Tag Archives: distribution

Tesla Shifts Retail Strategy, Then Shifts Again

Tesla, Tesla, Tesla… It’s so much fun to track this company. Not only are the products innovative and exciting to follow, it is also a marketing case study in nearly constant motion.

Case in point: At the end of February the company announced it would be closing its retail stores in order to cut costs and lower the pricing of the Model 3 to make it more affordable (at a starting price of $35,000). Tesla believes that car buyers will increasingly rely on on-line ordering instead of physical stores. Tesla stated that in North America, a customer can buy a Tesla on their phone in approximately a minute. Which begs the question, just because customers can do this, will they do it?

However, two weeks later, Tesla reversed its strategy and stated it would instead keep most of its 378 retail stores and would instead raise prices of cars by 3%, excluding the Model 3 cars. Tesla hoped to cut costs by closing stores, but landlords, customers, car dealers, and lawmakers protested the closings. The stores will still function as a showroom and location for test-drives, but sales will still be done online.

Where do you want to stop for your next car?

Group Activities and Discussion Questions:

  1. Discuss the distribution model used by Tesla and compare it to the distribution model used by other automotive manufacturers.
  2. Here is an interesting video on why Tesla cars cost so much: https://www.wsj.com/video/the-secret-to-why-a-tesla-costs-so-much-hint-batteries/65F3A21D-0837-4DA6-B739-612124815603.html (Hint – it’s the batteries.)
  3. Poll students: How many would buy a car online instead of at a dealer/store?
  4. What are advantages and disadvantages of buying cars online only?
  5. Why has Tesla disrupted the traditional automotive sales model?
  6. Will other automotive companies follow the Tesla model?

Source: Wall Street Journal, New York Times, Assoc. Press, other news sources

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Snack Robots are Invading Campuses

Robots are invading! Ok, maybe they aren’t exactly invading the entire nation, but they do seem to be infiltrating some college campuses. Rest easy though – these robots seek not to dominate, but instead to satisfy students’ craving for delivered snacks.

The self-driving robots are being tested for “last mile delivery” courtesy of PepsiCo, and have been deployed to serve students at the University of the Pacific’s campus in Stockton, Calif. The robots, developed by robotic company Robby Technologies, carry a variety of healthy snacks and drinks from Pepsi’s ‘Hello Goodness’ product line. Ordering and delivery on campus is easy using an app that is available to all students with a University of the Pacific email address. With a single charge, the robot can travel 20 miles to find a multitude of consumers eager for a quick snack.

The robots do have a normal work hour shift of 9-5 (sorry, no late night munchies) and deliver products to 50 areas around the campus. The robots are equipped with cameras and headlights so that they can navigate in rain and darkness. And, with six-wheels and all-wheel drive, curbs, rough paths, and steep hills can be handled with ease.

Students – are you hungry now?

Group Activities and Discussion Questions:

  1. Discuss the impact of robots and drones on marketing.
  2. Show a video of the Pepsi SnackBots: https://youtu.be/skUbYVmRogI
  3. More information can be found at Pepsi’s Website: https://www.pepsico.com/news/press-release/pepsicos-hello-goodness-snackbot-is-off-to-college01032019
  4. Information on the robots from Robby: https://robby.io
  5. Discuss how to build and use a SWOT analysis grid: strengths, weaknesses, opportunities, and threats (internal and external factors).
  6. Break students into teams and have each team build a SWOT analysis grid.
  7. Based on the analysis, what are the issues and risks that might occur?
  8. Debrief by building SWOT analysis grid on the white board.

Source: Ad Week, other news sources

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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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