Posted by: Paul.Christ
on Nov 02, 2009
Making Micro-Payment Models Work Online (E-Commerce Times)
Some may think that nearly any product can be sold over the Internet. But in reality low-priced products, and in particular low-priced physical goods, have generally not been a viable selling option particularly when purchased in small quantities. The problems tend to center on two key cost issues: 1) the fees retailers must pay to financial institutions for accepting credit cards (the main payment option for Internet purchases), and 2) the costs incurred when shipping physical goods. Both costs eat away at retailers' small profits on low-priced products, thus offering retailers little incentive to sell these. Low-priced services have fared better as shipping costs are often taken out of the equation (e.g., digital music) but the credit card fees still exists.
The problems surrounding purchases of small quantities of low-priced products is an important reason why many websites selling these products require accounts to be filled with a minimum amount of funding (e.g., Apple iTunes) before a purchase can be made or they have a setup that accumulates product purchases that are then included in a monthly billing system.
Micro-payments, variously defined as methods allowing for low-priced product purchases (anywhere from a few cents to a few dollars) have for many years been touted as a way to handle this. But so far it hasn't quite worked out though as discussed in this story it is not stopping companies from trying to figure it out.
Efforts in the past to address the costs of card processing of micro-payments by aggregating transactions into a single batch have not been successful. Other efforts to jury-rig credit cards for micro-payments include forcing the customer to purchase "credits" in round increments like $20. Pre-selling credits creates a stored value and closed-loop payment system, akin to the gift cards sold at grocery line checkout or in mass transit ticketing, where the funds may be used only with a single merchant.
Besides the cost of credit card fees and shipping, what other costs do retailers face who may consider selling low-priced products over the Internet?
Posted by: Paul.Christ
on Oct 27, 2009
Cookies Sound Sweet but They Can Be Risky (USA Today)
More than likely a large majority of people who browse the Internet know they are being watched or at least their computer is being watched . They know, for instance, that websites can follow where they go on a site, though users may not fully understand what type of information is being gathered. But while people know they are being monitored, few know what methods websites use to get their information. This story lays out one important way websites track users through the use of digital cookies. The story also offers ideas for protecting users when they visit sites using tracking information in ways that some may consider as being unethical.
Cookies track where you have gone online and are stored on your hard drive. The websites you visit tap into those cookies so they can tailor promotions to you or retrieve data such as your credit card information.
Most major sites have privacy statements discussing their use of cookies and other tracking methods but what percentage of visitors to a website, such as Amazon or Yahoo, ever read the privacy statement? Should these statements be more visible?
Posted by: Paul.Christ
on Oct 22, 2009
Marketers Salivating Over Smartphone Potential (USA Today)
We posted last week about how marketers are finally seeing the light when it comes to mobile commerce, well here is another story addressing the same issues. Except this story gets more specific on how users are shifting from computers to mobile devices for accessing social networks such as Facebook, Twitter and MySpace. While marketers may be salivating, there are still many questions remaining on the real potential these devices (and these social network sites) hold for generating revenue for marketers.
The number of people who use social networks from their smartphones skyrocketed 187%, to 18.3 million unique users, in July, compared with the same month a year earlier, says Nielsen. Social networking is among the fastest-growing activities on mobile devices, along with search and checking news, says Jon Stewart, Nielsen's research director for technology and search.
Up to this point social networks have not shown the ability to generate much revenue considering the number of people who access these sites through their computers. Will access through mobile devices change this?