Does Your Location Determine How Much You Pay for Online Shopping?

A Wall Street Journal investigation has uncovered a troubling trend for online shopping – price alterations based on your location.

The newspaper specifically looked into Staples’s online store and a handful of others, but what it discovered is part of an overall trend. While many consumers expect online comparison shopping and online deals to be pretty standard across the board, unbiased Internet shopping is giving way to a tailored deals delivered to target demographic groups.

Is online shopping really the best deal? For years, shopping online has been equated with finding the best deals – and a person’s ability to quickly compare prices across several different websites put consumers in control. Web retailers, however, have been eager to find a way to gather information about consumers and use it to adjust prices or even offer special deals to repeat visitors. This same collection of data is often used for online media buying and targeted advertising, but the Journal’s study shows that the information is being used slightly differently by online retailers.

For example, one shopper logs into the Staples site and sees a stapler offered at $15.79, but another consumer in the test group who lives just a few miles away was offered a price of $14.29 for the same item. The latter participant’s physical proximity to a brick and mortar competitor triggered a secret discount that was only offered to her.

Not just Staples. In addition to the Staples study, the Journal also found several companies like Rosetta Stone and Home Depot that were adjusting prices or displaying different products based on consumer data. There are several formulas that retailers use to determine price breaks for certain consumers – from their browsing history to physical location to demographic based information (like the zip code of their IP address).

Although it’s a very common practice for offline retailers to adjust their price based on local demand, many consumers have been surprised to see customized product suggestions or even price breaks when shopping online. Some consumer groups worry that the practice is diminishing the Internet’s role as an equalizer and keeping prices higher in areas with less competition – which are typically poorer or in rural areas.

Is It Time to Expand Your DRTV Brand?

The most successful companies in DRTV don’t rely on just one product – they build a long-term brand to move more units, expand their market share and increase their profits. However, jumping into expansion before you’re ready can be disastrous.

Here are four tips to help you expand your DRTV brand beyond your initial success and get the process just right.

1. Understand the holes in your market and look to fill them.

Expanding on your initial product will be easier if you create something that both relates to your first product and is in demand. You can evaluate the current market and look for opportunities to expand your brand in new ways and solve problems that others aren’t solving at all or aren’t solving well.

2. Do due diligence before you expand your offerings.

Although you’ve had some success with your first product, it’s no guarantee of success with your second. Launching your next product shouldn’t be a guessing game. Once you find a fresh product idea, do deep analysis on a product’s viability and the current market landscape before you launch it. Crunch the numbers just as you did with your first product.

3. Maximize your brand with smart DRTV buys.

One of the biggest benefits of DRTV is that it’s a very cost effective way to get customers to visit your store, your website or other places that are selling your products. Although shooting for primetime spots may seem tempting, you can purchase dozens of lower cost advertising spots across multiple channels. This means your new product will get maximum exposure and keep your costs low.

4. Get the most from DRTV by tracking your results and making adjustments.

One of the best reasons for using DRTV for your second product – or your sixth – is because it’s simple to make changes based on consumer response. If you’re managing your campaigns effectively, you can watch customer response and make changes to the timing of your advertising to improve results. Unlike other forms of advertising, these changes can be made in days – and sometimes even hours.

Expanding your DRTV brand can be very profitable if you’re ready to do the research, look for good opportunities and monitor your DRTV sales. With the right strategy, you can successfully expand your brand.

Twitter Makes “Social TV” a New Priority

Although Twitter’s profitability, or lack thereof, is not known, one thing is for sure – Twitter is courting television producers and audiences. Chief Executive Officer Dick Costolo announced in a press conference that partnering with shows like “The X Factor” may have financial benefits down the road.

Twitter’s biggest television claim to fame yet is its involvement with “The X Factor.” Although Twitter does not pay to be mentioned or featured on television shows, it has invested an undisclosed amount to create an online voting system for Fox’s new talent show. For the first time, “The X Factor’s” viewers will be able to send votes via direct messages (known as “DMs” on twitter). In addition, producer and judge Simon Cowell reportedly reads tweets about the show and makes changes based on the feedback. Although he once dismissed Twitter as a passing fad, he sees the value of having feedback from the social web.

As “The X Factor” embraces Twitter, other television shows and producers are likely to follow suit. Television shows are looking for ways to get users more involved in live viewings and Twitter is giving them a way to do just that.

Twitter’s internal entertainment team. Chloe Sladden is key in their strategy of creating social media experiences for television shows. The former VP at CurrentTV was hired by Twitter to be a bridge between television and the social network. She oversees a team of seven in Twitter’s content and programming unit, and plans to hire four more soon. One team member is dedicated to working with music labels and one works specifically with news organizations. As a team, they work to inform producers, politicians and celebrities on the best practices for creating content for Twitter.

While TV shows and celebrities use Twitter in order to gain free publicity, Twitter executives hope that even more users will flock to Twitter to take part in the conversation. This will lead to more opportunities for advertisers to be seen through sponsored ads and more potential income for Twitter.

Television Ownership Drops for the First Time in Two Decades

For many American families, owning a television is a no-brainer.

However, for the first time in 20 years, television ownership has dropped slightly. Nielsen, which uses television ownership as a way to gauge viewer numbers, reported that 96.7% of U.S. families own a television – down from 98.9% in the previous year.

Experts point to two very specific reasons for the decline in television usage: The first is cost. New digital television sets and antennas have higher prices than their analog counterparts. This puts them outside of reach of many low-income families and when television switched to digital broadcast in 2009 they had no choice but to go without. The rocky economy has put more and more families in the low-income range – producing lower television owner numbers.  There was a similar dip in television ownership in 1992 following a similar period of recession. The dip was corrected in the mid-90s when the economy bounced back.

The second reason is also due to new technology – namely the Internet. Tech-savvy young viewers are opting out of buying a television and relying on their computers and streaming television shows instead. They can access nearly all of the shows they want to instantly through Netflix, Hulu, Amazon’s Video on Demand and other sources.

As a result of the second reason, Nielsen may redefine the term “television household” to include those who watch online. The Nielsen estimates incorporate 2010 census data but the first indications of lower television ownership were seen as early as 2008 surveys.

 

Sony Joins the WebTV Game

In a time when the entertainment industry is struggling to tap new markets and find new veins of revenue, Sony holds on for the ride through the crazy world of web TV.

Crackle.com, Sony’s media portal established in the early 2000’s, is seen as one of the elder statesman in the game.

The competition in the virtual marketplace has been fierce with many business models appearing and disappearing without notice. Monetizing the viewership of these virtual media portals is no easy task. Many well-respected entertainment conglomerates have retreated from the Internet choosing to focus on tried-and-true monetary models such as features and traditional long-form series.

A channel like Hulu, for instance, depends solely on advertising revenue while portals such as MegaVideo depend on the subscription model. Sony is distinguishing itself among its weakened rivals by learning from the lessons of the past.
Keeping content fresh, flowing and full of big named stars has been the cornerstone of Sony’s stamina on the web. While other companies are looking for a traditional model to monetize the Internet, Sony is looking at the forest for the trees. Sony plans on porting Crackle.com as the lone media content portal for the Playstation 3, making it a prime outlet for third-party media companies to cozy up to the tech giant.

Sony made many of these mistakes early and has done a good job at learning from them and expanding their business model to suit. Understanding the psychology of the web is allowing Sony to maintain a foothold in the ever-changing world that is business on the Internet.

Peter Koeppel is Founder and President of Koeppel Direct, a leader in DRTV direct response television, online, print and radio media buying, marketing and campaign management. With a Wharton MBA and over 25 years of marketing and advertising experience, Peter has helped Fortune 500 companies, small businesses and entrepreneurs develop direct marketing campaigns to increase profits.

Peter started Koeppel Direct in 1995 and has built it into one of the leading infomercial direct response media buying firms in the U.S.

High Fashion Relents To Web’s Pull

Before the recession, there was a sort of unwritten agreement between high fashion, department stores, and elite outlets not to use the Internet (considered, apparently, “low brow”) to reach out to wealthy customers.

When the recession hit and sales plummeted, however, all bets were off.

Department stores began slashing prices on high-priced inventory to get it off the shelves and luxury designers and outlets began to feel the crunch as fewer and fewer buyers were to be had. Now exclusive brands and high fashion designers and sellers are embracing the Web as a way to not only promote themselves, but to sell directly to consumers in Web-based showrooms.

Marc Jacobs, the flamboyant fashion designer with a $5 billion brand, has gone whole hog online. A year ago, admits his brand’s president and vice chairman, they were ready to stop delivering product to retailers who were deeply discounting them in order to make sales. Now, Jacobs has one of the most well-trafficked fashion websites on the Web with marketing and content to match its namesake’s offbeat style.

Other luxury brands, including Jimmy Choo, Hugo Boss, St. John, Kiehl’s and others, are beginning to embrace the World Wide Web as a new frontier as well. They’re all finding that they can often sell at nearly full price directly through the Web and may be finding buyers that they never would have seen in their retail outlets.

The added control over pricing and profits has also appealed to many brands, who’ve long established themselves as exclusive by offering not only one-of-a-kind designs, but also by pricing them to match their uniqueness.

The flashy, content-empty, picturesque sites that displayed information about the designer and little else are going out the door into Web history and being replaced with beautiful, but more functional online presence portals.

Few holdouts remain as fashion and elite brands embrace the Web as their markets falter.

Google Teams with Sony and Others to Move Into TV

In its attempt to merge television with the Web, Google has teamed with Sony to create Google TV.

With a hi-def TV or Blu-ray player from Sony, viewers will be able to watch regular television and movies or go online to surf services like Google’s YouTube for television content.

At its annual developer conference in June, Google cited the unfriendly menu systems of most cable and satellite television providers, explaining that Google TV will be able to give viewers the content they want when they want it.

Sony will have the player built into its high-definition televisions and Blu-ray players and gadget giant Logitech will also offer separate set-top players. Both will use Google’s Android operating system as their backdrop and devices are expected to hit stores this fall.

So far, the devices will be available only from Sony and Logitech and only at Best Buy stores. Google is working hard to convince other retailers, such as Walmart, to come on board as well. Given the price point and high cost of some components, such as the Intel Atom chips that power them, however, convincing discount retailers to carry Google TV may be a challenge.

Watch for the Sony Internet TV and Blu-ray players in Best Buy stores this fall.

Kylo Gives TV Another Problem to Worry About

Hillcrest Labs, a small company in Maryland, has potentially eliminated many of the downsides of hooking the Internet up to one’s TV – giving major networks another huge headache on top of the concerns they already have about online streaming video competing with their own offerings.

The company’s offering is a browser called Kylo that works particularly well on TV screens, with larger icons and an on-screen keyboard so that users needn’t have their laptop handy to manipulate what’s happening on the screen. It also comes with a remote control called a Loop that serves as a kind of combination mouse and remote. It can be waved in the air to move the cursor on the screen, and it has buttons that allow the cursor to click on icons and use the online keyboard to search.

These features are great for users who have struggled with the TV-computer hookup combination, but for the networks, it simply offers one less reason why users would want to pay money to watch shows on TV – or even look at the expensive advertisements and myriad of interesting infomercials.

Hulu.com recently banned Kylo users from their website, citing agreements with partners and investors that essentially agree that online video is designed to be kept online. As Kylo is especially designed for use with TV screens, Hulu.com raised a red flag.

Users are getting more innovative with their technology, however, and it seems it’s only a matter of time before the remaining disadvantages of watching TV online, such as smaller screen size, are eliminated for good.

Is Facebook Connect Ousting Facebook?

We’ve seen that the social media crowd is fickle.

One year the hottest thing around is LiveJournal, next it’s MySpace, next it’s Friendster.

Considering the fact that most of you reading just now scoffed to think that anyone uses any of those platforms anymore, it’s not surprising that there were predictions that Facebook would lose momentum after a year or so as social media fans found other outlets.

Not so. Facebook has actually been increasing in popularity and its users show no sign of intending to go elsewhere. Many attribute this staying power to the fact that Facebook has actually encouraged its potential rivals to use its own platform to talk to new customers.

Third-party software developers work with Facebook instead of creating rival sites, which means that the latest, hottest thing can live and die on Facebook without actually risking the larger platform losing its popularity. There’s always something new and hot to get interested in.

It’s possible Facebook shot itself in the foot with the introduction of Facebook Connect, though. This development lets outside sites become “partners,” which means visitors can log in with their Facebook username and interact with their Facebook friends when they’re no longer on the Facebook site.

It’s one thing when rivals work on Facebook, but it could be extremely risky to chance Facebook showing up on rival platforms. With so many other ways to interact with their favorite Facebook features, will users decide they no longer need to show up on the official Facebook site?

Blockbuster Takes a Hard Hit from Wal-Mart

Blockbuster has been losing revenue to other movie providers like Netflix and Redbox for the last few years, and it’s about to have to take on an even bigger rival: Wal-Mart.

Wal-Mart already had a huge amount of Blockbuster’s retail sales when they began to offer low-price DVDs, but now they’re entering into the digital download market, and this may be the final nail in Blockbuster’s coffin.

The company is already reporting extremely low net loss for the year at $183 million, in part because of poor holiday rentals and sales. As consumers increasingly turn to downloads – the numbers have doubled in the last year alone – Blockbuster may simply not be able to provide consumers with the ease and quickness they need in a rental provider.

The company tried to solve the problem by partnering with NCR, which rents movie kiosks at locations like supermarkets so that buyers can rent their DVDs when they’re already out running other errands. Blockbuster has been closing stores and relying on the kiosks more heavily, but being able to pick up a movie at the same time as that gallon of milk may not be convenient enough.

Increasingly, viewers want to get their movies without leaving the house – and Wal-Mart has already beaten Blockbuster to the punch by getting in on the downloading market first.

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