Without a doubt, it can be stated that competing with gigantic smartphone brands such as Apple, Samsung, LG and HTC is tough. However, the startup Fairphone apparently saw a niche market for a new type of smartphone.
The introduction of the ‘smartphone’ was probably the last major change in the telephone industry. However, the working conditions and salaries in the manufacturing companies that produce those smartphones, have been heavily criticized. In 2014, an undercover BBC investigation discovered poor treatment of factory workers in Chinese factories that assemble iPhones, which confirms that Apple broke their promises to protect factory workers (Bilton, 2014). Even worse, in 2010, 14 factory workers under the age of 25 committed suicide at Apple’s biggest manufacturer, Foxconn (Moore, 2012).
Bas van Abel, the founder of Fairphone, believed there is a demand for a fairly produced or ‘fair trade’ smartphone. Therefore, he first started to raise awareness about ethical production of products and creating a ‘buzz’ around that idea. Fairphone’s goal was to establish collaborative, fair and transparent relationships with their manufacturers in order to ensure worker representation, safe working conditions and fair pay (Fairphone, 2015). In addition, they aimed to extend a smartphone’s longevity by improving the life span of the product and increasing repairability by making use of a modular design.
Moreover, millions of smartphones are thrown away every year, generating mountains of electronic waste (Reardon, 2012). Fairphone aimed to find a solution for this problem by by creating a simplistic modular design that allows users to repair their own phone by replacing the old parts with new parts, thereby reducing electronic waste.
With the above mentioned ideas in mind, they started developing the Fairphone, but instead of moving to investors or venture capitalists, they directly went to the end users, because they believed the phone should be funded by the public. In their Kickstarter campaign, they were looking for 5,000 people who were willing to pay 325 euros for a mid-range Android device, with no special specifications or industry changing features (Best, 2014). Therefore, the value proposition was the story behind the product, and they needed to fully leverage the social message behind the product in order to be successful. In their first campaign, they sold even more than 10,000 Fairphones upfront, indicating that the production could be started right away.
After the success of their first model, they launched the Fairphone 2 two weeks ago, on September 25. Compared to the first model, the Fairphone 2 has a better life span and it is even more fairly produced. In technical terms, the software got upgraded, the phone is equipped with a faster processor and a better screen resolution (Van Lier, 2015). However, the Fairphone two has a price tag of 525 euro, which is, looking at the hardware and the specifications, rather expensive (Verlaan, 2015).
For smartphone users that often drop their phone, the Fairphone might be a cheaper option, since all parts are easily replaceable. Also, the device has a considerably long life span, but I think consumers often wish to buy a new smartphone after 2 years.
To conclude, the most important ‘feature’ of this smartphone is that it is produced in a fair and ethical way. As the trend in the organic meat industry shows, more and more people care about how food and products are made. This is the probably the only reason why there is a demand for this product, because if you compare the Fairphone 2 with a smartphone that has equal specifications, you are very likely to find a cheaper option. So, the Fairphone 2 is expected to be successful in their niche market if they fully leverage the media attention and word-of-mouth effect that this product can bring, but they will not evolve into a real ‘competitor’ of Samsung or Apple.
Best, J. (2014). The gadget with a conscience: How Fairphone crowdfunded its way to an industry-changing smartphone [Blog post]. Retrieved from http://www.techrepublic.com/article/the-gadget-with-a-conscience-how-fairphone-crowdfunded-its-way-to-an-industry-changing-smartphone/Verlaan, D. (2015, July 14).
Bilton, R. (2014, December 18). Apple ‘failing to protect Chinese factory workers’. BBC. Retrieved from http://www.bbc.com/news/business-30532463.
Fairphone. (2015, October 09). Our roadmap to a fairer phone. Retrieved from https://www.fairphone.com/roadmap/
Moore, M. (2012, January 11). ‘Mass suicide’ protest at Apple manufacturer Foxconn factory. Telegraph. Retrieved from http://www.telegraph.co.uk/news/worldnews/asia/china/9006988/Mass-suicide-protest-at-Apple-manufacturer-Foxconn-factory.html
Reardon, S. (2012). Will we ever be able to buy a fair-trade smartphone?. New Scientist, 214(2860), 18.
Verlaan, D. (2015). FairPhone 2 Preview: aan de slag met de eerste modulaire smartphone [Blog post]. Retrieved from http://www.androidplanet.nl/reviews/fairphone-2-preview/
Do you often shop online? Well, I don’t because I am still hesitant to buy clothes, shoes or jewelry online. I rather shop in the city where I can see, feel and try on the products. When shopping online, there is a high chance that the clothes or shoes will not fit, or even that the clothes or shoes are not that beautiful when you receive them. However, I know enough people who regularly shop online and there are millions other people who do like online shopping. Because of this, the online shopping environment has been innovating and will continue doing this to attract even more consumers to this market.
However, there is a challenge for retailers to make online shopping a more enjoyable, effective and profitable. Like I mentioned earlier, the online shopping environment is different from traditional shopping because it is a virtual environment, where you cannot see or try on the garment in real life. Most consumers are hesitant to purchase garments online or are unsatisfied with their online shopping experience, which results into high return rates. The most important reason for this is because many online retail stores lack product information (Tokucin, 2013). Online retailers try their best and keep updating their tools to help consumers during their visit to make it more enjoyable for the consumers, and in turn profitable for the retailers. They even introduced a Virtual-Try-On. Virtual try-on applications have become popular because they allow users to watch themselves wearing different clothes. This helps users to make quick buying decisions and, thus, improves the sales efficiency of retailers (Hauswiesner et al, 2013: 1552). The purpose of a Virtual-Try-On is to serve consumers with better information that is similar to physical examination. As a result, the consumer will be more confident in their final purchasing decision and the probability of consumers returning clothing will decrease (Tokucin, 2013). .
They are also applying this tool in other branches, such as the watch market. They even developed an application for your smartphone to try on watches. By adjusting a so called Mode in Motion bracelet to your wrist and pointing the camera to it, you can see the watch appear on your wrist as in real.
What do you think of the concept Virtual-Try-On? Does it come close enough to reality, and if you did not like online shopping, are you convinced now to buy more products online if this tool is provided?
Hauswiesner, S., Straka, M. & Reitmayr, G. (2013) ‘Virtual Try-On through Image-Based Rendering’, IEEE Transactions On Visualization And Computer Graphics, 19, 9: pp. 1552
Tokuçin, H. (2013) ‘Virtual Try-On Technology’, 16 August 2013
Never before have humans been able to interact in such a manner with businesses as is offered online. The sheer magnitude of sales performed on the Internet is demonstrative of the way in which B2C e-commerce has become a cornerstone of modern day commerce. With 1.2 trillion dollars of B2C e-commerce sales in 2013 one can observe the rapid growth and scale of B2C e-commerce, thus, we decided to focus on two of the largest companies for our analysis, namely; Amazon and Facebook.
The Dash Button is the latest attempt of Amazon to facilitate the ordering process and make online spending an everyday occurrence. They allow for the replenishment of convenience products under the form of “one-touch” shopping. Some have aptly described the experience of using Dash Buttons as the “end of dashing to the supermarket” (Smith, 2015). The Dash Button was initially unveiled for 18 brands and cost $4.99 per unit, which is refunded once a purchase has been made via the button. The underlying mechanism behind the Dash Buttons relies on Wi-Fi pairing of customers’ Amazon accounts and the Buttons.
Unlike traditional personal assistant, such as Siri, which are fully technology based, Facebook M is partly Artificial Intelligence (AI) and partly human (Hempel, 2015). The concept is that by assisting the AI with a team of so called “M trainers”, which help it with dealing with unknown cases, “M” would be able to perform tasks based on its previous experiences in the long term (Hempel, 2015). Building on case-based reasoning and AI, the application has the potential to perform a wide array of tasks for Facebook users and is truly disruptive to the way consumers could purchase online. The way “M” is integrated into the Messenger interface is through a small Button which would allow users to text Messenger with their requests. Once complete, the user receives notification of fulfillment (Metz, 2015). The simplification of the purchase process is so tremendous that it has the potential to entirely disrupt how B2C e-commerce is conducted.
Amazon Dash and Facebook M both offer a reduction in time the consumer must take when making an order through a device. Yet, they differ in their approach as to how they provide a time-saving feature to customers. Both technologies are incredibly convenient with orders and reservations available from the touch of a button. Although Facebook M runs the risk of not being adopted seen as it might require users to disclose more amounts of personal information than already. Despite their potential to face resistance, one this is certain: they both have the potential to disrupt the e-commerce industry.
Hempel, 2015. Facebook launches M, its bold answer to Siri and Cortana. [Online] Available at: http://www.wired.com/2015/08/facebook-launches-m-new-kindvirtual-assistant/
Metz, C., 2015. Get a peek at someone using Facebook’s new assistan, M. [Online] Available at: http://www.wired.com/2015/09/get-peek-someone-usingfacebooks-new-assistant-m/
Smith, M., 2015. Hack Amazon’s Dash buttons to do things other than buying stuff. [Online] Available at: https://fresh.amazon.com/dash/
Tom Hendry – 366163th
Dennis Huisman – 369919dh
Micaela Arizpe – 368389ma
Theo Fromentin – 371049tf
Dylan Greenfield – 365747dg
Last Monday (14th of September) the beauty products start-up Ipsy of YouTube celebrity Michelle Phan raised about 100 million dollars.
Even though being an online celebrity with almost 8 million subscribers (Youtube, 2015) gives you a great edge in starting up a beauty company, it was not because of Michelle that they raised this dazzling amount of money. For a long time already, beauty and fashion startups are trying to create software that learns and anticipates on what people want to wear. Ipsy believes the future is super-intelligent software that knows your tastes so well it will send you products that you’re guaranteed to like. (CNET, 2015)
Customers are paying a monthly $10 subscription fee to receive a so-called ‘glam bag’ full of beauty products. The fun thing about Ipsy is that the content of the bag is customized for the individuals. Customers have to fill out a quiz with 12 personal questions (think of skin color, eye color, etc), after which software will analyze their answers and determine which beauty products they probably like. Customers can review their products online, which is taken into account for their next order. (Ipsy, 2015)
You may recognize this kind of business model, because Netflix did exactly the same in the movie industry, by offering recommendations based on what users liked to watch. I think we all know what kind of movement they have started. (CNET, 2015)
Ipsy is not the only company trying to use software to recommend products in the beauty industry. Competitor Birchbox is also shipping boxes of beauty products for a $10 monthly fee. The only thing that sets them apart except the boxes they arrive in. is the market they are aiming for. Birchbox is more aimed towards body/skincare and Ipsy is distributing make-up. (Brooke, 2015) With worldwide revenue for beauty care products expected to grow towards $461 billion in 2018, the market may be large enough for both.
Even though raising $100 million dollar and having three profitable years shows us that the algorithm they are using is getting pretty good, it is not fool proof yet. Problems range from products for the wrong skin color to inaccurate product descriptions. (Penninipede, 2013) Ipsy’s CEO says that there are still a lot of problems to work out: “That’s where the algorithm is not foolproof”. (CNET, 2015)
Author: Sven Sabel (354240ss)
When you wanted to buy a CD or a book a couple of years ago, the fastest way to get your new product was going to a shopping mall or the city center and buy it there from a bricks-and-mortar shop. With regard to the time passing betweeen your buying decision and holding the product in your hands, online retailers have still been at a disadvantage. This is changing now with advancing digitalization – especially in the books and music segment.
Nowadays, products in the form of downloads can be bought by and delivered to the end customer instantly; it merely takes seconds before, for example, an e-book appears on your kindle e-reader. But what about other, physical products? Do bricks-and-mortar shops still beat online retailers delivery time-wise? Currently, they certainly do – but for how long?
Exactly this issue just described has been on Amazon’s mind for a while now. After all, no company knows its customers better than Amazon does, so it should be possible to turn this into an important advantage, exploiting its possibility to gather big data on customers to render one of the last pro’s of bricks-and-mortar firms insignificant. Amazon’s answer to this problem has become manifest in a patent that they filed in December 2013; the solution seems to be “anticipatory shipping”. Anticipatory shipping means packaging and sending out a product before a customer even hits the “order now” button. More specifically, products are sent – in advance – to a warehouse in a region where Amazon expects an order according to their internal CRM system, thus optimizing the dispatch route. This way, Amazon wants to leverage its immense knowledge about its customers, so that in some cases where they could be very sure of a future order, they would already completely package a product and put a full address on the parcel before the order is fulfilled. When the order then reaches Amazon’s system, the parcel can be sent out directly and on the shortest possible route, making same-day delivery the norm rather than an exception.
According to Amazon, the technology already works well with very popular products, allowing people to receive items like a new iPhone on its release day. With Amazon’s possibilities to collect data however, it should be possible to extend this opportunity to less popular products. Order histories, product searches, wish list and shopping cart analyses, and even the time your cursor is directed to a certain product – it all helps to make you the ultimately transparent customer. Each click and each order helps to refine your profile and to anticipate your next order.
Until this point, it is not sure whether Amazon will exploit their patent and implement the idea of anticipatory shipping. But if they do, it might be possible that Amazon knows its customers – you – better than they know themselves. How long will it be until a mailman rings at our door before we even hit the order button?
United States Patent and Trademark Office:
Our Technology of the Week Project focused on B2C e-commerce. We have critically analyzed the e-commerce platforms Bol.com and FindTheBest.com (FTB). Nowadays, increasing consumer informedness has changed consumer’s buying behaviors and also has led companies to provide more products or services online to satisfy their customers. To influence buying decisions and willingness-to-pay, ‘pure’ online sale channels are no longer sufficient. Potential buyers are not only interested in viewing what people with similar preferences have bought but also what their experience with the product was. Furthermore, they expect personalized product suggestions based on their browsing history and discounts.
Bol.com is one of the largest online retailers in the Netherlands. On Bol.com customers can compare products, see reviews and ratings. It is also possible to buy second-hand goods there. Moreover, it uses ‘Plaza’, a platform to sell third-party products. It is a way to expand its offered product range by allowing competitors to sell their products on it. In addition, Bol.com earns a percentage and fixed amount from them.
FTB.com is more like a search engine. It allows product comparisons based on prices, smart rating and other product specifications. The biggest difference here is that it does not own the product but it will provide links from trustworthy and affiliated online shops to purchase the selected product. FTB.com goes beyond a traditional search engine and comparison engines. Besides aggregating the data from a wide variety of sources, it also offers a ‘smart rating’ system that combines the expert rating and its own quantitative rating systems based on attributes.
Both companies use big datasets to simplify and customized customer search results. Bol.com reviews are mostly made by consumers. On FTB, however, there are many analytic graphs and processed information to elaborate on the comparison of prices or product properties. In addition, FTB has launched a function that allows users with blogs to embed the exact product information from its page on their own blogs. This way of blog marketing causes a wider effect of word-of-mouth. As for trading down/out, Bol.com gives customers the option to search for the best discount offering, while FTB focuses on where to buy it, enabling stronger trading down from a customer perspective. Both company strategies support ‘trading out’ by helping customers to find products that perfectly fit their needs.
After analyzing Bol.com and FTB, we came to conclusion that they offer similar products but the means by which they try to achieve their goals are different, since the two business models highly differ. Bol.com is a sophisticated online retailer that owns the product and hence has a different risk level. However, FTB as a price comparison engine, aggregates big datasets and offers structured information to users and help them make the ‘best’ decisions.
Ahold, 2012. Press release: Ahold aquires leading online retailer Bol.com [online] Available at: <https://www.ahold.com/Media/Ahold-acquires-leading-online-retailer-bol.com.htm?channel=mobile> [Accessed 18 September 2014].
Ahold, 2014. Bol.com creates personal shop environment on the smartphone [online] Available at:<http://pers.bol.com/2014/09/bol-com-creeert-persoonlijke-winkelomgeving-op-smartphone/#more-2896> [Accessed 15 September 2014]
FindTheBest, 2014. FindTheBest.com. [online] Available at: <www.findthebest.com/get-to-know-us> [Accessed 16 September 2014].
FindTheBest, 2014. FindTheBest.com. [online] Available at: <http://www.findthebest.com/our-company> [Accessed 18 September 2014]
Goodwin, D., 2012. Organic vs. Paid Search Results: Organic Wins 94% of Time. [blog] Available at: <http://searchenginewatch.com/article/2200730/Organic-vs.-Paid-Search-Results-Organic-Wins-94-of-Time> [Accessed 17 September 2014].
Dear BIM bloggers,
We have all heard about the concept of F-Commerce by now, if not, you probably skipped last week’s lecture and should definitely start reading about it. The question is how can retailer profit from this new trend? Has it ever happened to you that you clicked on an advertisement on facebook and actually bought it? How well does this form of advertising work? These are all questions that are yet to be answered. In the lecture of Michael Zhang, he argued that Facebook’s business model is not good enough. They have all this information about millions of customers, but they don’t use it well enough. Facebook only generated a turnover of 860,901 euros in the Netherlands. How is this possible? Are there ways to improve their business model or ways to generate more turnover from advertisement in the form of F-commerce? Let me know how you think Facebook can start growing in the Netherlands!