So that is good news. “In recent years, we have seen an abundance of innovation, so we are moving into a new phase,” Mr. McElman said. “We have added investment to our business across all our vertical markets.” Mr. McElman says they have made significant progress in moving into the high-cost e-commerce era.
The move comes as online shopping continues to grow globally.
“The biggest players in our industry, Amazon and eBay, are moving into a more aggressive mode,” said Jeff McElman, who is chairman of the consumer-electronics equipment maker. “At the same time, we are doing more and more business that will take up space on our website and into our shopping carts. But we believe we can compete on pricing, availability and value in all our vertical markets, not just in the U.S., but even in our biggest customer areas.”
Cost savings should start coming into evidence this year, Mr. McElman said. “We have been doing some cost-reduction in equipment, and in some cases we have cut materials even further in order to make equipment more cost-effective and make the manufacturing process easier.” An online retailer needs to be able to offer an assortment of products of different quality levels. And that’s where Mr. McElman has some competitors. “Amazon is at an advantage. They have a much more extensive product line, and they have more customers that are trying to take advantage of it.” Mr. McElman plans to spend the next six months building a customer list that includes large retailers and consumer-electronics buyers such as Dixons, RBC Capital Markets, Aon and Cimavax. Amazon was acquired in 2010 for $1.5 billion.
“Our focus now is on growing online sales, and it will continue to be a very important part of the business,” said Eric Haverstock, general counsel for Amazon, Inc. “It took time to grow from the beginning, but it is growing now and will become even larger as we add new store locations.”
– In a speech at the Boston Economic Council , Mike Konczal says there are signs of an online retail revolution. He said the recent growth in online sales has sparked a frenzy in buying and shipping of products, with “the new normal of getting on the Internet and buying stuffthat was just unthinkable in 2003.” He says that while there are some risks, this isn’t a bubble, the next bubble we’re concerned about is an “information market bubble.” Here’s more about Mike’s forecast for the next six months: The Internet is changing the shopping and shipping behaviors of millions of Americans, creating an information revolution. What is occurring is a “shift to information as commerce.” But the biggest change: A new class of consumers is being formed, “a first- to fifth-generation of Americans with the skills and knowledge to shop and manage their shopping data” in an Internet-driven economy. “If you’re an executive or owner of an investment firm, you may be feeling very different now than you did a year ago when you got a call that the stock market was falling. For them, it looks as though the tide is finally turning.” This phenomenon doesn’t require any sort of new technologythere’s just the knowledge, skills and information to do the necessary shopping and shipping. I’m not an expert in this (maybe even a skeptic), but it sounds real I’m also not an advocate of the “information market,” although the details that Mike discusses in his talk are helpful. So I’ll probably be more skeptic of this than Mike or others will be.
- The “new normal” of buying and shipping that Mr. Konczal describes is certainly not what the big box store is used to. According to the same BESC report , it takes over three days to ship a consumer’s item from the point of purchase to the customer. And while most big box stores are still the most popular retail spots for groceries, they are becoming more and more popular for high-priced products for e-liquids, furniture, gadgets and many other retail purchases. I’m curious to hear your thoughts. As for Mike Konczal going into an “information market” bubble: that’s a real “bubble,” one that we should not expect to survive. But I guess Mike has never actually been to my local big box shop.