Tag Archives: direct marketing

Netflix Launches Netflix.shop

Movies have long generated revenue from sales of merchandise related to the shows (think Disney). According to trade group Licensing International, sales of licensed products tied to shows was roughly $49 billion in the U.S. in 2019, and $128 billion globally. That’s a big number and one that has attracted Netflix to enter the market with its own merchandise line and shop.

Not content to have us all streaming entertainment constantly, Netflix now wants us to shop on its platform, too. Netflix has launched an online store with items that are highlighted in its shows. While Netflix holds a dominant lead in streaming, it also needs to have new sources of revenue in order to expand. Competitors such as Hulu and HBO Max charge streaming fees, but they also show commercials to generate additional revenue. Netflix does not have that revenue stream.

The new online store will sell apparel, merchandise, and collectibles from favorite shows such as “Stranger Things,” “Lupin,” and other shows. Limited edition street wear and action figures based on “Yasuke” and “Eden” (anime series) are now available. Lupin merchandise includes baseball caps, shirts, hoodies, throw pillow, and even a side table. All of the Lupin products were designed and produced in cooperation with the Louvre Museum. Future products will be based on popular series including “The Witcher” and “Stranger Things” along with Netflix logo apparel.

This isn’t Netflix’s first foray off screen. It has previously created video games based on popular shows and has agreements with department stores to sell products as well.

What will you buy?

Group Activities and Discussion Questions:

  1. Poll students: What movies and shows can they list that have licensed products for sale?
  2. Have they purchased items related to these shows?
  3. Show Netflix’s new store: https://www.netflix.shop/
  4. Discuss the various promotional tactics that can be used for marketing a product. Have students come up with tactics and list all the tactics on the white board (ex: billboards, print, direct mail, etc.).
  5. Divide students into teams. Have each team outline a marketing plan for Netflix.shop and have each team select three different tactics. For each tactic, explain why it was selected and how it will be used.
  6. How can this plan be expanded to new geographies outside the U.S.?

Source:  New York Times; Reuters; 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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Direct-to-Consumer Air Conditioner

It’s summer (finally)! People are leaving their houses and enjoying the warmer weather. Well, not everyone enjoys summer heat – many older apartments and houses lack central air conditioning and depend either on fans or in-window air conditioners. While many home technology devices are sleek looking and high-tech, the lowly room air conditioner has remained unchanged for decades, retaining its distinct lack of style.

July air conditioners aims to change that. The new direct-to-consumer (DTC) brand takes a fresh look at the design of in-window units and is positioning itself as a design item in addition to being an effective appliance. It’s struck a nerve with consumers; within the first five days of announcing a wait list for the product, there were more than 3,000 people waiting in (virtual) line. Early ordering also lowers the cost of the units by 25% and guarantees a summer delivery.

There are two units of power: 6,000 BTUs (cools up to 250 sq. ft.) is $349 and 8,000 BTUs (cools up to 350 sq. ft.) is $399. The unit is square, sleek and uses a simple installation process. The customer first inserts a frame to lock in the window, then slides in the unit until it clicks into place. The front of the unit is a solid panel that comes in white, light blue, gray, and ash wood that consumers can switch out and customize to match their decor. July can be controlled via WiFi and scheduled to turn on at a desired time as well as controlled with voice commands.

Ready for summer?

Group Activities and Discussion Questions:

  1. Discuss the importance of clearly defining a target market.
  2. Show July: https://july.ac/
  3. For the July Air Conditioner product, who is the target market?
  4. Divide students into teams and have each team develop a profile of a target market for July. Include demographics, psychographics, behaviors, values, attitudes, etc.
  5. Based on the target market profile, what makes this product unique for these customers?
  6. July is a DTC brand – meaning it is not sold in stores. What are the considerations for this brand as it works to reach prospective customers?
  7. How is July positioning its products compared to the standard in-window air conditioners?

Source: Ad Week; Fast Company; Gear Patrol

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