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.
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.
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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 0.7288% 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 1.3773% offer higher prices on overlapping items than the undisputed King of Retail: Wal-Mart WAL-MART STORES INC. WMT -0.9076% .
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.
Sale prices are faker than ever this holiday season, as retailers openly admit that no one buys items at the ridiculously inflated "regular" or "suggested" amounts listed on price tags.
When seemingly everything is always on sale, is anything really on sale?
That’s a question that any savvy, value-oriented shopper must ask from time to time—and especially during the annual holiday shopping season frenzy, when it’s routine to see entire stores discounted by 40% or 50%. When such markdowns are a dime a dozen, who is foolish enough to actually buy anything at full price?
The answer could very well be no one. Something called “price anchoring” is a widely employed tactic in the retail world. Basically, the concept involves the establishment of a high price anchor, which locks into place a perception of value. You’ve probably seen tens of thousands of these anchors, in the form of “list,” “regular,” “original,” “suggested,” or “compare to” amounts shown on retailer websites or price tags. Anchor prices are set intentionally high, not with the idea that consumers will actually pay the inflated prices, but so that the retailer can create the perception of a tremendous deal when the item is inevitably placed “on sale.”
For example, picture a sweater listed with an original price of $100. When it’s placed “on sale” for $50, that seems like quite a deal—a far, far better deal than if the original price were listed at $55 or $60. All along, however, the store selling these sweaters has been planning on getting around $50 apiece for them, and it would probably make a profit even if it sold them for $25 each—which the store surely will during after-Christmas sales.
There’s nothing new about price anchoring. What is new—and pretty darn galling among consumers who expect more pricing transparency—is that in today’s promotion-heavy retail world, “original” prices appear to be getting exponentially more inflated. What’s more, retailers aren’t even pretending that a single customer ever paid its “regular” or “original” prices for anything.
In a new New York Times column, Farhad Manjoo wades into this murky world, trying to figure out how shoppers can evaluate whether or not a deal is a deal when seemingly everything is presented as one. What he reports, among other things, is that this season in particular has seen an “explosion of less-than-stellar deals advertised on the web,” in which there’s really nothing special about all but a very few of the sale prices available on Black Friday and other supposedly amazing days for bargains.
While nearly all retailers engage in the practice of inflating list prices more or less with the sole purpose of making discounts seem more impressive, a Macy’s spokesperson openly admitted that it came up with its original prices “based on many different factors, including the cost of the item, overhead, benefits we offer … as well as our ability to offer the item at a lower price during sale events.” Macy’s also pointed out some fine print on its website alerting shoppers of the following:
“Regular” and “Original” prices are offering prices that may not have resulted in actual sales, and some “Original” prices may not have been in effect during the past 90 days.
Holiday season sales and discounts are presented as being very special, but in fact there’s often nothing special about them—because in all likelihood, the only purchases occur when these items are “on sale.” If a price exists that no one ever pays, it shouldn’t be referred to as a “regular” or “original” price. It could be described by another term: a fake price.
There was a lot of discussion about the topic of fake pricing back in early 2012, when J.C. Penney tried to shake up its business model, in which more than 99% of its sales were below list price, and items were routinely marked down by 50% or 60%. J.C. Penney’s attempt to get rid of such extreme discounting and offer fair prices from the get-go failed miserably, at least partly because shoppers are compelled to buy more when retailers use the ruse of inflated price anchoring. And now we’re left in a situation in which sales are ubiquitous, both sale and original prices are arguably more meaningless than ever, and it’s never been more difficult to tell when a deal is actually a deal.
To some extent, shoppers seem to be aware of all of this. Some of the reason that Black Friday purchases were down this year is that the majority of consumers felt that Black Friday sales are meaningless because they assumed—rightly so—that there would be “more sales throughout the holidays.”
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Right now, arguably the best holiday shopping deals are for household staples: printer paper, tissues, disinfectant wipes, and toilet paper.
Retailers engage in all sorts of crafty tactics to manipulate customers into buying things they otherwise wouldn’t, but there would have to be one seriously masterful sales job to make consumers think that toilet paper is the perfect item to wrap and place under the Christmas tree.
Instead, retailers are offering dramatic discounts right now on items that shoppers need for their own households. Think: printer paper for 1¢ and disinfectant wipes for 75% off.
While it might seem to make more sense during the holiday season to have great deals on things that people would actually give as holiday gifts, the strategy is perfectly logical in one fairly obvious way: It draws loads of shoppers out to stores (or pushes them into making purchases online), with the idea that once these customers are in the buying mood, they’re likely to be tempted into buying gifts and other items that aren’t discounted quite as dramatically.
What’s more, this strategy seems timed well for the period right after Black Friday and Cyber Monday. It’s normally somewhat of a lull for consumers, who are likely exhausted after browsing the barrage of deals during the big shopping weekend, and who don’t yet feel the pressure to make last-minute holiday gift purchases. In this way, can’t-pass-up-deals on things that everyone needs serve as a sensible prod to woo shoppers into buying more stuff.
Hence this week’s roster of coupons from Staples, which can be printed out and presented in-store only for some amazing deals through Friday, including:
1¢ for a ream of multipurpose paper (normally $7.99)
$2.99 for three-pack of Kleenex facial tissues (compare to $7.99)
$8.99 for 12 rolls of Bounty Basic paper towels (normally $16.19)
$8.99 for 24 rolls of Charmin Basic bath tissue (normally $11.49)
20% off cups, plates, and cutlery
50% off select Philips lightbulbs
Staples’ big competitor in the office-supply space, Office Depot (and its sibling Office Max), is also discounting some necessities, including deals for buy one, get one 50% off its store brand paper and 75% off Lysol and Clorox disinfectant wipes.
Meanwhile, Walmart and Amazon appear to be engaged in a price war for a necessity that isn’t really much of a gift on its own, but that’s necessary for many gifts: batteries. The former has an online special right now for a 40-pack of Duracell batteries (30 AA and 10 AAA) for $16.99 (list price: $40), while the latter is listing a 40-pack of Duracell AAs for around $20 (list price: $60).
Parents who shop online—so all parents, basically—need to know how easy it is for kids to find out what they're getting for the holidays.
Every week, it seems, there’s a new scandal about email passwords being stolen or retail customers’ data being hacked by stealthy cyber criminals. Yet such incidents represent only a teeny-tiny slice of how our online behavior is spied upon and used. In the vast majority of cases, our data is tracked and used in entirely legal ways by search engines, social media, retailers, and advertisers. Legal or not, the repercussions of such tracking—and the ads that inevitably follow—can feel like an ongoing privacy violation.
What’s more, targeted ads come with the potential of revealing secrets about what people have been searching, browsing, and buying online. While the results are generally not nearly as devastating as identity theft, they can create tense situations. In probably the most notorious example, a father found out his high school daughter was pregnant only after Target had sent her coupons for cribs and other baby products—offers that were based on her shopping history.
This time of year, the relentless stream of targeted (also known as “interest-based” or “retargeted”) ads that pop up in banners or on the side of web pages also come with the potential of ruining a holiday gift surprise. Say a mom does some browsing online for presents for her son. Soon thereafter, the items she viewed start showing up in ads on the device that was used, along with ads “inspired” by her browsing history.” If and when the would-be recipient hops on the same device, he’ll see all of those ads. Without much sleuthing, he’ll be clued in about what mom was shopping for, and he’ll have a good idea to expect the new Nike high-tops, game console, or whatever come December 25. So much for the big reveal.
It’s unclear how often this scenario plays out, but it’s a possibility some parents worry about. “I guess you have to pick btw letting your kids use the computer and shopping online, since custom ads follow you and spoil gift surprises,” one mom tweeted recently. Last year the founder of Marketing Land wrote at length about his wife’s frustrated attempts to stop banner ads from Macy’s, ThinkGeek, and other retailers she shopped from popping up on the computer she often shared with her kids.
It’s not just parents who worry about blown surprises. One Reddit user recently posted, coyly and excitedly, that her longtime boyfriend had been getting engagement ring ads in his Facebook feed. Surely, she felt, this was an indication that he was getting ready to pop the question. One commenter followed up with a story about a friend whose boyfriend also was flooded with engagement ring ads before he proposed. Then, as soon as she changed her status to “engaged,” she was slammed with weight loss ads offering to provide assistance “fitting into your dress.” Naturally, the baby-related ads followed after the wedding took place.
“You’re stalked with ads related to what you’ve been shopping for all the time,” says Bruce Schneier, an internationally renowned computer security expert and a fellow at Harvard’s Berkman Center for Internet and Security. Nonetheless, Schneier thinks it’s probably “a rare occurrence” for people to correctly deduce what they’ll be getting as holiday gifts based on the ads they see on a shared computer. “When a kid sees an ad for an Xbox, he’s probably just going to think I want an Xbox, not Mom got me an Xbox.”
For that matter, the presence of these ads is no indication of whether anything was actually purchased. As an Al Jazeera column about “curated” and “retargeted” ads noted, consumers can be “stalked by socks” and other items they browsed while shopping online regardless of whether or not they purchased the goods, or whether they searched for such goods randomly, as a goof, or out of genuine interest. “Personalized ads can be right, but they’re often wrong” in terms of being truly appealing to the right set of eyes, Schneier says.
Most e-retailers offer consumers the right to opt out of being subjected to tracking and retargeted ads, but Schneier thinks doing so is a waste of time. Not only are the processes for opting out convoluted and filled with loopholes, there are so many digitized eyeballs monitoring your online activity that successfully negating them one at a time is virtually impossible.
It’s much better and more effective, he says, to install a tool such as Adblock Plus (which blocks some or all ads according to filters checked by the user), Privacy Badger (which automatically blocks trackers or ads that it deems to violate “the principle of user consent”), or some combination of several blockers. Others recommend shopping online in private browsing mode; when using Google Chrome Incognito, for instance, the browser doesn’t save a record of what sites have been visited, and therefore (theoretically) there should later be no retargeted ads that surface as a result.
If you’re dealing with an especially stubborn child or spouse who has a history of noticing what online ads foretell in terms of holiday gifts, you might want to try a different strategy: Spend some time here and there clicking on all sorts of items haphazardly, or purposely browse for things you know he’d absolutely hate to receive on Christmas. The resulting collection of retargeted ads is likely to be so random, nonsensical, and disappointing that it’ll throw him off the trail and he’ll have no clue what you actually bought.
As a bonus, you’ll simultaneously be messing with the retailers, browsers, and other bots that generate these annoying ads in the first place.