Google, Amazon, and Apple are all pushing new tools—and often, encroaching on the turf of competitors—with the hopes of snagging a larger cut of everyday consumer purchases.
Several of the world’s tech giants are squaring off, thanks to new strategies and tools that have one common goal: to bring their respective companies a bigger slice of the enormous consumer spending pie.
Google vs. Amazon
This week the Wall Street Journal reported that Google is working on a “Buy” button that would allow online shoppers to make quick one-click purchases—a feature that’s most often associated with Amazon, the world’s largest e-retailer. Google wouldn’t run factories full of merchandise, nor would it sell and ship goods like Amazon does. Instead, in theory (none of this is settled, or even confirmed by Google), consumers would be able to buy goods in a single click directly from partner retailers that show up in Google Shopping search results. Google is reportedly also considering an expedited shipping subscription service along the lines of Amazon Prime or ShopRunner, which would store the customer’s billing info and shipping address.
Google dominates search in general. Yet when people are searching specifically for things to buy, far more start their online shopping expeditions at Amazon. Naturally, Google would love to have more consumers browsing for goods with its search tools. What’s more, it would love to keep them within the Google sphere when actually making purchases. Right now, consumers who start shopping searches at Google are typically sent to other sites—including Amazon—when the time comes to buy. Google would much rather keep a tight hold of the eyeballs and wallets of shoppers.
Amazon vs. Ebay
Amazon recently announced the introduction of a new “Make an Offer” feature that allows customers to bid and negotiate on the price of certain merchandise—options that are in the wheelhouse of eBay, which was born as an auction site and has evolved into more of a general marketplace for sellers big and small.
For now at least, Amazon is essentially just the host site for sellers who are willing to haggle with customers. Only items falling under a few sales categories, including Fine Art and Sport and Entertainment Collectibles, are available on the “Make an Offer” basis, and it’s always a third-party vendor (not Amazon) that does all the negotiating and selling. After a customer views the suggested price of an item and makes an offer, “The seller will receive the customer’s lower price offer through email, at which point the seller can accept, reject or counter the offer,” an Amazon.com press release explained. “The seller and customer can continue to negotiate through email until the negotiation is complete.”
Consumer Reports noted of Amazon’s new tool, “By adding a haggling element to its traditional fixed-price model, Amazon broadens its appeal to a wider audience of consumers motivated not simply by low prices, but by the thrill of the hunt and scoring a deal.” Note that there are no open auctions, and that all haggling takes place privately between the two parties involved—not unlike the negotiations that take place between buyer and seller in a car dealership, or perhaps via a connection made on Craigslist or Priceline. Customers can “Make an Offer” on roughly 150,000 items right now at Amazon, and the e-retail giant plans on expanding the bidding option to hundreds of thousands more items in 2015.
Apple Pay vs. All Other Forms of Payment
When Apple Pay debuted in October, the mobile payment tool—allowing customers to pay for goods with a tap of an iPhone—could be used at Macy’s, McDonald’s, Whole Foods, and several other major chains, but overall less than 3% of U.S. merchants that take credit cards were ready to accept Apple Pay. As the New York Times reported this week, however, dozens more banks, retailers, and at least one NBA Arena (Amway Center in Orlando) have since started accepting Apple Pay, and experts increasingly are of the mind that Apple has the best chances of making smartphone payments commonplace:
“Retailers and payment companies see Apple Pay as the implementation that has the best chance at mass consumer adoption, which has eluded prior attempts,” said Patrick Moorhead, president of Moor Insights & Strategy, a research firm. “They believe it will solve many of the problems they had before with electronic payments.”
Still, there’s a very long way to go before a critical mass of consumers are paying for purchases regularly with iPhones, or any smartphones. Many big-name retailers, including Best Buy, Walmart, and Gap, aren’t accepting Apple Pay because they’re trying to create their own smartphone payment system—which may or may not be easier and more convenient to use than Apple Pay. More importantly, consumers generally still see old-fashioned debit and credit cards as a more convenient and certainly a more comfortable way to pay for stuff. For smartphone payments to be a true success, Apple Pay or other services will have to convince the masses otherwise.
Microsoft is fighting a U.S. warrant to turn over emails stored in Ireland
It’s not every day you see Microsoft and Apple or Fox News and NPR going to bat for the same team — but that’s exactly what’s happening now, in a case that could have big consequences for American tech and media companies.
Last December, a Federal judge granted U.S. investigators a warrant to access a Microsoft user’s emails, stored in a data center in Dublin, Ireland, in relation to an investigation. Microsoft said no way, arguing the U.S. government has no right to issue a warrant for emails stored abroad.
Microsoft has good reason to reject the government’s demands here: If would-be Microsoft customers outside the U.S. start thinking their emails are subject to U.S. warrants, they might think twice about becoming Microsoft customers. Indeed, top tech firms have already lost big overseas contracts over fears that American services are subject to National Security Agency snooping.
Microsoft has yet to convince any court to overturn the original warrant. A magistrate first ruled against Microsoft’s challenge in April. The company got another defeat in August when U.S. District Judge Loretta Preska found that it wasn’t a matter of where Microsoft stored the emails, but rather where Microsoft and the user in question were themselves based.
However, Microsoft still refused to hand over the user’s emails. The company filed a new appeal last week, arguing that a ruling against Microsoft threatens the privacy of foreign users and Americans alike as more people choose to store their emails and other sensitive documents in off-site cloud servers instead of local hard drives.
“We believe that when one government wants to obtain email that is stored in another country, it needs to do so in a manner that respects existing domestic and international laws,” Microsoft General Counsel Brad Smith wrote Monday. “In contrast, the U.S. Government’s unilateral use of a search warrant to reach email in another country puts both fundamental privacy rights and cordial international relations at risk.”
And that’s where Microsoft’s strange bedfellows come into play. Rival tech companies like Apple, Amazon and HP, as well as news organizations from across the political spectrum like CNN, Fox News, NPR and The Guardian, have all signed amicus briefs supporting Microsoft’s fight to keep its users’ emails away from the U.S. government. It may seem weird for these companies to work together on just about anything else, but it makes sense here: technology companies have a business interest in keeping users’ communications private, while media outlets don’t want their reporters’ messages to fall into the government’s hands.
“The government’s position . . . will significantly deter the use of remote data management technologies by businesses and individuals, particularly their use of U.S. cloud services providers, and thereby undermine a significant contributor to U.S. economic growth,” reads an amicus brief filed in the case by the Business Software Alliance, a trade group that counts Microsoft, Apple, Intel and other top tech companies as members. “There is no basis in law for the extraordinary result sought by the United States.”
Whatever happens in the Microsoft case, then, could have big privacy implications for businesses and users alike. There probably won’t be a resolution until late 2015 at the earliest, but some observers expect this one to wind up all the way at the Supreme Court.
Hey, holiday shopping procrastinators, now's the time to get your act together and take advantage of offers guaranteeing free and speedy delivery of online purchases.
Here’s everything you need to know about last-minute online holiday shopping, including how to ensure your orders will arrive in time to tuck under the Christmas tree—and how to not pay top dollar (or any money whatsoever!) for it.
The sooner you order, the better. While many retailers are guaranteeing that orders placed very late in the game—perhaps even by December 23—will arrive by Christmas Eve, it’s unwise to bank on these guarantees holding up. After last year’s debacle, in which orders from Kohl’s, Amazon, and others failed to arrive in time for Christmas, retailers have tried to push shoppers to place orders earlier to help avoid the mad rush in the few days before December 25. It shouldn’t surprise anyone, however, that many consumers are procrastinating, and that retailers are yet again guaranteeing last-minute delivery to entice desperate shoppers into placing late orders.
But there are two simple reasons why you should make online holiday purchases asap: 1) Doing so will save money, because (with the exception of Free Shipping Day—see below) the likelihood of free shipping disappears the longer you wait, and you’ll pay through the nose for expedited delivery at the very last minute; and 2) even though retailers and shipping services have taken steps to avoid a repeat of last year’s troubles, Mother Nature or sales overload could still cause shipping delays. After shoppers were burned last year, why take the risk?
More retailers are offering delivery guarantees. Heading into the 2014 holiday season, retailers seemed a little hesitant to make the sort of last-minute shipping guarantees that were commonplace in 2013. According to a survey conducted in the fall, 21% of retailers said they would set their deadlines for guaranteed December 24 delivery at December 19 or later, compared with 26% a year ago. Yet more recently, there’s been an increase in such guarantees. The consulting firm Kurt Salmon told USA Today that 25% of retailers are guaranteeing free delivery by Christmas on orders placed one to three days beforehand.
Retailers typically have a series of deadlines and varying costs for shoppers who want delivery by December 24. Target says that customers who order by December 20 are guaranteed delivery by Christmas, but only “on select items.” Target is also offering free standard shipping on all orders placed by December 20, but the policy stipulates that standard shipping is “3-5 business days.” There are only four business days between December 20 and December 24 (including both of those days), so it wouldn’t be surprising if some December 20 orders aren’t delivered by December 24.
Many news outlets have reported Amazon’s first deadline as Tuesday, December 16—that’s the last day shoppers can get free delivery via Super Saver Shipping for non-Prime members who meet the minimum purchase threshold ($35). Yet Amazon itself is now listing Friday, December 19, as the final day for free (non-Prime) shipping. Prime members, meanwhile, get two-day shipping on all orders fulfilled by Amazon, so they can order as late as December 22 for delivery by Christmas Eve.
Free Shipping Day is Thursday, December 18. As of Monday, roughly 1,000 retailers said they’d be participating in Free Shipping Day, an annual event held about a week before Christmas, in which stores offer free shipping on all orders, with no minimum purchase. While that sounds terrific, it must be noted that the many retailers offer essentially this same exact deal before and sometimes after Free Shipping Day. Target has given customers free shipping on all orders for weeks, while retailers like REI are offering free shipping guaranteed to arrive by December 24, with no minimum purchase, for orders placed as late as 10 a.m. on December 23. In select areas, Banana Republic is even offering free same-day shipping thanks to a partnership with a speedy delivery specialist, Deliv.
There are other ways to get fast—and free!—shipping. As mentioned above, Amazon Prime members get free two-day shipping on their Amazon purchases, and if you’ve never had a subscription before ($99 annually), it especially makes sense to get a free trial membership during the holiday period. Students get six months free, while everyone else can enjoy Prime benefits for 30 days. Also, the December 2014 issue of MONEY offers all sorts of tricks for saving money on online purchases, including the tip that ShopRunner, another two-day shipping service, is free for American Express customers who register a card with the site. By subscribing to either of these services, every day is Free Shipping Day.
And it's coming to the Fire TV Stick soon
Amazon’s Fire TV is finally getting HBO Go.
The retailer’s set-top box will begin offering HBO’s streaming service Monday, the two companies announced. For now, this version of HBO Go still requires customers to authenticate their cable or satellite subscription in order to use it. HBO is planning to launch a standalone version of its streaming service that won’t require cable sometime in 2015, but the network hasn’t yet announced which platforms will offer the service.
To celebrate the arrival of HBO Go on Fire TV, Amazon’s offering the streaming box for just $79 until Dec. 28, whereas it’s normally $99. HBO Go will also be available on the Fire TV Stick, Amazon’s Chromecast-like streaming dongle, this spring.
One catch here: HBO Go won’t work on Amazon Fire TV if you’re a Comcast subscriber, the Wall Street Journal reports.
Smartphones, TVs, mattresses all got snapped up for pennies (pence, to be precise), thanks to an automated service gone haywire.+ READ ARTICLE
Don't miss these deadlines
The perils of shopping for holiday gifts online or sending packages too close to an impending birthday or holiday are well known. It’s all too easy to click ‘place order’ a day late and leave your Christmas stockings un-stocked because your order didn’t arrive on time.
Amazon, the world’s biggest online retailer, has a huge budget devoted to processing its holiday orders quickly this year. The company recently installed some 15,000 high-tech Kiva robots in its fulfillment centers to whisk items quickly into delivery, and last year, Amazon inked a deal with the U.S. Postal Service to offer Sunday shipping through the season.
There’s no question shipping is squeezing the company’s finances: Amazon spent about $6.64 billion on shipping last year, but only took in about $3.1 billion in shipping payments.
Helpfully, Amazon has a way to make sure you get your online shopping done on time: a simple chart that tells customers when to buy Christmas gifts before it’s too late.
If you live in one of the contiguous 48 states, here are all the last days you can order a present from Amazon if you want to make sure it arrives before wrapping day (December 24).
Free Shipping (Non-Prime) — December 19
Standard Shipping — December 19
Two-Day Shipping — December 22
One-Day Shipping — December 23
Local Express Delivery — December 24
For Alaska, Hawaii and Puerto Rico, check out Amazon’s website.
As far as shipping other gifts to your relatives, the rules are a little more complicated because of all the parcel delivery services in the U.S. But no fear—TIME has compiled a list of handy deadlines for shipping gift packages via UPS, USPS and FedEx to friends and family in time for Christmas Eve arrival. A quick caveat: Unexpected weather and human error can always cause unexpected delays with any shipping service, so the earlier your order your gifts, the safer you’ll be.
The last day to ship with FedEx via the standard ground shipping for pre-Christmas delivery is Wednesday, December 17.
For FedEx Express, the last day is Tuesday, December 23.
Do all your standard package shipping with the government-run postal service by Monday, December 15.
For sending greeting cards and priority mail, the last day is Saturday, December 20.
And for procrastinators out there, Priority Mail Express can be used until December 23.
For standard ground shipping with UPS, send all your packages out by Thursday, December 18.
For UPS 3 Day Select, it’s Friday, December 19.
For UPS 2nd Day Air, you have until Monday, December 22.
For UPS Next Day Air, rely on Tuesday, December 23.
And if things get really urgent and you’re welling to shell out the bucks, UPS Express Critical by December 24 will get the job done.
Amazon is losing its edge as the lowest-cost retailer.
This is shaping up to be the year all the rules of shopping were broken. First came the bombshell revelation from NerdWallet showing that Black Friday goods may not be quite the deals retailers claim, as many were selling year-old items at the same prices as last year’s Black Friday. And if the newest report from ShopSavvy is correct, the decade-long maxim that Amazon.com AMAZON.COM INC. AMZN 1.2947% has the lowest prices could be wrong as well.
For those unaware of the company, ShopSavvy’s purpose is to help would-be shoppers find the best deal on products by providing retailer information through its website and its barcode-scanning mobile app on Android and iOS. And if its recent ShopSavvy Showdown (say that three times fast) is correct, both Amazon and Best Buy BEST BUY BBY 4.7526% offer higher prices on overlapping items than the undisputed King of Retail: Wal-Mart WAL-MART STORES INC. WMT 1.5309% .
The survey says …
This survey is not the first showing that Amazon is losing its edge as the lowest-cost retailer. Earlier this year, a report from Wells Fargo and online price-tracking company 360pi found Amazon had higher prices overall when compared to Wal-Mart and Target in four critical areas: shoes, electronics, housewares, and health products. However, the report found that Amazon typically offered the lowest prices when it came to “like-to-like” items. Essentially, when a specific item was on both sites Amazon still had the lowest price.
However, this newest data finds the exact opposite. The survey, based only on the same products for sale at Walmart, Amazon, and Best Buy, finds that “Wal-Mart has the cheaper option on over 50% more products than Amazon and Best Buy across the categories analyzed.” In addition, the survey notes Wal-Mart’s online price match policy, in which the company specifically agrees to match prices from Amazon and Best Buy.
So I should go to Wal-Mart right now, right?
If these results are correct, you should go directly to Wal-Mart and not worry about shopping around online, right? Well, not so fast. As the survey clearly shows, Wal-Mart didn’t always have the lowest price, although it was a good bet they did. In addition, the survey didn’t go into a lot of detail about the product selection. Without that critical piece of information, it’s hard to know whether these goods are representative of a true head-to-head comparison or whether these items are merely a good selection for Wal-Mart.
In addition, the data presentation concerns me. Although there were three retailers chosen for the survey, the data was only presented as Wal-Mart versus Amazon and Wal-Mart versus Best Buy. Without the third head-to-head comparison, Amazon versus Best Buy, the survey can come across as less of an unbiased comparison and more of a pro-Wal-Mart piece.
Finally, competition between megaretailers is rather intense. In many cases, retailers consider prices of 3%-5% lower as being worthy of running commercials specifically outlining these differences. The closest ShopSavvy comparison between Wal-Mart and the other retailers was in the TV category, with Wal-Mart being “only” 15% cheaper than Best Buy on average. When matched up against Amazon in the Kids category, ShopSavvy reports that Wal-Mart is a massive 45% cheaper on average.
Overall, this doesn’t mean that ShopSavvy’s data is wrong, but this should be considered only one data point in your holiday deal-hunting comparison. One shopping rule that will never be broken is to continue to shop around for the best deal; you’ll be thankful you do.
Some items were sold for as little as a penny+ READ ARTICLE
There’s more to being a successful retailer than keeping your buyers happy.
U.K. businesses that sell via Amazon.com’s local site are up in arms over a software glitch late Friday that led to their items being sold for as little as a penny. Some ended up out of pocket to the tune of up to $30,000.
The incident was down to a problem with a software tool developed by Derry-based RepricerExpress, which allows businesses to offer their goods on Amazon.co.uk.
The software automatically changes prices for the items on sale to guarantee that they stay competitive, but in this instance, it generated a self-reinforcing loop in which goods were automatically re-priced down to a penny.
One user complained on an Amazon bulletin board that stock worth $15,000 had been sold in this fashion within 40 minutes.
“Being they are not based in the US (sic) It takes away lots of options for us to recoup our loses,” the user wrote. “Last night I had to explain to my wife and 3, 4 and 5 year old that we could not take our trip to Disney in February.”
City AM cited one fancy dress company owner as saying her company had lost over $30,000 overnight.
Amazon said it was unable to cancel orders that had been dispatched and charged to customers, but another user on the bulletin board noted that it had been able to cancel those that weren’t slated for urgent shipping.
RepricerExpress chief executive Brendan Doherty said on the company’s website he was “truly sorry for the distress this has caused our customers,” and said Amazon had reassured him that sellers’ accounts wouldn’t be penalized as a result.
It wasn’t clear what degree of compensation would be available to the businesses that had suffered. RepricerExpress didn’t respond immediately to a request for comment from Fortune.
Experimenting is essential as long as you don’t bet the company.
For many companies, suffering a nine-figure inventory charge related to a failed product would be a catastrophic event. But for Amazon.com AMAZON.COM INC. AMZN 1.2947% CEO Jeff Bezos, it’s just another day at office.
The folks at Amazon barely blinked last quarter when the company took a $170 million writedown related to its much-maligned Fire Phone. In fact, that charge wasn’t even mentioned in Amazon’s earnings press release, but rather contained in its subsequent Form 10-Q filing with the SEC. And, no, it’s not as though Amazon was simply hoping investors wouldn’t notice. It’s that in the broad scheme of things, Bezos thinks it’s relatively insignificant.
In a recent interview with Business Insider, Amazon CEO Jeff Bezos practically guaranteed that more Fire Phones are on the way, insisting that it’s “going to take many iterations” to determine whether the project is truly a failure.
Failure is always an option
To better understand Bezos’ perspective, consider his comments surrounding that claim.
Immediately beforehand, Bezos offered several examples to shed light on how Amazon has always done business. That notably includes Amazon Auctions, which he laments “didn’t work out very well.” But out of Auctions morphed zShops, which also failed. Then finally, out of zShops came Amazon Marketplace, which became its third-party seller business and now accounts for over 40% of the total units sold on Amazon.com. What at first looked like a massive failure is now an enormous success.
More comparable along the hardware lines, Bezos went on to note that the Kindle is now on its seventh generation and reminded investors that the company has had trouble keeping up with early demand for products such as Fire TV, the Fire TV stick, and Amazon Echo. To be fair, unlike the crowded smartphone industry, those are all innovative creations operating in relatively young markets, so it may not be entirely appropriate to place the Fire Phone in the same bucket.
But does that mean investors can look forward to more big writedowns? Probably not. As Bezos stated, Amazon has generally erred on the side of caution by not producing enough of its hit hardware products. So the next time(s) around, you can be sure Amazon will be much more careful about managing Fire Phone inventories and learning from its previous failure.
One thing Bezos will never do
That also doesn’t mean Amazon is done making — and potentially failing at — other big bets. Bezos elaborated on the relative insignificance of last quarter’s $170 million charge with one caveat:
I’ve made billions of dollars of failures at Amazon.com. […] None of those things are fun, but they also don’t matter. Companies that don’t continue to experiment and don’t embrace failure, they eventually get in the desperate position where the only thing they can do is make a Hail Mary bet at the end of their corporate existence. Whereas companies that are making bets all along, even big bets — but not “bet the company” bets, I don’t believe in “bet the company” bets. That’s when you’re desperate. That’s the last thing you can do. [emphasis mine]
That last point is arguably the most significant: However bold or costly Amazon’s investment decisions might seem, Bezos will never allow them to occur should they threaten the company as a whole. So keeping in mind that Amazon is likely to be much more careful with the Fire Phone going forward, you can be sure it won’t be allowed to run Amazon into the ground.
The funny thing is, this thought process isn’t even remotely new for Amazon. Back in his first letter to shareholders in 1997, Bezos wrote: “We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.”
In the end, the first-gen Fire Phone’s failure is a horrifying example of the “others will not” category. But astute long-term investors know all too well that the propensity to both embrace and learn from that failure is exactly what made Amazon the thriving business we know today.