- Published: October 14, 2013
For the last few years, we have discussed how the Christmas holiday shopping season is starting earlier and earlier. In 2011, we noted how Wal-Mart was the first out of the gate to open on Thursday by swinging its doors open at 10pm on Thanksgiving night. Last year, Wal-Mart again led the way by dropping the opening time by 2 hours to 8pm.
As we also noted last year, Wal-Mart’s early start was not going unnoticed by other retailers: “The move is certainly not going to sit well with their competitors so look for other stores to match Wal-Mart’s earlier time.” And that is exactly what is happening. Today Macy’s announced that this year they will be opening at 8pm, just a few hours after its famous Thanksgiving Day parade ends. They are obviously not alone. Nearly all leading retail stores will open as soon as people have finished their turkey dinner.
While some consumers may be happy (as the early opening not only allows them to find bargains but may enable them to burn off some calories from their big dinner!), store employees are probably not supporting this decision. But their dislike of early openings may not go far. In fact, we will predict that next year stores will open even earlier.
- Published: October 11, 2013
A couple of days ago we discussed a National Public Radio story about the beer industry, so to continue the trend of looking at marketing issues in the alcoholic beverage world, we turn our attention to another NPR story this time focusing on the wine business.
In this story we see how wine marketers develop their packaging to appeal to different target markets. As discussed, certain design features of a wine bottle are created with the specific purpose of subconsciously affecting buyers. At least that is what a Napa Valley brand designer suggests. For instance, for lower priced brands elements on the label, such as bright colors and sketched characters (e.g., animals, people), may be designed to give customers the impression the wine is fun and exciting. On the other hand, higher-end wines often carry labels that have a much simpler design that is presented in a way that indicates sophistication and status.
In addition to discussing labels, other design aspects are mentioned. The story also points out a few research studies that support the psychological effects of wine packaging.
- Published: October 9, 2013
As we note in our Setting Price: Part 1 tutorial, prestige pricing is a psychological pricing strategy where marketers intentionally sets price extremely high in comparison to competitive products. The idea is that such a high price will create the impression of high quality compared to other products.
If you wonder what that means and would like a clear example of prestige pricing, then this is your lucky day. According to this story from National Public Radio, an Oregon craft brewery is selling one of its beers for $2,000 a bottle! Of course, this is no ordinary beer. It is a special barleywine brew that has been sitting around for 19 years.
If you think the price is outrageous, the story also notes that several people stood in line for two hours to purchase a bottle. Of course, the publicity generated for the company behind this beer is another excellent reason to choose the prestige pricing model.
- Published: October 8, 2013
Online payment systems (OPS) are pretty boring to most online shoppers, who just want to be able to push a few buttons and enter a little bit of information and be done with a purchase. But from an Internet retailer’s perspective, OPS are an essential component of a successful operation. Since customers expect to get through their order without any issues, it is essential the final piece of that process, payment for their purchase, goes smoothly. If there are any problems with payment, customers are more likely to abandon their online shopping cart. Additionally, if problems occur with payment, customers are almost always going to blame the online retailer and not the company that provides the payment system.
The scale, importance and technical capabilities required for accepting online payments means that almost all online retailers must rely on another company to build and manage these systems. It is just too complicated and expensive for all but the largest companies to create their own payment systems. Because of the complexity, there are few players who offer OPS. The king is PayPal, which has been the leader for many years. They were not only among the first to offer the OPS option, the systems they designed have been extremely easy to use for both online sellers and online buyers.
It now looks like another player has entered the arena, and it will almost certainly give PayPal a run for its money (pun intended!). According to this USA Today story, Amazon is now strongly pushing it own online payment system giving online marketers an intriguing choice. The battle is now on and it will be fun to see what happens over the next few years.
- Published: October 7, 2013
It seems like the only company in the news in recent days is Twitter. Of course, the company's pending IPO is a key reason news organizations are devoting so much coverage, but there are several other issues that are leading to increased coverage. One issue has to do with some marketers not being sure whether the Twitter advertising model is going to work, at least as a leading advertising platform.
Another is how Nielsen is now using Twitter data as part of a new research tool. As discussed here, the Twitter TV Ratings are designed to measure the volume of tweets that can be attributed to a particular television program. It also measures followers who end up viewing someone's program-related tweet. It is felt the communication taking place will offer an indication of viewers' interest in a show.
It will be some time before the impact of this research tool is known. Certainly, it will provide networks yet another metric to show advertisers to convince them of the importance of a TV show. But, as with the Twitter advertising model, it remains to be seen whether advertisers will see significant value in this tool.