Mobile Banking - An Unneeded Luxury

          Companies have recently begun this new trend towards mobile banking, where we now can use our cell phones as a way to purchase items. I personally feel that this form of mobile banking is unnecessary in the United States and just another ploy to have consumer spending increase.  When paying for something it seems like nowadays consumers have too many easy options. Not only does the average consumer have more credit and debit cards than fingers, but every day in the mail we are getting these preapproved offers with deals that in the end only do more harm than good. I feel like mobile banking, although cool, has too many negatives to overcome the conveniences. What happens if you lose your phone? What’s the point of not taking your wallet if you still need a picture ID for approval? 

          However, I do feel like mobile banking will be extremely beneficial to people who do not have access to bank accounts or credit. In Haiti for example, mobile banking seems to be the only available form of banking for Haitians. Once the concept begins to develop not only will they be able to receive and sends funds via text messages, but they will be able to use their cell phones to purchase necessities such as utilities and food. In addition, this provides citizens for an alternative way of funding in the case of an emergency. After the earthquake devastated Haiti it was clear that the banks were inefficient and that Haiti needed an alternative financial service. As a result, mobile banking in Haiti was able to gain ground and generate millions. I feel that mobile banking will improve economies only in areas where mobile banking is a necessity rather than a luxury, but if you think I’m wrong please let me know why.

The Booming Business of Piracy

          In the past 5 years piracy has grown so much that it is not uncommon to the average consumer to illegally own non-authentic items. Whether it is movies, software, music, or textbooks, if its overpriced then chances are somewhere (somehow) there is an easily down-loadable pirated copy available. So why hasn’t legislation done something to control this? Simple answer. They can’t. If they could have they would have – or at minimum they would have taxed it. The beauty and curse of the internet is the ability for anyone to be able to upload whatever they want. To control what people do online would be VIRTUAL-ly impossible (hehehe). 

Congress Efforts

          Legislation does make efforts to control online piracy with the latest being a government grant given to universities that educate and implement programs that deter illegal downloading. Although I see no incentive or alternative given to people who illegally download on campus, I’ll bite and think it’ll work. However, I think the main problem is how are online users going to be controlled while at home? What about foreign websites? How can they be effectively controlled - without the US appearing to police the online world? The recent bill they voted on is an attempt to control these rogue websites that make pirated goods available; however, there is strong national and international criticism and although I like to consider myself a law abiding citizen I disagree with this bill. Not only do I think this would be impossible to implement, but I also feel that the government has no right to blacklist websites and control what the American people want to see. What would then stop them from taking additional steps, controlling more and more. 

          Yes, I understand it is illegal and how companies and people should get paid for their services, but I also know that these artists do benefit from having their work being transferred from computer to computer. I like to think of it in terms of economies of scale: $9.99 to buy a CD, $1.00 to buy just one song, $9.99/month for unlimited downloads to a small percentage of guilty conscience users, $0.00 to millions of online users, where the artist just benefits from the promotion. 

          Whether wrong or right, I see online piracy as an unstoppable force that you can’t stop, you can only hope to contain.

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          Ever since the dawn of the internet advertisers have taken themselves to a new level. Although sometimes convenient that they will offer products to your liking, it is never fun to have to delete hundreds of timeshare emails just because you clicked on a weekend getaway advertisement. I understand that on one side of the coin advertisers look to increase sales by offering the consumer what they think they want; however, by doing this consumers are not given a fair chance to freely decide for themselves. It seems like nowadays online marketplaces will either recommend a product or show similar products based on past customer purchases.  So where do we draw the line?

Reasonably speaking, a reasonable line has recently been drawn. According to a Federal Trade Commission (FTC) preliminary report there are three primary recommendations:

(1) Privacy by design      

(2) Simplified choice for consumers on how their data is handled

(3) Greater transparency for consumers on privacy practices

So what does this mean and how is it enforced?

          Simply put it asks website administers and advertisers to provide us with more security when dealing with our personal data and offer us a simpler overview of the privacy agreements we always agree to but never read.  However, there are no recommendations on how to enforce these regulations. The main purpose of the FTC is to prevent fraudulent and unfair business practices, but if they do not enforce their new recommendations all it will create is a false sense of security. 

          I think although this is still a legally pointless step, it is still a step in the right direction. There is the coming trend of security and privacy above all, that future advertisers will soon have to adjust to. With the plethora of information available online, consumers should have the ability to search for their own products and not be manipulated. I think providing the option to either track or not track recent purchases will give consumers an advantage in the never ending war between advertising spending and consumer buying. Hopefully this will begin a trend worldwide.

Groupon - Deal or No Deal?

          Nowadays, it seems like every couple of months there is a new company with an “innovative” idea having sales in the millions. This time it looks like Groupon.com is the website to join, if you want the latest deal. Similar to past e-commerce businesses, Groupon.com is able to broker great deals from local companies in your area. Unfortunately, I feel that Groupon.com will face the same issues that led to the demise of many past companies.  How will Groupon be able to sustain their competitive advantage? What makes this website so different from past, current, and future deal making websites?

          The Groupon Approach would seem to work best when companies sell an item that is overstocked rather than a service. Groupon.com offers discounted deals if a certain number of items are sold, but who is it really good for: the buyer, the seller, or just Groupon? 

 

          As a consumer we know about all the advantages and conveniences of the internet. In fact, we’ve all had that tremendous feeling of purchasing a $200 book online for just $75, along with purchasing that $25 item for no reason just because it was a deal.  I still remember buying 100 acres on Mars just because it was $0.99 – I’m looking to hit oil. It’s like being introduce to the online crack we call eBay for the first time. Eventually buyers will realize that they do not need helicopter lessons, unlimited carnival rides, or the 4 week massage package just because it is a good deal. As for the seller – do they truly benefit? It is important to attract customers, but when the profit margin is so small – is it worth it? In fact, according to a blog post on TechCrunch, a recent spa salon sold 4,000 massages valid for a year. On the outside this looks great, but when these $100 massages are only netting $25 (not including spa costs), the company must take a step back and think can we handle 15, $25 massages on a daily basis? In addition, once a customer purchases an item heavily discounted they’ll continue to look for similar prices. Although Groupon helps generate new customers, it does not generate the repeating customers that companies expect. Low profit margin and price sensitive, non-repeating, customers are some of the issues that led to the demise of similar companies such as Restaurant.com. Businesses must decide which individual items would provide the best profits as there are many positive and negative examples.   

          To distinguish themselves and make this company viable long term they need to make better offers to both the buyer and seller. Have multiple offers that appeal to everyone. Most buyers will only log on once a week and when they do, helicopter lessons are probably not on their list of things to buy. In addition, sooner or later an online company will come across and offer businesses not only a better percentage fee than 50%, but also a way to generate and retain new customers. This can be done a variety of ways – the best would probably be through a promotion package that offers not just one item but various items available year long.

          If sold to Google, Groupon.com will have to find a way to successfully manage the influx of customers and make the savings and profits appealing to both buyer and seller.