Tag Archives: ecommerce

Why Buy Clothes? Rent Them Instead!

Do you have a tough time keeping up the latest fashions? Or, an even tougher time paying for the new designer clothes you covet? Despair no more. Instead of buying, try renting your clothes!

Renting clothes is a new way to spruce up wardrobes without breaking the bank. While there are a number of subscription-based services such as Rent the Runway, traditional retailers are also entering the new market, including options to rent clothes from Bloomingdales’, Banana Republic, Urban Outfitters, and more. Consumers are not limited to just renting clothing – some retailers rent shoes, jewelry, and handbags, too. And, lest you think this is just for women, a number of companies rent clothing and accessories to men as well.

The clothing rental industry, while still relatively new, is also quite large and still growing. According to research firm GlobalData, the clothing rental industry is roughly $1 billion today, and is projected to grow to $2.5 billion by 2023. Not too shabby (chic).

The sharing economy industry is still establishing itself for consumers who are not interested in owning, but still want access to new brands and services. After all, consumers already rent apartments, homes, cars, bikes, and furniture. Now we can add clothing to the list.

What will you wear?

Group Activities and Discussion Questions:

  1. Discuss the sharing economy. What is it; what drives it; what should we watch?
  2. Show a video overview of clothing rental: https://youtu.be/7OKLqBZoOYY

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Pricing in the Entertainment Streaming Industry

The entertainment streaming industry is on fire right now. Apple, Hulu, Netflix, Disney, HBO, and more brands are ramping up to fight it out for the monthly consumer subscription!

Here is how the current prices compare between services:

Service Monthly cost Shows
Netflix $12.99 Stranger Things
Hulu $11.99 (ad free), or

$5.99 (with ads)

Handmaid’s Tale
Amazon Prime Video $8.99 Marvelous Mrs. Maisel
Apple TV+ $4.99 The Morning Show
Disney+ $6.99 The Simpsons
HBO Max $14.99 Friends

 

Notice anything interesting in the prices? How each price ends? Which vendor is using penetration pricing? Or below-competition pricing? Name a price model and it’s probably on the list above. Blockbusters, as well as all-new created movies and shows are all offered from multiple services and it can be hard to determine which has which. The marketing focus should be on differentiation – the services are starting to sound alike, and be priced alike.

There has been a dramatic shift in recent years about how consumers get their information and entertainment, and how many more consumers use streaming services each year. The average consumer in 2019 has 2.6 stacked services. This is up from 1.6 stacked services in 2016, but far short of the projected 4.9 staked streaming services by 2023.

Think about it… how many services are currently in your household?

Group Activities and Discussion Questions:

  1. Poll students: How many subscription services does each household have today? Add them and average it for the class.
  2. Show a video about the topic: https://www.wsj.com/video/video-streaming-services-battle-for-subscribers/AED37E41-E1EC-447A-A47F-C55D1834B7E0.html
  3. Pricing is usually a complex topic. Discuss the six steps for pricing (determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments).
  4. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  5. For these streaming services, divide students into groups and have each group work on setting the price level.
  6. Assign each team a different model to use (demand-oriented, cost- oriented, profit-oriented, and competitor-oriented) and have the team explain how the model was used when setting their price.
  7. Compare the various pricing models and discuss advantages/disadvantages of each.

Source: FitzGerald, D., & Flint, J. (29 October 2019). AT&T lays out price, show line-up for HBO. Wall Street Journal; other news sources

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Designer Toothpaste Anyone?

Some products have become so ubiquitous in our lives that we seldom consider how they might be updated to reflect current trends. Consider products such as hand soap, detergent, and toothpaste. After all, when was the last time you truly examined your toothpaste and thought about design and innovation? And what exactly are the ingredients in toothpaste? Go ahead, read the ingredient list and you are likely to uncover it contains components such as triclosan and saccharin. (The FDA has banned triclosan for hand soap, but it is ok to put those ingredients in our mouths? Huh?)

Given how nearly every product seems to be undergoing a make-over, it just seems logical for toothpaste to get an update for today’s consumers. Packaging and ingredients can both be updated, as well as how and where consumers buy it. Today’s newer toothpastes take lessons from the beauty product world, where design and price points vary and make the products more appealing as well.

Of course, revisions may not come cheaply. French company Buly 1803 sells $29 toothpaste in artfully designed packaging and in flavors including orange-clove-cinnamon. Sephora carries a coconut oil dental floss ($8) and a Lush sells a charcoal, kaolin clay, and gunpowder tea tablet that is chewed before brushing. Twice, a brand from musician/artist Lenny Kravitz, has a two-pack of toothpaste (one for morning, another for evening) that sells at $17 for the pair with proceeds going to help Bahama communities.

Go ahead. Read the labels and make your choice.

Group Activities and Discussion Questions:

  1. Review key aspects of developing a product positioning map, including determining the axis labels for positioning.
  2. Show examples of new toothpaste:

 

Hello: https://www.hello-products.com/

Revolve: https://www.revolve.com/marvis/br/2677a2/?srcType=dp_des2

Sephora: https://www.sephora.com/product/cocofloss-P421244

Lush: https://www.lushusa.com/face/teeth/boom%21/04342.html?gclid=EAIaIQobChMI1-6V-LP33wIVA4vICh1cJAaeEAQYBSABEgIiFvD_BwE

Twice: https://www.smiletwice.com/

APA Beauty: https://apabeauty.com/apa-white-toothpaste.html

 

  1. Review toothpaste products. What other products are competitors?
  2. Divide students into teams and have each team develop a positioning map for one of the new companies.
  3. Have each team draw their map on the board.
  4. Debrief exercise.

 

 

Source: Shapiro, B. (4 April 2019). Is that chic toothpaste worth the price? New York Times.

 

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