Author Archives: swhartley

Black Friday/Cyber Monday 2020

Since we wrote about November 11 – Singles Day in China, it seemed only fitting to next cover U.S. shopping over Black Friday and Cyber Monday. And, while the gross revenue sales in the U.S. fell well beneath the 2020 Singles Day record of more than $75 billion in purchases over an 11-day period, U.S. shopping still hit record levels of roughly $9.6 billion on Black Friday, an increase of 21.6% from 2019!

Black Friday shopping was followed by another strong shopping day tallying $10.6 billion on Cyber Monday. To many marketers, more interesting than the dollar amounts are the shifts in habit to online shopping. In particular, sales on mobile devices accounted for an estimated 40% of purchases for a total of $3.6 billion, an increase of 23% compared to last year. Mobile is where it’s at these days.

Some additional shopping highlights:

  • People spent an average of $312 on holiday purchases between Thanksgiving and Cyber Monday.
  • Americans spent 116.6 million hours shopping online.
  • Consumers spent $6.3 million per minute online.
  • Average spending per consumer online was $27.50.
  • Biggest categories were electronics, clothing, and toys.
  • In-store shopping on Black Friday declined 37% .
  • Online shopping on Black Friday increased 8%.

Consumer shopping habits are certainly changing. Now marketers have to keep up!

Group Activities and Discussion Questions:

  1. Discuss the changes in U.S. consumers’ shopping habits.
  2. What new shopping habits have the students formed?
  3. Where do they shop? Why? Online and in person?
  4. Show video about the changes in store for Black Friday shopping: https://www.wsj.com/video/the-end-of-the-mad-rush-how-2020-is-reshaping-black-friday/FD19834F-9701-46E9-A6D5-14A1AE2F9601.html
  5. Poll students about their shopping over Thanksgiving Week – Cyber Monday. How much was spent, which products were sought after, etc.?
  6. Divide students into teams.
  7. Considering the increasing use of shopping on smart phones, have students develop a marketing campaign specifically for mobile devices.

Source: AdWeek; CNBC; New York Times; Wall Street Journal; other news sources

 

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Digital Commerce Continues to Grow

More than any single factor, the pandemic has impacted virtually all industries, but it has most impacted how consumers shop. Prior to 2020, consumers may have shopped online for many different products and services, but since mid-2020 buying habits have changed significantly. Consumers now feel more comfortable buying what were once in-person purchases such as cars, food, and medical or health care needs.

A recent survey by McKinsey & Co. highlighted that since the pandemic began, three out of four people have tried new shopping and delivery methods. More than half of the consumers surveyed intend to continue to use curbside pickup or delivery services after the pandemic ends. Roughly 70% of those consumers intend to keep buying online. Among the changes are increases in online streaming, grocery delivery, restaurant curbside pickup and delivery, and store curbside pickup. Consumers are going online not just for shopping; they now go online for medical appointments, fitness classes, tutoring, and more.

While these changes are good for digital commerce providers, they are not so good for traditional brick-and-mortar retailers. This year will likely see a record of store closings, bankruptcies, and liquidations. And, retailers have had to shift how they deliver services, including more online experiences such as digital events, contactless payment methods, virtual online services, and curbside pickup.

Overall, ecommerce in the U.S. rose to 16.1% from 10.8% a year ago. New shopping habits also extend to a decline in cash and an increase in credit and debit card use.

To quote Bob Dylan, “the times they are a changing.”

Group Activities and Discussion Questions:

  1. As class begins, poll students about their shopping.
  2. What are the last three websites they visited? Did they buy anything? Why or why not?
  3. How have their shopping habits changed this year?
  4. Do they have new online shopping habits?
  5. Will they keep these new habits once the pandemic is contained?
  6. Show video about how pandemic has changed shopping habits: https://www.wsj.com/video/the-future-of-retail-how-will-the-pandemic-change-how-we-shop/526ADB88-F6D1-4B77-AA97-BAA323496D4D.html

Source:  Wall Street Journal

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How Much is it Worth? $1.9 million!

Determining the right price for a product or service is complicated. Marketers need to first determine the strategy that is best for meeting the objectives. Does the organization want to establish a beach-head and gain market share (at a low price), or does it want to reach the elite purchasers (at a higher price)?

Pricing strategies include demand-oriented, cost-oriented, profit-oriented, and competition-oriented approaches. Within these various approaches are price models that include skimming, penetration, luxury, bundling, price-lining, return-on-investment, and more. But finally, and perhaps most importantly, do not discount the strong appeal used with psychological pricing.

All these strategies are interesting, but how does one apply them to a unique product such as a champion racing pigeon? In many instances, the correct price is the price that someone will pay for the item. This is different than what the item might be worth in general – it is what the item is worth to that one particular buyer.

Take pets as an example. How much are people willing to pay for a pet? Or consider an animal that brings prestige, and perhaps even monetary gains, to a buyer – animals such as thoroughbred horses, or racing pigeons – that bring prestige and monetary gains to owners. What are they worth?

Recently, ‘New Kim’, a champion racing pigeon, recently fetched the amount of $1.9 million, breaking sales records for such a bird! Two bidders (operating under the names of ‘Super Duper’ and ‘Hitman’) drove up the purchase price to the record amount, surpassing the $1.6 million spent last year on another champion racing pigeon named ‘Armando’. The same Chinese owner is thought to have bought both pigeons.

How much are you willing to pay?

Group Activities and Discussion Questions:

  1. As class begins, poll students about pets and pricing. Ask who has a pet and how much they paid. Ask other students if they were going to buy an animal, how much would they consider spending?
  2. Show a video about the Belgian pigeon: https://youtu.be/kNmk5Jw5rbY
  3. Discuss pricing strategies (e.g., demand-oriented, cost-oriented, profit-oriented, competition-oriented, etc.).
  4. Divide students into teams. Have each team select a different price approach and determine a SMART objective for the approach.
  5. Next, have students use their selected price model to determine prices for the ordinary products (e.g., milk, gas, eggs, etc.), shopping products (such as clothing.), and luxury items (such as Louis Vuitton handbags), and rare (such as racing pigeons).

Source:  Associated Press; other news sources

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