Google announced last week on its blog that it will no longer be selling the Nexus One online, turning instead to brick and mortar locations.
Google VP of Engineering Andy Rubin said that direct-to-consumer sales have been lackluster. The company attributes the model’s poor performance to the inability to examine the phone before purchasing, a “must-have” for consumers, Google discovered.
Google now plans to follow the model that it uses in Europe, where the Nexus One is offered through various partners and preexisting retail models. Since users can currently purchase the Nexus One through T-Mobile, it is likely that Google will strengthen their relationship with the carrier to sell the phone in stores.
Once these retail pathways have been established, the Google web store will be repurposed to showcase premium Android handsets, and no further sales will be made.
The Icrontic viewpoint
Jacqueline DiOrio
Buying the phone directly from Google costs $529, which users must then combine with a two-year T-Mobile contract. Buying the phone through T-Mobile, meanwhile, subsidizes the upfront price to $199, with the rest paid over 24 months.
Simply, few people are aware that they are paying the full price of the phone, regardless of how it is purchased. They just balk at the high upfront price of the unsubsidized model.
Considering these factors, it isn’t surprising that online sales didn’t work.
Matt Jancaitis
Unfortunately, Google’s experiment failed for a couple reasons, and both of them are directly related to the human aspect.
When a consumer buys a phone, especially a $550 piece of hardware, they want to know what they’re getting is awesome before they get it. For most, that means touching and playing with the device. Can’t do that over the internet. . . yet.
So they run to a store to play with it, and what happens? They fall in love and buy it on the spot so they can take it home the same day. Why wait for shipping over the Internet? Google didn’t even offer an incentive for purchasing online, except for adding the extra burden of making sure your carrier could use it and you had your own account for it.
Secondarily, Google’s support model was painful, mostly because it was driven by the perspective of a software company, not a hardware company. When your software has some bugs, they’re usually not mission-critical. If your phone fails, that’s usually pretty important.
Google’s “email us your issue and we’ll get back to you” routine didn’t inspire anybody to buy from them. It also didn’t sway customers from the big comfort of buying from a store, rather than the Internet: if it breaks, you can go back to the store and swap it out. The best the Internet has to offer is a cross-shipped RMA.
Robert Hallock
American consumers aren’t ready to admit that their favorite phones cost in excess of $500. They are perfectly happy with paying the full cost of the phone amortized over the course of a two-year contract. The same is true of autos, appliances and furniture–we are the payment plan nation. Obfuscating the real price of a big-ticket item behind smaller monthly payments makes anything seem less expensive than it really is.
Put simply, Google’s direct-to-consumer model failed because laypeople don’t see the wisdom in spending big up front to save down the line. It’s a shame, but it’s the truth.
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