The High-Speed Trading Behind an Amazon Purchase
news.morningstar.com
news.morningstar.com
For all of this complexity, Amazon rarely has a significant price advantage versus most retail stores.
From a customer point of view, competitive categories have a flea market quality to them. For a company that is usually optimized for customer experience, this is a weird science experiment.
IMO, they should make price adjustments less fluid. Require merchants to get to the lowest price as soon as possible, and punish stupid resellers that throw up divergent high/low prices by forcing them to live with it.
I know anecdotally that non-techie people whom I associate with increasingly are wary about Amazon after getting scammed by fake phone accessories or gouged by Christmas toy prices.
When you consider that Amazon is moving into new categories where trust is critical, like food, this is going to hurt them. Every grocer peddles trust, "we're good neighbors", etc.
Sometimes we'd negotiate a deal with a publisher, and slash the price of a book to a point where no one involved in the transaction was making money, sometimes we and the publisher would be losing money... Without fail within an hour the list price of the content on Amazon would be exactly what we set.
Amazon were/are prepared to eat the loss: I suspect this is the case for all products that are sold by Amazon. It was a very effective strategy for them. My company went into administration after just 9 months.
Of course, that skips the costs of Amazon staffing and infrastructure, and I'm sure Amazon sells most items above cost (and potentially some below), but I took it as a good example of how the scale involved meant that few can compete with Amazon.
That's a very common tactic in retail. Amazon didn't invent it, even if they did lean on it heavily.
One thing I'll note is that there's up to a 15 minute delay before a price change takes effect.
Also, Amazon will often "suppress" the buy box if no sellers have a good price. You can still buy, but there's an extra step needed. "Other sellers", then add to cart.
I also don't understand how the supposedly fierce competition between sellers ends up yielding prices that are higher than offline stores. Seems the reporter missed the true story.
Apparently book sellers do this as well.
Brick and mortar retailers can use radio-controlled e-ink shelf price tags for minute by minute price changes.[1] This hasn't really caught on yet, but the technology is ready.
You essentially either need a power drop to each section of shelving, or you have to replace batteries on every sign through your store every X months or years.
[1] http://www.lebensmittelzeitung.net/storechecks/Neues-Real-Ko... (e.g. pics 9, 20-24).
You can see the labels available from Pricer, one of the big players in the space: http://www.pricer.com/en/Solutions/
France retailer Carrefour uses ESLs in all their stores, for every SKU. They use ESL's from Pricer who says Carrefour uses 12 million labels, deployed in 2004, and they are updated via in ceiling infrared transmitters. [1]
ESL's are also common in Germany. And in the USA some Whole Foods use them.
This random blog claims "The ESL market is estimated to grow from 186.5 million dollars to 399.6 million dollars by 2020" [2]
Ses-imagotag showcases some interesting applications of their tags including manufacturing [3] and office use.
Finally a list of companies in the space [4]
[0] https://en.wikipedia.org/wiki/Electronic_shelf_label
[1] http://www.pricer.com/en/PressRoom/Case-Studies/Electronic-S...
[2] http://www.retailintelligencelab.com/blog/2016/11/24/the-ris...
[3] http://www.ses-imagotag.com/en/benefits/
[4] https://iot-daily.com/2015/03/19/best-electronic-shelf-label...
Since the tags are networked with infrared, they can flash on command. For example when store employees are trying to find a particular product for stocking, or retrieving it for a delivery order (example safeway.com delivery).
How does that even work? You pick up the product and the price changes by the time you go pay for it? Who would like that?
How would they even have data to justify minute by minute?
I'm not. Parent said "minute by minute", that's why I asked. Overnight is what I was assuming too, until I read that comment. Couldn't tell if it was a joke or serious.
They squeeze the manufacturers or wholesalers for the best wholesale price.
With Amazon it's annoying - I have to keep items in the cart for a while to see how the price ends up. That's worth it for expensive electronics, but not groceries.
http://news.morningstar.com/all/dow-jones/us-markets/2017032...
So the answer is, morningstar has paid for this article.. and they've decided they can make it up using ads or other sources of revenue.
https://m.facebook.com/l.php?u=https%3A%2F%2Fwww.wsj.com%2Fa...
If you want a draggable bookmarklet that will bypass the paywall for all WSJ articles, go here:
It would be nice if HN would make a change to their link submission code so that it automatically changes WSJ URLs to use the Facebook redirect workaround, since they are the one major site that disabled the Google workaround. But until then we have to do it this way.
A grocery store with e-ink prices could raise the prices for bottled water instantly after a natural disaster.