Tag Archives: competition

Rent Furniture instead of Buying

Most college students likely have furniture that includes hand-me-downs from family and friends, or purchases from garage sales and Craig’s List. The sofa in their living room was probably once used by Aunt Helen in Kentucky, transported by Cousin Patrick to New York, sold to his friend Alan who moved to New Jersey, and who knows who else as it made its way around the country! And that is fine for young millennials who are just starting out. But eventually, their longing turns to new furniture that they view regularly on social media platforms such as Instagram and Pinterest.

But it’s hard to swallow that high-priced new furniture. New furniture buyers are likely shocked by the price for that brand-new West Elm sofa. How can they afford that thousand-dollar sofa when they have to pay student loans, car payments, rent, and everything else?

Enter: Services that let you rent furniture through a monthly membership, giving you the option to swap out furniture when tastes and trends change. For example, a popular West Elm sofa may cost $899 in stores, but it can be rented from Feather at $52/month (12-month subscription), and then swapped out, renewed, or returned. Individual pieces as well as full-rooms can be rented in certain cities. It’s a new way to live more upscale without having to pay out the entire fee at once.

Shall we redecorate?

Group Activities and Discussion Questions:

  1. Poll students. Where is their furniture from? Family, friends, neighbors, Craigs List?
  2. What would be their interest level to rent new furniture once they graduate and begin working? How much would they be willing to pay?
  3. Show furniture rental sites:

West Elm: https://www.renttherunway.com/westelm

Casa One: https://www.casaone.com/

Fernish: https://fernish.co/

Feather: https://www.livefeather.com/

  1. Divide students into teams. Have each team examine the information for a different furniture rental company.
  2. Discuss the importance of clearly defining a target market.
  3. Divide students into teams and have each team develop a profile of a target market. Include demographics, psychographics, behaviors, values, attitudes, etc.
  4. Based on the target market profile, what makes this service unique for these customers?
  5. Debrief the exercise.

Source: Carefoot, H. (25 April 2019). Can’t afford that West Elm sofa? Rent it instead. Washington Post.

 

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Sam’s Club Now Goes Cashier Free

Amazon isn’t the only company working on reinventing the retail experience. While the Amazon Go stores have captured consumers’ attention and shoppers at its cashier-less grocery stores, it’s not the only retailer interested in using technology to improve the customer shopping experience. Walmart recently announced that it is opening Sam’s Club Now, also cashier-less, in Dallas. The company describes its new store as a “technology lab that doubles as a live, retail club.” At 32,000 square feet it isn’t quite a compact store, but it is significantly smaller than the typical Sam’s Club store.

Similar to Amazon Go, in order to shop at Sam’s Club Now, members will need to use a Sam’s Club app that allows customers to scan UPC codes as they shop and check themselves out when done shopping. The app also includes smart shopping lists, in-store voice search and maps, augmented reality for new in-store experiences, and one-hour pickup.

Employees don’t go away – they instead shift to a new role called the Member Host. These associates are the face of the company and will use technology to help them serve Sam’s Club members better. Sam’s Club stated that the “future of retail is as much about people as it is about technology.”

If you’re in Dallas, check it out.

Group Activities and Discussion Questions:

  1. Discuss the use of innovation throughout retail.
  2. Review Sam’s Club Now announcement and video: https://corporate.samsclub.com/blog/2018/10/29/sams-club-now-reimagining-the-future-of-retail
  3. Compare this with Amazon Go: https://www.amazon.com/b?ie=UTF8&node=16008589011
  4. What are the similarities, and differences, between the two services?
  5. How should the two companies position against each other?

Source:  Advertising Age, New York Times, other news sources

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PepsiCo Buys SodaStream

The beverage market is in a fight to maintain – and grow – market share of soft drinks. And, as sales of soft drinks slow, the beverage industry has been looking for new paths. One recent deal concluded by Coca-Cola was to buy U.K.-based coffee company Costa, giving it entry into the hot drink market. And now PepsiCo has announced that it is buying do-it-yourself carbonation company SodaStream International.

Unlike sugary soft drinks, SodaStream has taken advantage of the growing market for seltzer beverages. Consumers like that seltzers do not have sugar and are calorie-free. This gives consumers drinks that are healthier than the traditional soda drinks. Plus, the do-it-yourself carbonated drinks can be tailored for individual tastes with different fruits and flavors added to the drinks.

According to Beverage Marketing Company, sales of seltzer has increased nearly 42% in the past five years, while soda consumption is at a 31-year low (according to Beverage Digest). SodaStream now has 12.5 million customers, up from 4.5 million in 2012, and sales have increased 31% this year. The product appeals to consumers who are looking for healthier, more environmentally friendly types of drinks.

The beverage war continues. What will happen next?

Group Activities and Discussion Questions:

  1. Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification.
  2. Show a brief video about the purchase: https://youtu.be/Idmv5onpbSs
  3. Have students view PepsiCo’s product assortment: https://www.pepsi.com
  4. Show SodaStream web site: https://sodastream.com/
  5. Which strategy is PepsiCo using by purchasing SodaStream?
  6. Divide students into teams. Have each team select one of the four different strategies and explain why that strategy could be used to market SodaStream.
  7. Have each team determine the marketing mix (4Ps) to support their strategy choice.
  8. Debrief the exercise.

Source:  Washington Post, New York Times, Fortune, CNBC, TIME, and other news outlets

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