Auckland Kindle Buyers at Dick Smith Beware if You Want to Read Library Books

I have a Kindle, the latest model WiFi 4GB which I bought from Amazon, cheaper than I could buy it locally, which sort of goes to the story I posted this morning about retailers who struggle to cope with change in the way people buy products, i.e. competing with online sales. My wife and I both have iPads, but for reading on long trips or after a day on the computer, I really like the Paperwhite because it isn’t back-lit, so doesn’t cause eye strain.

I am also a happy customer of Auckland Libraries, mostly downloading audio books which I listen to while driving or doing chores like mowing the lawn.

My wife decided after seeing myself and one of our children getting great value from our Kindles, that she would like one too. With the Auckland libraries also having an excellent collection of digital eBooks, I thought this would be a great opportunity for us to get real value, so I went to Dick Smith Electronics in downtown Auckland to see if it was worth buying locally.

Kindle DSEJust inside the door is a Point of Sale unit with a Kindle Paperwhite, same model I own and an old model original Kindle Fire (which I understand was superseded quite a long time ago). I looked at the feature display sheet and it says that Kindles including the Paperwhite will allow you to read public library books. Now that isn’t strictly wrong because I know someone who reads them, but they are from Australian libraries. I wanted to confirm whether I could download eBooks from the Auckland libraries onto a Paperwhite. The salesman couldn’t tell me, he was going to check for me, but couldn’t confirm anything and ended up with another client while I went on my iPad to look it up. I asked him to check it out for me. Obviously it was confusing because their POS clearly said I could read library books. When he couldn’t give me an answer, I asked who could. He said that the merchandisers were the people who dealt with the POS so I asked if I could talk to them. That wasn’t possible, so I asked who the distributor was that they worked for. He said they are actually Dick Smith Electronics staff!

Here’s what I found on the Auckland Libraries website. Auckland LibrarySo, given that I wanted to buy a Kindle for my wife, I asked the sales person, when he eventually returned to me to let me see a Kindle Fire to find out whether it would be better on the eye that the iPad, because I didn’t want to buy the Paperwhite at $179 if it couldn’t download the library eBooks.

The sales person said he was sorry, but he couldn’t show me a Kindle Fire because they didn’t have one out of the box; and he couldn’t open a new one because then it wouldn’t be new. I told him in that case he had lost a sale because I wasn’t going to buy one if I couldn’t try it out and see if it was fit for purpose. It’s hard to be a customer at Dick Smith Electronics. I left the store without a purchase. I tweeted that they had lost a sale.

In hindsight I could have bought one because under the Sale of Goods Act, if it wasn’t fit for the purpose I had described to the sales person, I could have brought it back for a full refund. He could have even suggested that, but he didn’t. I also live about 12km from the store and it would be a real hassle if I had to take it back. I hate to think what the customer service level would be for a return after that experience. So my wife still doesn’t have a Kindle.

DSEI subsequently got a Twitter message from Dick Smith Customer Service saying that someone would give me a ring within 2 working days. As you can see, that was just over 2 weeks ago. I haven’t had a call or a message (in case I missed one) since.

So I’m probably going to buy another Paper-white Kindle from Amazon for US119 rather than NZ$179 or $199 depending on where you look, locally from Dick Smith and accept that we can’t download library books. We can buy books on one Kindle and share them with the other and Amazon also have subscription services which are pretty cool. I guess ultimately Dick Smith isn’t local anyway, they are Australian owned, I think, well listed anyway.

My real concern is, if you live in Auckland and you bought a Kindle Paperwhite because you read the POS which says you can read library books, you will find yourself disappointed. I have pointed it out to Dick Smith via Twitter, and the photo above saying you can, was taken in their store in downtown Auckland yesterday, so their in-store marketing hasn’t changed since I first brought it too their attention more than 2 weeks ago.

I did eventually talk to a librarian who confirmed that you cannot download and read library books from any Auckland libraries on a Kindle Paperwhite. It appears the reason you can ‘on some Kindle Fire’s’ is in fact because they are Android Tablets.

So what do you think. Does it help clarify why I sometimes buy things offshore instead of in local stores? Sometimes it’s actually easier.

Does Your Business Have CIPA? (Read Time 82 Seconds)

I’m just finishing the book Socialized by Mark Fidelman. It is one of the better books I have read of late about harnessing social media. Many of these books date very quickly, but the information in this 2012 book is still very relevant and I recommend you read a copy.

Socialized-book-coverTowards the end Mark relates the story of a girl who suffers from Congenital Insensitivity to Pain, aka CIPA. It was an analogy to businesses who are heading down the gurgler at a rate of knots and don’t even realize it. Those of you who read my blogs will know about how frustrated I was to see Borders self implode, when they didn’t need to. As I mentioned earlier this week, many businesses are being hurt but not realizing it, or not knowing what to do about it. It’s that frog in the pot of simmering water. We all know the story, but many of us are sitting in that pot, enjoying the warmth and then getting severely cooked.

In my experience, it is people who aren’t institutionalized in your business who you need to talk to. If it’s not consultants like myself, at least talk to your customers, the ones you have left. Ask them why they come to your business. What is it that drew them in and how can you give them what they want and stay profitable?. I had loads of answers for the book industry, but they ‘knew what they were doing”. They focused on best sellers, general merchandise goodies and even fluffy toys. The questions you need to ask have to be qualitative, don’t give them choices you think they should answer, have conversations with them. Or get out quick and sell your business to someone while it still has some value. I still maintain if I had been on the management team or board of Borders in NZ, they wouldn’t have floundered, they would have risen like a phoenix out of the ashes of the past and their stores would be full of people, in many cases still buying paper. BORDER-CLOSED

Do does your business have CIPA? Are your margins declining, is your stock-turn going down? Are people buying similar products online instead of from you? Are your customers slowly churning to other sources or evolutions of the goods and services you offer? What have you done to future proof your business? As I said in my other blog earlier this week, people are reading more, listening to more music and taking more photos daily than ever before.

Got any questions? Feel free to leave them as comments and maybe we can have a discussion about this.

It’s Hard For Retailers To Embrace New Mobile Marketing Technology

I’ve been engaged in a conversation in a mobile marketing group LinkedIn discussion where people involved in solutions such as mobile coupons are complaining that retailers are intellectually lazy and not looking to embrace new technology.

I argued that most retailers focus on BAU (Business As Usual), working in their business employing strategies and technologies they have used for years, which they understand and can deal with. They do not spend anywhere near enough time working on their business, including strategies to embrace new technologies.

sold outMany retailers have been hurt by one-day deal companies, where they gave up 50% and more in GP in the hope that if they gave great service, they would win new loyal customers. Of course we now know that didn’t work and the only ones that made big money out of it were one-day deal companies. They didn’t have to invest in inventory or carry any risk to speak of.

I’ve presented at a number of conferences on the topic of mobile and location based marketing. What I found really sad was that of all the delegates, the number of retailers at these events could generally be counted on the fingers of one hand.

I’ve been looking at how I could help retailers, particularly in New Zealand and Australia with solutions available today in a cost effective way. I think I have come up with a solution, but its going to take me a fair amount of time and money to deliver.

I will start in the area of Travel and Tourism, largely because they are more focussed on customers who are actively looking for services and new experiences and the industry is used to investing to win new business. Their market is also tough and the traditional business services continue to largely support those who own the systems, ie reservation engines, directories, commissions to tour operators, rather than retailers themselves. These businesses are easier for me to access and easier to quantify direct ROI. Also the individual transactions often have a higher dollar value, so if I can demonstrably increase their cashflow and profit and share in the gain, I can recover my costs more quickly.

I was thinking about how hard it is to get retailers out of the shop to talk to them and from years of calling on owner operator retailers in the past, trying to talk to them in their own environment with customers in store, that’s all but impossible.

So I’m thinking retail readers, if there are any here, and would welcome your feedback on the best way to get in front of you and your peers. The problem is that most of them will never read this. The majority do not attend retail conferences, they don’t even participate in their own main-street organisations. They don’t even do something as simple as co-promote their neighbours. I remember years ago hearing Mark Blumsky (past retailer and Wellington Mayor) talk at the New Zealand Retailers Association conference about how he collaborated with his neighbours by giving away free coffee coupons at the next door cafe to people who bought shoes from him and the cafe gave discount coupons for shoes to their patrons. Leading retailers (because they were at the conference) all talked about it during the lunch and coffee breaks, but I don’t know if a single one of them ever emulated the exercise.

We have amazing free services such as Foursquare and people have probably used one of these apps to check into your store. They may even be your Foursquare Mayor, but you probably don’t even know what Foursquare is.

You need to embrace mobile technology and I want to help. But you’re probably not reading this, so you will have to wait until I have helped some other people first. If you are reading this, leave a comment, connect with me and others who want to see Australasian retailers thrive and grow in this exciting new world. Learn at your own pace, but please step outside of BAU and do something. One little step a day is 365 steps a year and that’s quite a lot.

Blame the Technology and Australia

Continuing my search into what happened at Whitcoulls and Borders and  generally what’s going on with New Zealand retailers I am finding no surprises, which is a real worry. Two words come up a lot. Technology and Australia. I know a little of both. I live for technology and have trained many retailers over the years (including some who were already millionaires) and while the technology has changed, the principles haven’t. More on this to come.

Australia and New Zealand

As to Australia. In the 90’s many Australasian retailers who had New Zealand operated subsidiary chains based in New Zealand, decided to do away with local country management, local buyers etc.  and to save lots of money by treating their NZ shops as Australian branches. I guess they considered New Zealand as a slightly bigger Tasmania. Not huge, but worth having, especially if they didn’t put much effort into senior staffing  resources.

When performance decreased they blamed the economy, they said that NZ was just an over inflated state and it was always going to be that way, which was how they justified reducing local resources in the first place. The fact is while we may have a lot in common, we are not the same. We are made up of different cultures and history and have subtle differences in our lifestyles. Subtle enough that you can’t treat NZ stores the same as Australian stores and expect the same result.

Similar scenarios happened in many cases with the decades of American Globalisation. It’s funny really that America wanted to change Japan and the rest of Asia Pacific while Japan wanted to change the west. I well remember having discussions with senior management of Casio in Tokyo and Hamura about improving the software on their cash registers. One of the issues was that they hadn’t allowed for people pressing buttons in the wrong sequence. Have you ever been in a retail store when the ECR (Cash Register) is bleeping loud noises no matter what buttons are pushed and the stress it caused the cashier? Their initial response was “They must use the ECR in the right way or you should find better customers”. We ended up beta testing their software in NZ and Australia first and then getting Japan to tweak their software. That was one of the initiatives that helped us get 70% market share in the ECR market in NZ and helped Casio increase theirs around the world. But then of course the company I worked for was sold and I along with my boss and several other great people were made redundant despite the fact that we were doing really well, but because they thought we were earning too much. I’d love to know what their market share is in NZ now. I know it isn’t 70%. Anyway I’m going off on a tangent.

The big thing I noticed in the NZ stores was inventory management. They were carrying a lot of books that I wouldn’t think anyone would buy other than as a joke. I went back to Borders a week ago to jot some of the names down, but it looks like they went in the $1, $2, $5 sale and were gone. They had many dated books especially computing which must have been in store for several years, technical books on how to use software that almost no one has used in the last 5 years.

From what I’ve been told, someone automated the purchasing software to replace books that had sold, so for example if a particular book sold really well, say 5,000 copies, the system would replace with another 5,000 copies. Well there goes the profit from the first lot.

One of the things that makes New Zealand different is our ethnic communities. All over New Zealand, but particularly in Auckland we have clusters of ethnic communities; Chinese, Korean, South African, Indian, Pacific Islanders and more. Brands who fail to take that into consideration waste massive levels of stock by having the wrong product in the wrong locations, which then becomes shop soiled and potentially unsaleable.

Inventory needs to be managed locally by category managers who understand and are at the leading edge of their category and who understand their local market. They need to know weekly what is going on and understand who their customers are and what they are buying. Some books date more quickly than others and need to be moved on quickly, others will hold their value longer, but will still have a rapid half life.

In my previous blog about Whitcoulls and Borders I wrote about how they could follow the example of Amazon and know what their individual repeat customers were buying and therefore their interests and could recommend books to them. Amazon continue to prove that people in NZ will buy based on recommendations along the lines of “You bought these 3 books, other people who bought the same books also enjoyed the following titles”. Not only do we often buy them, but we also pay massive freight costs to get them here, at the same time as local book retailers are discounting stock that people aren’t buying. How smart is that?

One good way of dealing with this is using Business Analytics or Business Intelligence tools such as BIonaMAP, soon to be launched by New Zealand geospatial solution provider, GeoSmart. Fortunately for retail chains, this product will support both Australia and New Zealand, so users can have visibility over both countries.