ERT Information
ERT Jobs
Stay ahead of the competition
> Go
RSS Blog Feed

Fox Vox
23 July 2010

Amazon represents a stealthily mounting threat for brown goods dealers of all shapes and sizes.

Although Amazon started out selling books online in 1995, it soon moved into CDs and DVDs and now heavily promotes electricals. And it does so in a very clever way.

Once a customer has bought one product, Amazon pushes carefully selected suggestions for further related products every time the customer goes back to the site.

Amazon's computers are continually learning what the customer likes or what "people who bought this also bought…". It's a bit like the old TiVo PVR – soon to be revived by Virgin – which recorded TV programmes it thought the owner might like.

At a recent electronics industry seminar, Colin Dixon,principal analyst with TDG market research, asked the audience to put up their hands if they had bought from Amazon, and then bought something else because of an Amazon recommendation. Up went a forest of hands.

"Amazon, like Netflix, and like TiVo, won't tell us anything about what they are doing or how they are doing it," he said.

"So we are just about to do a survey and my prediction is that it will show what we have just seen from this audience - around 80 or 90 per cent of people who use Amazon take advantage of Amazon's recommendations."

The Amazon threat to brown goods bricks-and-mortar dealers is virtually infinite because Amazon does not just sell direct. For more specialist goods, it directs customers to specialist online stockists, who pay Amazon for the direction.

Dealers can really only compete on before- and after-sales service, and word-of-mouth recommendation. But like eBay, Amazon runs a "review" system, which lets customers post comments on what they have bought.

What most customers probably won't know is that Amazon's review system works very differently from eBay's. I found this out purely by chance recently.

To cut a long story short, I bought a (non-electrical) item and thought it had design and safety flaws that prospective buyers should know about. Amazon lets customers contact the vendor by email (via Amazon), so I responsibly offered the chance to comment before I wrote a critical review. The first response I got back was a brush-off.

It read: "We do take all customer comments and product information seriously. Rest assured that your experience and comments will be passed on to the relevant department. Again thank you for your feedback."

I persisted and got nothing much better. "It would be false of us to claim we have detailed knowledge about or could make alterations to the design of such products, as this is completely out of our control," they said.

So I wrote a review that explained the problems I had encountered and quoted the vendor's responses. But Amazon refused to publish it unless I took out the reference to the vendor's comment that they expect all their reviews to be focused on the item not on the seller.

If customers who buy brown goods online through Amazon, instead of through a high-street store, realised when they read a review on Amazon that it cannot contain any comment about the vendor, more people might buy from a high-street dealer.

But how to get the message across? Any ideas, Retra?

Barry Fox


Email the editor

Print this article


Social Network

Facebook

Twitter