Friday 9 December 2016

Smart Consumer: Retailers must go with the online flow or risk drowning. . .

There are huge savings to be made by shopping on Amazon, writes John Meagher

Published 04/08/2011 | 05:00

-- Feargal Quinn

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Lost Dublin was published by Gill & Macmillian in 1982 and has been out of print ever since. This fascinating book documents hundreds of significant buildings in the city that were demolished in the name of progress.

I first came across it in an antiquarian bookshop in Dublin. It was €150 and the owner wasn't budging on the price so I immediately went on Amazon.com There was a mint copy on sale for €25. Add in postage and packing and the book set me back about €35 -- a €115 difference.

That's quite a coup.

But was it a one-off or are there other deals?

Yes. More and more, I find I'm buying books on Amazon rather than in main-street shops.

The savings can be significant on hard-to-find or out-of-print titles. I've also taken to buying US versions of books -- a case of judging books by their covers -- and editions that are published in America long before here.

The third book in Benjamin Black's Quirke series, Elegy for April, was published in the US six months before it appeared here despite the fact that the author is none other than Irishman John Banville. That cost me about €6 more than I would have paid had I waited for the Irish release, but as a fan I wanted to get my hands on it as soon as I could.

I'm also a voracious consumer of DVDs, although I don't buy as many online as I used to because main- street retailers like HMV have slashed their prices in recent years. I doubt I'm the only one who has turned to online retail for cost-saving reasons.

In the seven years or so that I've been using Amazon, I reckon I've bought almost 100 books and roughly 50 DVDs. In most cases, I saved money -- perhaps an average of €3 per item -- by shopping on Amazon, but those benefits have been offset by the probability that I have bought stuff on a whim while browsing the site.

It alarms me somewhat that my frequency of purchase has increased thanks to the user-friendly -- some would say wretched -- one-click function on my Amazon mobile app.

Amazon and other sites like it really seem to have cracked it, haven't they? Who's behind it all?

Jeff Bezos is a slight, balding man in his late 40s. There is a good chance he could spend a week in Ireland and not a single person would recognise him. He is the billionaire entrepreneur who changed the way we shop forever. Amazon last month posted second quarter sales of $9.9bn (€7bn), with profits of $190m in that three-month period. Its might can be judged by its stock market valuation of $100bn.

It was all so different in 1994, when Bezos started selling books from his garage in Seattle. The internet was in its infancy, but many bright 20-somethings were trying to devise ways to harness its potential to make their fortune.

Bezos reckoned he could undercut traditional bricks-and-mortar booksellers by offering titles at a cheaper price because his overheads would be so much lower than the high street but he knew he would have to offer a huge choice in order to lure potential customers.

After a slow start, his plan worked. Now Amazon sells just about everything -- from aftershave to blu-ray discs -- although books, both physical artefacts and electronic editions, continue to drive the firm's enormous sales.

In 2011, the notion of selling products online at a cheaper price than the high street seems rudimentary, but in the early 1990s it was revolutionary. There were security concerns about purchasing online in the early days and several dot.com visionaries had crashed and burned. Many expected Bezos to as well. Instead, he ushered in a whole new way of selling to the public.

What have been the knock-on effects in Ireland?

"Amazon changed everything," Superquinn founder Feargal Quinn says. "They started off selling a product -- books -- that was especially suitable in the internet's early days. They're easily transported, non-perishable and aren't bound up with size and feel issues in the way clothes are, for instance. But once books proved a success, Amazon could branch out very successfully into other areas because Amazon had gained the trust of the consumer.

"And it's been very interesting to see how the company has led the way in e-books. The Kindle has proved to be a big hit, although I will always prefer the traditional form."

Quinn shops for books occasionally and has looked with interest at how the main street has reacted to the growth of online retailing. "They're being killed on pricing, but many retailers don't help themselves. Bookshops, for instance, need to offer added value -- such as coffee shops and later opening hours -- in order to lure the customer in. Although they may not have an online presence themselves, retailers simply cannot ignore changing consumer habits."

Aisling McDermott, an award-winning beauty blogger and author of the forthcoming book, Gorgeous to Go, says online retailers like Amazon are thriving in a time of recession because consumers are far more conscious of value for money.

"We have to pay through the nose for cosmetics in this country so it's no wonder that people are flocking to the online sites," she says.

"You can get the same products for half the price. Once you buy off a reputable site -- and not those that sell fake versions of [popular cosmetics brands] MAC and Dermalogica -- you'll likely continue to shop for the same product online. The savings over a year can be substantial. Women will make sacrifices when it comes to other products, but they won't stop buying those affordable luxuries."

McDermott reckons the retail environment has been inexorably changed thanks to Amazon and such sites as Strawberry.net, her favourite beauty online retailer.

"The high street has had to up its game to compete. They really have to work hard to offer something the online people can't. In some cases, that's exclusivity. Brown Thomas are about to unveil the new Tom Ford line of cosmetics. They won't be available anywhere else in Ireland and they can't be bought from the big online retailers. High-end brands don't want to be seen to be discounted."

She says Amazon's legacy can be seen everywhere: "Look at Arnotts' website. It's one of the best of the home-grown online retailers. It's user-friendly in the way that Amazon is and it complements the long-established store, too."

Jeff Bezos, meanwhile, is unwilling to rest on his laurels.

It is rumoured that Amazon will introduce seven-inch and 10-inch tablets to rival the iPad in the autumn and at prices that are substantially cheaper than Apple's iconic product. And Bezos has hinted that any Amazon tablet would not replace the hugely popular Kindle, which is enjoying sales beyond expectations. The company is coy about the number of units shifted but it was reported that 5.4 million shipped last year alone.

With growth rampant, Amazon's 33,700 workforce is likely to increase yet further. Bezos has come a long way from those early days when he worked though the night to pack the hardback books for the company's first batch of customers in 1994.

Irish Independent

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