10 Things You Need to Know to Start Your Week

Amazon Update

  • 1. Amazon inked a deal with Viacom for access to its shows in the Prime Instant Video service. Viacom is the parent company of cable TV networks like Comedy Central, MTV, and Nickelodeon and the deal brings Amazon’s selection of TV shows and movies to about 15,000. Prime Instant Video is a feature of Amazon Prime, which also provides unlimited free 2-day shipping on most Amazon items for $79 a year. If Amazon could bring its streaming options to parity with Netflix, there would be little reason for consumers to choose Netflix’s more expensive service ($7.99/month vs. $6.58/month) over Amazon’s.
  • 2. Amazon has changed its shipping policy in China. The company will now charge a CNY5 ($0.79) delivery fee for orders under CNY29 ($4.58) as opposed to free delivery on all items. The new policy applies to all items shipped by Amazon but not those fulfilled by vendors directly. 360Buy.com and NewEgg.com.cn also recently started charging for the delivery of orders under CNY39 and CNY99, respectively. The moves highlight the difficult economics of offering free delivery in a vast and developing market like China.
  • 3. Amazon is rumored to be opening its first retail store in Seattle. The store would reportedly be a boutique that would sell Kindles, Kindle accessories, and physical books. With a rumored Apple-like environment, the store would give those who don’t shop online a venue for trying Amazon’s Kindle devices. Amazon’s exclusive printed titles would also be sold, something which its competitors are refusing to do. Amazon would test the store’s profitability before rolling the concept out further.

Other Online Companies Establishing a Physical Presence

  • 4. Google is also opening its first stand-alone store in Dublin, after opening a couple of stores-within-stores. The roughly 1,300 square foot store would sell Google merchandise, presumably Android phones and tablets and Chromebooks. Additionally, following the company’s recent purchase of Motorola Mobility, the company is planning on selling its own hardware, both in mobile and home entertainment. Google stores would build its brand as a retailer while letting shoppers trial their new, dynamic technologies.
  • Living Social Facility (Source: InTheCapital)

    5. Living Social is opening a new 28,000 square foot facility in Washington D.C. to host events and classes relevant to the deals they offer. The location features a demonstration kitchen for up to 36 people, three flex spaces that can be turned into dining rooms, dance studios, classes, craft workshops, and a basement bar for mixology classes or tastings. Local businesses will be able to host events and offer deals to attract potential shoppers in a more controlled setting than a typical daily deal. Living Social is attempting to create a more personal experience for their brand while also helping local businesses attract more loyal customers.

6. Alice.com is changing its shipping policy. All orders over $40 will ship free, there is no longer a 6 item minimum, and orders under $40 will have a $6.99 shipping fee. They are also offering a 5% discount on orders over $75 for a limited time. Alice.com is a pure play online retailer of household essentials with a twist–unlike typical retailers who buy and sell products, it collects a fee from CPG manufacturers in exchange for shipping products and providing customer data. The website also helps shoppers keep consumables like toilet paper and shampoo stocked by offering reminders on set intervals. While Alice.com received much attention at its launch because of its innovative approach, it has yet to reach any scale with less than $20 million in 2010 sales.

7. Flipkart, a leading Indian online retailer modeled after Amazon, has acquired LetsBuy.com. The announcement comes just days after Amazon launched in India with its Junglee platform. The acquisition will give Flipkart greater market share as they try to consolidate the burgeoning e-commerce market. LetsBuy.com will also give Flipkart, which started as a books and media retailer, a leg up in electronics. Both companies have been growing their revenue at over 100% annually, and RNG forecasts that the two will total $1.2 billion in sales in 2015.

8. Verizon and Coinstar’s Redbox are forming a partnership to rival Netflix. The partnership would combine Verizon’s FiOS TV service and its streaming capabilities with Redbox’s 35,000 DVD rental kiosks into a monthly subscription. Starting at $6 a month, the service would offer movie streaming and one Redbox DVD rental at a time. While Redbox’s offering for physical DVD’s is arguably more convenient than Netflix’s, the success of the service will hinge on the quality and the quantity of the streaming content available.

9. Modiv Media has introduced a mobile-social coupon feature to its mobile shopping solution. Modiv makes retailer-branded apps that let shoppers scan, bag, and checkout with their smartphones while also offering targeted offers. With the new feature, retailers will be able to offer coupons from a variety of sources and shoppers will be able to share them via Facebook. Modiv will also provide valuable analytics on these socially shared coupons to retailers and brands. RNG believes that apps offered by retailers will only gain traction if they offer killer features like self-checkout, personalized offers, and list management.

10. Funding & Acquisitions

  • OpenLabel, an app that attaches crowd-sourced information to barcodes that helps shoppers decide whether to buy, has raised $80,000.

About Nate Holmes

Nate is a Research Analyst with RNG, and he’s responsible for the forecasting work and analysis covering Ecommerce as well as the global Big-Box retailers such as Hypermarkets and Warehouse Clubs. His area of specialization is in the Digital / Innovators space. Nate’s geographic focus under the STEIP market analysis framework is North America. Nathaniel received his Bachelor of Science in Mathematics from Tufts University. During his academic studies, he was active in the academic community in such programs as Computer Science, Engineering and Math Scholars (CSEMS), and his hobbies include music and sports.

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