Tagged: Amazon

Lumia 900: “launched” by AT&T, it shines on Amazon

AT&T hyped the launched of Lumia 900 so much that almost everyone expected to see fireworks in each capital city dedicated to the new Windows phone. Instead stories of sedated customer representatives who would happily talk about iPhone and its apps rather than Lumia keep coming up in many reports that came out today. So why all those noisy promises of a mammoth campaign, bigger than ever, promoting Lumia? It’s a mystery that left anyone scratching their heads. AT&T should care about this if they spend $150m on this campaign.

But the Amazon’s online business never sleeps and it did a much better sales job than the bricks-and-mortar AT&T shops. This is another example why Amazon is eating the lunch of traditional business. It all started on Easter Sunday. The sales started to push Nokia up the sales charts reaching the number five spot. I am not sure how the tally is determined, but there is one detail that tells me how the product fares: the customer reviews. If the number is high is usually a good sign that the product is hot. On Sunday, the number was about ten for the black Lumia 900. That is not impressive at all.

However, in the next day, Lumia 900 reached the top. The black model was top and the cyan was third initially, but then it reached the number two spot. So Nokia got the 1-2 pole position. But to me the most remarkable thing was the number of customer reviews. In one day it climbed up to go past 60 reviews for the black model and 20 reviews for the cyan model. What is going on?

It is impossible to figure out if Nokia will be successful in its attempt to revive its fortunes, but there are a couple of interesting things here that could predict a positive start for the Finish phone maker and for Microsoft through extension. The first one is the rapid increase of the number of the customer review. By comparison, the Droid which used to be on the top of bestseller list and Samsung Galaxy, the second on the list had 54 and 16 reviews, respectively. Nokia did reach those numbers in one day, while the other two phones had at least three months to get those reviews. Secondly, the reviews have almost perfect five stars. This is quite something.

There is something else. Reading randomly those reviews, one could notice some reviewers are encouraging of Nokia and Microsoft. This is interesting, because it shows emotional attachment to the new device and its user interface. Windows Phone is new; it has an unusual design, certainly distinct from the other two operating systems and in combination with an exceptional hardware design, it offers something to the new owners making them proud of their acquisition.

Nokia is currently running a cute ad showing how a guy with a new cyan Lumia 900 gets the attention of a girl to the dismay of his other mates who obviously own iPhones or Androids. I have a sense that the ad cleverly taps into that emotion that comes with ownership of something new and beautiful. It is the only way Nokia can fight the negative of having fewer applications. It is a smart approach, because otherwise, by just comparing technical specs and numbers people will not feel motivated to go for a change.

And by the way, how good is Amazon? Who needs to go through the experience of dealing with sales people that are unprepared to help, when you have great information and all you need to do is to just press a button to get what you want?

The Difference between Amazon and Sears Is Cognitive

In a recent article (How Amazon Ate Sears’ Lunch) Elizabeth Olson writes an obituary for a company that has been an icon of retail for almost a century. In the past decade or so, Amazon has gradually eroded Sears’ market share to the point where the old superstore had to take the drastic measure of closing over 100 of its outlets.

How is it possible? Sears launched a web site to the public trying to replicate Amazon’s success, but to no avail. Unfortunately, the article I mentioned earlier doesn’t really explain why Sears has lost so much business. I venture to point out one factor that contributed substantially to the failure of the online enterprise, and in fact of the many other retailers who find themselves in a similar position.

The biggest visible difference between the two is in the quality of the cognitive structures presented to their visiting customers. These structures have a tremendous role in helping the customers find information, learn about new products and visualise a purchasing experience before they actually execute it. It is what makes a web site “sticky”.

If you go to Sears’ website you will find a simple interface – that is good – and a sense that not much is happening there – that is bad. The navigation is linear, you have to click through a tree-like structure to get your item or use the search function. The problem with this web site is not only that is not very helpful, but is not working well either which points to a serious problem of the overall design of the information architecture. I searched for TV and it took me to SanDisk SD card, which is shown under the heading Appliances->Sewing & Garmet Care -> Memory Card & Sticks. At the bottom of the screen under “People Who Viewed This Item Also Viewed” there is a list of refrigerators, air conditioning units and washing machines. Yeah, right! It just shows that Sears doesn’t take the importance of the information architecture seriously, and they are paying for that.

But this is not the main problem. The killer here is the lack of evolved cognitive structures that are needed to help customers make sense of the web site. Sears has a design form that is typical to the first generation of ecommerce solutions: use the tree-like structures. In a time when people don’t have time to “learn” the web site, the host must invest in developing sophisticated cognitive structures.

Amazon has a plethora of cognitive helping tools to assist the shoppers: on the left you have a permanent toolbar that shows you exactly where you are at any point in time, with up-to-date number of categories available. Then there is the real-time inventory, shipping information, a long list of filtering criteria, Today’s Deals, Gifts, Listmania, your recently viewed items, browsing history, shipping options, customer reviews, certifications, conditions and the list goes on. When you look at the item individually, the page is filled with helpful and practical information including Frequently Bought Together, What Other Items Do Customers Buy after Viewing This Item, Add to Wish List, More Buying Choices, Technical Details, Product Description, External Web Sites, Customer Reviews, etc.

Amazon is a living beast with a very well organised mind. One of the best executed strategies of Amazon was to get its customers to contribute with content which transformed Amazon into one of the best product information websites. Statistically the reviews are accurate because they are so many and because of the self-regulating system Jeff Bezos put in place from the beginning.

Meanwhile, Sears and others implemented the web site as an afterthought, ignoring the value of the information architecture. The irony is that in essence this is not something new in terms of a selling system. Cognitive structures were used successfully in the past to improve shopping experience, but in a different form. A hundred years ago the successful retailers were those who understood how to assist the customer once they stepped inside their shop: placing carefully useful items visibly near the door, other items near the counter, organising the aisles, hiring helpful shop assistance who would answer any question the visiting shoppers might have, use shelves in an innovative arrangements, place extra helping information for new products, arrange for special stands, etc.

This is exactly what Amazon does in the virtual space. Somehow, the traditional retailers have lost their way and they could not get themselves to apply their experience online. This may be due to the fact that IT departments don’t work well with the sales and marketing. Or maybe there is no one to translate the message from one to another.

In Australia, Harvey Norman struggles to come to term with the new world. Gerry Harvey, the retail chain’s CEO, is trying desperately to setup web sites overseas to win back its customers who are deserting him in droves. But he does not get it. He thinks you just need a web site with buttons to click, the equivalent of a robot made out of pots and springs, wheels and cogs. It is mystifying how he has forgotten how hard he worked to make his business work from its humble beginning.

Information is king and the use of cognitive structures is essential in getting into the mind and soul of the customer. In this sense, the IT is critical to the success of the business, but I should point out that it is the application in a human context that makes it work in the end.