Tennis balls and the failures of the Amazon ecommerce model

I played tennis Monday afternoon and noticed our tennis balls were just about through their useful life. After dinner, I started wondering how to replace them, living in my Upper West Side apartment, closer to the tennis courts than anyplace that would sell balls (the courts don’t, although they should).

Offhand, I couldn’t think of anyplace local to run in. Modell’s closed down, taking both local sporting goods stores out of our neighborhood. There’s a Target up here, but it’s way over on Columbus Avenue, and I don’t go over there much. We have some bodegas and 99-cent stores, but I’m not familiar with most of them, and didn’t want to wander around asking who has a sleeve of Pro Penns.

In an attempt to solve my problem immediately, I went, as we have been conditioned, to Amazon. Surely I could get some tennis balls shipped to the apartment before our next court time, on Thursday. (Disclosure: we are Amazon shareholders and Prime members.)

Turns out, yes, I could. But not in any useful way. Because Amazon’s model is cost-effective shipping, there’s no reasonable size worth buying; the site pushes you toward bulk: sacks of 18 balls, packs of 12 sleeves. Not what I’m after.

In addition, because Amazon is a marketplace focused on generating shipments with margin, the prices were awful. A can of tennis balls is $2.99 at retail, give or take. Not on amazon.com: they’re as much as $12, as I write this, for one sleeve of three balls. Even in bulk sizes, the prices don’t budge: I found $27.50 for four sleeves, for example ($6.88 per sleeve), and $59 for twelve ($4.92 per). Sure, you can get tennis balls tomorrow, but only if you’re compelled to leverage the free shipping and ignore the exorbitant prices.

Amazon’s current business model takes 34 cents on the dollar from its vendors. To sell me a four-pack of tennis balls, a reseller on amazon.com feels the need to charge $27.50 (at the time of this writing). After the reported 34% Amazon take, the vendor’s recognized revenue is around $18—still not three bucks a can, but at least not egregious. But Amazon isn’t concerned that the product is overpriced, it has that Prime lock-in. The site thus converts an ignorant shopper, traps a hurried one, or turns off one who’s paying attention. That last one, tonight, was me.

After a detour to the Dick’s Sporting Goods website, where tennis ball prices were fair ($18 for six cans) but free-shipping hurdles were high, I wound up on target.com. They sold me a four-pack of cans for $11.19. And because I have a similar relationship with Target as I do with Amazon, I threw in a few household staples and got free shipping, albeit a day or two slower than amazon.com.

And it turns out that Target on Columbus has individual tennis ball sleeves in stock. Maybe I’ll walk the dog over there and pick some up for Thursday.

After Shopping

Hey, I’m blogging again! Yes, a little bit here, but much more at After Shopping, my new site keeping track of the changing landscape of retail and storefronts as America grapples with the economic impacts of covid-19.

This is familiar territory for me in an unfamiliar environment. Longtime readers of this space will recall Timely Demise, which I spooled up during the financial crisis, just over a decade ago. I had a good run with it and learned a ton.

I’d thought about rebooting the concept for a few weeks and got set up in just the past few days. Once I found a name that resonated, and an appropriate angle to pursue, I was off and running. And run I shall: just to baseline the news to date for launch, I penned nine blog posts in the span of a few hours.

With effort, determination and a bit of good fortune, most of America’s retail footprint will persevere, but we’re already on a trajectory for an unimaginable amount of change. I’m hoping to capture as much of it as I can in one space and understand the forces and trends behind it.

I’m excited for this project and hope it proves interesting and enlightening. I wrote a little more about the concept over there, but readers can also just start at the top and explore.

Digital facts of the day

There are now around 130 million smartphone users and at least 55 million tablet users in the U.S. market. Among other trends, 15% of ecommerce transactions will be completed on mobile and tablet devices this year, a number that will only continue to grow.
While this is a prime opportunity to gain market share and–still–establish first-mover advantage, 45% of marketers don’t have a mobile presence, either with apps or optimized websites.
When I was working at Ai we would annually update our stump speech for mobile. “2009 is going to be the year of mobile.” “2010 is really the year of mobile–our clients’ stats show smartphone usage on their sites tripled last year.” Now, in 2013, mobile and tablet use is starting to drive the digital economy, in a shift that is not going to turn back around. Yet many brands have not capitalized on the opportunity. If not now, when?

The fuckup

And so it came to pass that I found myself in Miami Beach, with the rest of my company’s senior staff, a full day ahead of schedule.

You see, we’re at Internet Retailer’s Web Design ’09 conference. IR had asked us to give web design consultations–we are among two dozen organizations selected and vetted by the conference as worthwhile partners.

The way the conference agenda is laid out is as follows:

Monday–Design and Usability Consultations
Tuesday–Main Conference – General Sessions
Wednesday–Main Conference – General Sessions
Thursday–Post-Conference Workshop: Case Studies and Critiques

And as part of the line items on Tuesday and Wednesday, the agenda says the following:

9:00 a.m. – 5:00 p.m. Web Consultations (concurrently)

What I assumed, and what I failed to clarify, and what the conference never elucidated, and what was in the consultation appointment spreadsheet but glossed over by me repeatedly, was the fact that Alexander Interactive is part of the (concurrently) and not the Monday. Which turned out to be quite a discovery at 9:00 this morning, when we were rendered temporarily useless.

So here I am at the swanky new Fontainebleau in Miami Beach, thoroughly annoyed and self-critical, while my colleagues are off visiting grandparents, fighting colds and otherwise missing in (in)action, all of us frustrated–pretty much at me–while I spin and hope the perfect Miami weather can make up for a lost day.

I have this incredible urge to say, “It could be worse. It could be raining,” but something tells me I’d better not.

Buy online… but remember, we didn’t tell you to

USA Today: Retailers gear up for Cyber Monday. “Almost three-quarters [72%] of Internet retailers will offer special deals on Cyber Monday to kick off the holiday online shopping season, a National Retail Federation survey out today shows.”
BusinessWire: ”Black Friday” & ”Cyber Monday” Play Crucial Roles in Holiday Shopping Season According to BDO Seidman, LLP Survey of CMOs. “According to CMOs … a majority (59%) of retailers say they are not conducting any special promotions to encourage customers to buy online.”
This is corporate conflict in a nutshell: the Internet is a still-growing retail force warranting holiday promos like the rest of the retail world. Yet retailers are loath to intentionally drive consumers online, potentially decreasing foot traffic and same-store sales, and angering field sales staff.
Savvy retailers already know the best bet is to encourage purchasing via any channel, be it in-store, online, or over the phone. In time the rest of the industry will catch on.
(This kind of observation will soon find a home on the Ai blog, which will be relaunching in December with me as a contributor. See you there.)