Shop Like Jagger!

As consumers we are constantly bombarded with buy this, but that, huge clearance sale, 70% off, buy in the next 15 minutes and you will receive a second Chia Pet absolutely free, we will double your order if you act now and so on.  We see thousands of advertisements per day.  Think of all of that money being spent trying to get you to buy something you do not want or need.  And then we wonder why the cost of all products has continued to escalate even as the economy has suffered and our paychecks have continued to shrink.  OK, sing along time – words of wisdom from Mick Jagger:

When I’m drivin’ in my car
And that man comes on the radio
He’s tellin’ me more and more
About some useless information
Supposed to fire my imagination
I can’t get no, oh no no no
Hey hey hey, that’s what I say

I can’t get no satisfaction
I can’t get no satisfaction
‘Cause I try and I try and I try and I try
I can’t get no, I can’t get no

When I’m watchin’ my TV
And that man comes on to tell me
How white my shirts can be
But he can’t be a man ’cause he doesn’t smoke
The same cigarettes as me
I can’t get no, oh no no no
Hey hey hey, that’s what I say

Satisfaction – The Rolling Stones

Yesterday we focused on how the touch screen and mobile technologies have changed, providing us with more and more access to information.  This also has provided advertisers with more opportunity to present you with product shopping options.  Some retailers are doing some very cool stuff with changing the retail shopping experience. Here are just a couple of examples:

Home Plus, the Korean branch of Tesco, launched a series of virtual stores on subway platforms, enabling customers to make purchases using their smartphones while they wait for a train.  So how cool is this.  You are waiting for your train and you remember you need a few items at home.  You walk up to this virtual wall of products, use your smartphone and place your order.  The products are then delivered to your home at the scheduled time or maybe even ready for pick-up when you get off the train later that day – Sweet!

MyBestFit is a free service available in a number of US malls. Customers enter a whole-body scanner, before being advised which different brand sizes will fit them best.  Given how every manufacturers sizes seem to be different, this must be a real time saver for the clothes shopper.

A number of retailers are also using automated retail solutions such as Bose and Qantas.  These product dispensing kiosks are developed by Vigix, a venture backed company in Massachusetts.  These kiosks can be used to dispense products, samples, coupons, interactive and 3D media among other very interesting retail applications. (Disclaimer I have a working relationship with Vigix- the opportunities for highly differentiated interactive retailing are awesome)

Just a few of many ways touch screens and technology is and will be changing the way we shop.

Enjoy the weekend.

Webman

Advertisements

I Paid a 22.2% Sales Tax!

This holiday weekend, the Webman played Santa Claus for the family, just like many of you.  One of the stops was to the Verizon store for an early smartphone upgrade for one of my daughters. (And yes, she is using my upgrade yet again)  Anyway, the upgrade price for a iPhone 4, white, is $99 so I am feeling pretty good about this purchase.

And then it broke down.  First news from the Verizon representative, was that their was a $20 charge for an early upgrade.  Hmm, so they have their hand in my pocket here as it does not cost them anything to do this, but they need to subsidize some cost or just boost the revenue line a bit.  I like this as much as I like change fees on airlines – NOT ONE BIT.  But hey, I am still doing pretty well by getting a new iPhone for $119 right.  So feeling a bit screwed but can tolerate.

And then the bomb hit…  The Verizon representative tells me to slide my credit card and that the total bill was $154.31 including the sales tax.  Hmm, I am pretty good with numbers and quickly realize that I am getting charged more than 20% tax on this transaction.  Here is a picture of the credit card receipt:

Not good at all!

What the heck is going on here?  $34.31 for tax on a $119 purchase?  You have got to be kidding me.  So the Verizon representation calming talks about Taxachusetts (He has had to explain this before I presume) and about how they need to pay tax to the state not on the sales price but on the “Value” of the smartphone, which as you can see on the receipt is $549.  So I am paying the 6.25% tax rate on $549 and not on the $99.  So I choose not to shoot the messenger and do a little research myself.

Apparently this law is today only for cell phone because they come bundled with a plan.  Here is what I found on the State of Massachusetts Blog- http://revenue.blog.state.ma.us/blog/2011/04/new-directive-on-sales-tax-for-cellphone-bundled-transactions.html

“Starting July 1, 2011, D 11-2 announces rules amended in part because in the ensuing years since D 93-9 business models have changed. It may not be readily apparent to the retail customer who actually owns the cell phone store where they are making a purchase and which of the existing salestax rules would apply. The new Directive makes it clear that the tax must be calculated on the higher of the amount actually paid by the retail customer or the wholesale cost of the phone or other wireless communication device.”

“But it also provides — and this is new — that the vendor responsible for collecting and remitting the sales tax now has a choice. In situations where the wholesale cost of the phone or other device is used for calculating the tax (because it is higher than the amount paid by the customer), the seller may collect and remit tax from the customer on the wholesale cost. Alternatively, the vendor may elect to assume a portion of the tax by collecting only on the lesser amount actually paid by the customer, in which case the vendor must also remit tax on the difference between that lesser amount and the wholesale cost.  The seller may collect part or all of that tax from the retail customer.”

And there you have it.  A 22.2% tax on cellular phones in Massachusetts.  Be afraid, be very afraid of where this might lead.  You cannot make this stuff up.

Let me know what you think about this blog by commenting below.

Happy Holidays!

Webman