WHAT WE LEARNED THIS WEEK: Keep moving with the times

Yesterday Franchise Entertainment Group, the company behind the Blockbuster and Video Ezy franchises, announced that it had bought RedRoomDVD, a company dedicate to building DVD rental kiosks.

It’s a big move for the company, which is already embarking on its own ambitious DVD plans. This is certain to cement its position as one of the bigger DVD kiosk providers in Australia.

But the move also represents a fundamental message for online business – the need to acknowledge where the market is heading.

The internet has changed virtually every industry, and DVD rentals are the same, with digital distribution on the horizon. But it’s not there yet, and FEG co-owner Paul Uniacke realises this. He also realises that there needs to be a stepping stone on the way there, leaving open a gap for a kiosk business.

It’s important to realise where your market is heading, but it’s also key to learn what are the steps it will take to get there – then realising how to capitalise on them.

Your hidden URLs aren’t hidden at all

Last week Telstra ran into a bit of trouble when it was discovered a database of user details was accessible online. Some of the information included names, addresses and other account information.

While the incident wasn’t as dire as some others that have occurred this year, it’s yet another reminder that businesses need to keep their databases on lock and key or risk being found out.

Security experts warn businesses all the time that just because companies think they haven’t allowed a URL to be indexed in Google, or because it hasn’t advertised a particular link to a web page, then users won’t find it.

Make no mistake – they will. Nothing is hidden on the internet.

If you have crucial information, don’t leave it out and about for everyone to see. Take some care and protect your data.

Stop the Facebook chain before it starts

The problem with digital scams is that not only are they a pain to deal with, but the nature of social media means they can suck people in faster than ever before.

JB Hi-Fi suffered this problem last week when a fake deal offering $200 gift vouchers presented itself online via Facebook. That’s an issue on its own, but the bigger problem was that due to the nature of social media, it started spreading extremely quickly.

Users are more likely to click on something if recommended by a friend, which was the case here. As a result, the scam spread, and the company soon found itself dealing with plenty of disappointed customers.

There’s a twofold lesson here. Firstly, make sure you keep on top of whoever’s scamming your company and if you’re under attack, make an announcement as soon as possible.

Secondly, you need to protect yourself. Make sure you’re not opening any suspicious links via Facebook, which could contain malware that could eventually infect your network.

Scams are spreading due to the holiday season, when hackers prey on the less informed. Be savvy this Christmas and stay away from scams.

Use the internet to diversify

JB Hi-Fi also made the news this week when it launched its music streaming service, one of the first major deals to be launched in Australia.

Streaming has mostly stayed out of the spotlight here, but newer entries from JB and Microsoft seem set to push the market forward and add a little bit of competition to iTunes.

Whether or not these products will be a success, kudos goes to JB for having the foresight in order to expand beyond its existing offering and move into the services business. It’s a strong company on its own, but it’s clearly shown an interesting in diversifying.

Whether or not it will be a success remains to be seen. But surely more companies would do well to think about how they can leverage the internet in order to provide services or products that aren’t usually on their radar.

Justify everything, or risk losing customers

The Productivity Commission finally delivered its report into the retail industry this week – and it’s a fascinating read. Although not much has changed since the interim report, there are plenty of key recommendations here that will keep the Government busy for awhile.

But one point contained in the report is fascinating. It says that many businesses are justifying higher costs due to expenses such as labour and shipping, which results in the higher prices customers are complaining about.

Usually, that would be okay. But the PC notes this isn’t necessarily persuasive when it comes to digital products such as software or apps, or even products like games. For these products, distribution is much cheaper.

Is your business offering a digital service? If so, are you able to justify higher costs compared to prices paid in the United States?

Apple recently brought its App Store into line, dropping prices to be more in tune with the US, after users were complaining that the differential was too hard to justify.

If you’re doing the same, then you need to stop and ask whether users are being turned off by those higher prices.

Don’t gouge a digital service just because you have the opportunity. Think about what your pricing for digital services says about your place in the market, and whether your brand is strong enough to justify that price.