All Posts by Darrin Cramer

Amazon.com Price Check App Shakes Up Retail World

Amazon.com created a “Price Check” app for the iPhone and Android, which allows shoppers to scan the bar code of items they find in brick-and-mortar retail locations like Walmart and Best Buy in order to get 5% off on those same items on Amazon.com. Amazon.com does not pay for expensive retail space, or employ an army of clerks and cashiers, so their prices on popular items are often lower than the competition to begin with–the 5% discount will continue to drop the already low prices and could be more than some retailers are able to compete with.

The amount shoppers can save on any given item with the Price Check app is $5. Retailers and related associations across the United States are calling foul on Amazon, stating that the new Price Check app gives Amazon.com an unfair advantage and “steals” business from brick-and-mortar retailers; this in turn hurts the local state economies that those brick-and-mortar retailers operate in, because the California based Amazon.com is not required to collect state taxes on purchases made by residents of states that Amazon.com doesn’t have a physical presence in.

Recent reports by ComScore state that 26% of shoppers use their mobile phones to scan bar codes and compare prices online. Amazon.com is capitalizing on this trend by not only showing consumers that they have lower prices, but offering them an additional discount as well. Amazon.com is also able to collect massive amounts of data from their competitors using the bar codes consumers scan, which will presumably aid their marketing efforts in the future.

Apple to Open Store in Grand Central Station

Apple Inc. will let customers in to their newest Apple Store at Grand Central station tomorrow, where so far access has been restricted and a sign out front simply states: “arriving soon.”

Apple Inc. and the MTA have been extremely cautious about releasing any details about the new store in advance of its grand opening tomorrow morning. Reporters have likened finding information on the store to uncovering privileged state secrets. MTA spokeswoman Marjorie Anders told reporters that the MTA is not able to talk about the new Apple store at Grand Central because Apple wants the details to be kept secret.

Controversy Over Deal with MTA

In addition to all of the excitement Apple has stirred up by keeping the Grand Central Apple Store opening shrouded in secrecy, the company has drawn attention to themselves for the unusual deal they struck with the MTA. Apple will be the only store in New York’s Grand Central Station that does not pay the struggling MTA a portion of their revenue. Revenue sharing is not an uncommon practice for stores to engage in to get leases in locations with high foot traffic. Apple will pay $5 million to buy out the current lease that is held by a restaurant and has agreed not to make any major changes to the subway station’s historic features.

Apple Stores Helping to Grow Apple Inc.

The idea of the Apple Store came from Steve Jobs’ desire to control the way his products were showcased and demonstrated. The unique design of each Apple store, where products are purchased on the floor and inventory is kept in hidden staff-only back rooms, has proven highly successful for the company. Despite an ailing economy Apple has managed to continue growing their empire and now has 357 Apple stores across the world.

Nike Runs to Chinese Market

China’s burgeoning economy is no secret–the country has over 1,338,299,500 people and is a powerhouse on the world stage; while everyone else is in a recession, China’s economy continues to grow strong and at a faster rate than ever before. Nike sees promise in China’s growing economy and plans on expanding their presence in the country in order to capitalize on that growth.

In Q1 of 2011, Nike’s gross margin dropped by 2.7 percent, all the way down to 44.3; the drop of course, was due largely to the fact that the cost of materials went up during the global economic crisis that has characterized the last several years. Despite the drop in profit margins, Nike still pulled an impressive net income of $645 million due to an increase in demand of Nike products. Aggressive marketing tactics and competitive pricing options not only kept Nike alive during throughout the tough economic times, but actually helped grow their net income by 15%.

Nike expects to increase their presence in China, where demand for their products is growing steadily; the company says that 27% growth in the Chinese market is a likely figure. Nike will invest over $4 billion in new store locations and manufacturing by 2015–over 7,500 Nike stores currently operate in China.

Nike CFO and VP Don Blair says that one of the challenges the company has faced in their effort to secure more of the valuable Chinese marketplace is that Chinese people are “tuned in” to sports, but they “aren’t yet participants.” Nike will have to get the Chinese people more actively engaged in sports and sport culture in order to truly take hold of the market; they may be able to do this through endorsement deals with popular Chinese Olympic athletes such as tennis player Li Na and track performer Liu Xiang.

Nike Inc. (NYSE: NKE) went up $1 (1.05%) today, closing at $96.25.