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New Marketing Gimmick – Free Shipping Day

free-shipping-dayBlack Friday, Cyber Monday, behold the new creation of Retail America - Free Shipping Day! Considering my sad experience with these fake “holidays” I tend to think sceptically of all the new tricks the corporate marketing geniuses throw at me. Let’s dig into this latest creation a little bit more.

The idea to start Free Shipping Day came to Luke Knowles, the founder of FreeShipping.org, on December 5 of last year. FreeShippingDay.com launched on December 8, 2008 with 25 participating merchants. The list would then grow to 250+ members by December 17 as the media picked up the story. The site attracted over 250K visitors last year according to this article.

In the concept, the 700+ merchants participating in this year’s Free Shipping Day have to guarantee delivery by Christmas however the free shipping itself doesn’t have to be unconditional. Naturally you will find a lot of offers with strings attached (like minimum purchase required) and unfortunately the website is not clear on what exactly you get.

Free shipping is offered year around!

I just ran a couple of reports for free shipping deals submitted on Buxr and it turns out that almost 60% of all deals in 2009 had zero shipping fee. So you don’t really have to wait till the end of the year, free shipping is offered routinely by merchants like Buy.com, Newegg, Dell and Mertiline. Here are some 2009 stats to prove my point. You can see that the number for Walmart is a bit on the low end however you should consider that most their products qualify for “free ship to store” or the subsidized $0.97 shipping to home.

Total Deals Free Shipping
Deals
Free Shipping
Deals (%)
All Merchants 16471 9638 58.51%
Amazon 1298 736 56.70%
Buy.com 2056 1967 95.67%
Dell 675 579 85.78%
Frys.com 266 106 39.85%
JR.com 170 131 77.06%
Meritline 600 594 99.00%
Newegg 1448 1317 90.95%
Staples 243 148 60.91%
Walmart 461 106 22.99%
Zipzoomfly 130 128 98.46%

So what is Free Shipping Day?

In my view it is yet another marketing trick to make you whip out your wallet and buy more stuff. Does the website offer any useful information? As I mentioned before many of these offers come with minimum requirements and there is no way to see what you really get ahead of time. In addition, many merchants will do guaranteed delivery after tomorrow. These two things in essence render Free Shipping Day useless. Instead, I suggest you look at this list of shipping deadlines and some practical tips on what to buy for a holiday gift if you are a procrastinator.

Related: Free Shipping Day: What’s the Deal? at Time.com

Bing Cashback can cost you money

Imagine you are an owner of a small antique shop on Main street of a tourist town called ‘Bing’. You are doing your business just fine, the sales are not great but enough to make ends meet. Now imagine the township announces new initiative targeted to bring more visitors to the town, they call it ‘Cashback’. Should you accept, you will get your front door remodeled for free and the village will advertise your business. However there is a catch - you are required to pay back each customer who buys something at your store a percentage of the sale. The idea is that as customers see the cash flowing back to their wallets they will tell about ‘Bing Cashback’ to their friends who will want to take a tour of the town as well. ‘Bing’ of course has more than antique shops on Main street, but this is besides the point.

Now imagine that your shop has a backdoor which wasn’t remodeled, and by the way, this was the door that all your regulars have used all the time before you got on ‘Bing Cashback’, and they still do.

Two things can happen in this imaginary world:

  • If you keep your prices low (at the level before you joined ‘Bing Cashback’) you will hurt your bottom line
  • If you raise your prices to compensate for the lost revenue, you will hurt your regulars, who still use the backdoor and don’t get cash back

It sure feels like your business is doomed either way, that is unless you have a magician friend, ‘Marketer’, who comes up with a ‘genius’ solution. He invents special glasses that when used will make the price on all your merchandise look higher, and he then suggests to give out the glasses to everyone who comes in the store through the ‘Bing’ remodeled frontdoor. You take on the advice, your business is booming until one day an ‘unforeseeable disaster’ happens - one of your customers takes off the glasses and sees the lower prices!

This is what in essence happened today with a New Jersey based electronics seller Butterfly Photo when Meghani, a blogger at search engine startup Bountii, exposed their ‘magic glasses’ practices to the world.

Butterfly Photo set a three month cookie on my computer to indicate that I came from Bing. Any product I look at for the next three months may show a different price than Id get by going there directly.

Meghani claims he knows ‘more than a few instances’ of this kind of ‘magic marketing’, but he unfortunately doesn’t name the specific stores.

On one hand, the online world has opened new unimaginable before marketing opportunities as well as new ‘creative’ ways for businesses to scam their customers. On the other hand, thanks to social media, ‘business failures’ like this have become more costly for business owners which to some extend counter balances the situation. Overall I feel excited to live at the time I do and be a part of this ‘online revolution’.

What is your experience with Bing? Have you ever been a target of the dual price ‘magic marketing’? Do you think Bing Cashback will bring Microsoft success in a similar way the banks have benefited by hooking their customers to the cash back rewards credit cards?

Why retailers use rebate cards instead of checks?

The two last gadgets I bought were from Staples and Radio Shack. Both had mail-in rebates and both came in a form of a Rebate debit card issued by Visa. This is a move from rebate checks that the companies used in the past and I should add a move I don’t like.

In case of a check I would simply deposit it into my account and life goes as normal. In case of a debit card, I can’t just withdraw the funds. According to the instructions I have to use it as a credit card which raises a couple problems. First, I have to keep track of the remaining balance and make sure I don’t overcharge. Second, if I need to charge more than it is left on the card then I have to use partial charge - something online stores don’t do.

The overcharging is a bigger issue that it may seem. No, you don’t get slapped with a fee. Instead the retailer attempts to put a hold on the funds and you can’t use the card until the hold is released (a few days in my case).

So why retailers move to debit cards? Since using cards is not convenient for the customers it has to be done because it is convenient for the retailers. Here are a few things that cards enable retailers to do:

  • They have your money until you use it - the balance on the card is in the retailers’ account until you actually use the card to buy something, and every bit helps the business especially in the kind of economy we are right now
  • They make money off of your purchases - Visa typically charges a fee each time you use the card for a purchase. The company issuing the card may well get some charge backs. Even if they don’t, I am sure Visa will gladly cover the expenses for issuing and mailing out these cards, something retailers have to pay for themselves if they use checks
  • They keep the remainder of the balance - If you discard or lose the card w/o completely using it then the issuer keeps the remainder of the balance. Why would you not use it all? Because of all the difficulties associated with calculating the remaining balance.

All of the above is a speculation based on my experience and common sense, so don’t take things for granted. The explanation however seems very plausible to me and I would really like to find out if I am right, so if you have any insider knowledge on how things work in the marketing department of these companies, please leave a comment.

Photo courtesy of licokao @ Flickr

How Ticket Master promotions really work

I love Cirque du Soleil shows. The combination of human performance, costumes, decorations and the music leaves a long lasting impression on me. Naturally when my friend called me today saying Cirque du Soleil will be in our town this week with their last Chicago area performance I was totally hooked!

He forwarded an email to me with a special online promotion that entitles to a free child ticket with paid adult. The promotion was through Cirque du Soleil members club and delivered by Ticket Master. You essentially were given a special link which brought you to the usual Ticket Master page where you buy the tickets at a discount. Sounds good, right? That is what my friend thought until he went on to order his tickets.

What turned out is that if you use the promotional link computer algorithm at Ticket Master will pick the worst seats and will try to sell those to you even if you instruct it to go for “Best Available”. This usually means you get a crappy section with a view from the side, something you absolutely don’t want to happen when you go with a family or friends.

I called the 800 number on the Ticket Master “contact us” page and spoke to the operator who pretty much confirmed my fears. They do have the ability to override computer selected seating unless it is an online promotion like mine in which case the computer will start with side seats and will move on to the middle only after the side seating is filled.

I am so pissed off. I think Ticket Master must disclose this on the promotion page. It is such an unfair thing to do! I understand the business side of it, they sell out crappy seats at discounted price, but it shouldn’t be offered as something exclusive and presumably done in an “effort to say thanks” to the loyal Club members. Don’t you think so?

Buxr Update: Launching New Contest

The project I launched with my partner last December has been consuming all my free time recently. It seems like my deal contests idea has picked up and we now have a few regulars who come to share deals every day. I work late nights adding functionality to the site and it seems to pay off nicely. No, not in monetary way. We have been in red since we launched and I don’t expect any profit for another year at least. Yeah, starting up is tough. ;-)

The experience however is greatly gratifying. On an average week day we get around 50-60 deal submissions and just about as many comments from our members. Unlike ProBargainHunter, Buxr is built around a generic open-source web platform and I enjoy the luxury of being able to add all the possible tweaks to make things convenient for bargain hunting and shopping, something I couldn’t have done with this blog. Wordpress is a great platform, but it is more like a Swiss Army knife. You can do many things with it but you will never be good at anything in particular.

So we have plenty of deals and comments at Buxr. What we don’t have enough of is opinions. Yes, opinions on shopping deals. The deals, even the best ones, don’t usually get more than 10-12 votes and this is not nearly enough to create a balanced out picture of how hot the promotion or a coupon really is. One - two members can easily sway the votes towards a certain niche/category. What is more important, members with friends can have much more influence on votes than those without (but this will probably always be an issue).

Either way, I think more participants would balance things out a bit and this is why starting next month we are launching one more contest. We will be rewarding members for inviting friends. Top 3 by the number of referrals will get cash prizes at the end of the month. We’ve got to find more people who could contribute to deal voting, and I don’t see how else we can do it effectively and without spending enormous amounts on marketing.

If you love bargain hunting and have friends who might enjoy it too, come and join us at Buxr.com for the next month contest. By the way, here is a photo and a guest blog post from our last month’s winner!




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