Lessons from the world of tablet retail
By Clinton Jones on Aug 31, 2011
There’s a shakeup going on in the world of retail and it is all around price, performance, features and support. I am talking specifically about the ongoing battle between Apple’s IPAD, the various Android tablets and HP’s Touchpad. I’d include the Windows ones in here but there are so few of them and the relative level of market penetration is so low, that they really are not much talked about at all.
The announcement a couple of weeks back by HP that they would discontinue the HP Touchpad resulted in what was termed a ‘fire-sale’ as the online HP store and other online retailers as well as bricks and mortar retailers slashed the price on the webOS tablet to around $99. Some industry analysts estimate that at that price, HP was likely losing $200 a unit.
For several days afterwards small caches of the devices were offered online by a variety of retailers, some of whom quickly oversold and had to embarrassingly cancel orders and send out letters of apology to hopeful buyers. In the world of contracts the cancelled orders of course are normal and buyers have little recourse but in terms of reputation, failure to fulfill ones promise online or on site can be more damaging.
Perhaps of most interest, is the fact that the sale of the Touchpad sparked a change in the pricing of new and used units online in the other avenues of commerce, namely EBay and Craigslist. I was interested to see that the price has more or less stabilized around $230 so a tidy profit of around $130 give or take for shipping for those who bought at $99 speculatively.
So what you may ask were the lessons? Well I will start with the concept of online stores. None of us likely has any major expectations around how accurate or precise the shopping cart technologies can be with respect to availability but it is interesting that EBay and Amazon support the idea of availability. It is surprising then when we find other online retailers that don’t support this notion and instead willingly accept all orders in the hope that they can fulfill them all. This is a lesson in understanding how seemingly similar businesses have differences in the processes that they have for something as straightforward as sales order placement and fulfillment.
The second lesson that comes to mind is the concept of market price for a given item. As mentioned already, tablet computers compete with one another on a number of fronts and the same is true for products like Winshuttle Transaction and the other products in the Studio suite. The pricing of Winshuttle products is based on a number of factors not least of those being the kind of license, the number of licenses and the particular function that a given person performs in relation to the products. In our annual surveys there are always a few respondents who tell us that if our products were cheaper they would buy more of them, that’s nice, and we’re getting up to quarter end so start negotiating with your sales representative! I am also always asked at trade shows, so what is the price of this awesome technology? and there isn’t really a straightforward answer for that either. I can talk about list price but that is relatively meaningless because you may work for a company that could have thousands of Runner licenses heavily discounted or your employer may have a household brand name that we really like and want as a particular reference. All things are negotiable is my answer.
Finally, fortunately we have no fulfillment issues with respect to product availability and have no need to check inventory levels when you download your software. There may sometimes be frustrations with the recording methods that you have to apply in order to automate a given transaction but then again, this is the world of SAP we are mostly talking about and sometimes we just have to be the angry birds try to penetrate the defenses of the armoured pigs using a number of different methods and techniques.
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