Tag Archives: retail

New Shopping Records: Black Friday and Cyber Monday

If you are reading this, congratulations. It means you survived the busiest shopping days of the season: Black Friday and Cyber Monday. And, busy is an understatement. Shoppers took to the stores and online in masses, scoping up deals and getting started on holiday shopping for loved ones (and their selves).

The numbers are nearly as staggering. According to Adobe Analytics:

  • Shopping dollars from Nov. 1 – 26 totaled $58.52 billion
  • Black Friday accounted for a record-making $7.9 billion, including $6.22 billion spent online
  • Top products included Fingerlings, L.O.L. Surprise, Nintendo Switch, Laptops from Dell & Apple, LG TVs, drones, and Amazon Echo
  • Sales traffic vs. revenue by device type:
    • Desktop: 42% traffic for 61% of purchases
    • Smartphones: 49% of traffic for 30% of purchases
    • Tablets: 8% of traffic for 9% of purchases
  • Buy Online, Pickup In-Store (BOPIS) increased 50% from last year
  • Cyber Monday sales reached $7.9 billion, the largest single shopping day in the U.S.
  • Sales from smartphones also hit an all-time high of $2 billion

What did you buy?

Group Activities and Discussion Questions:

  1. Poll students about shopping over the Thanksgiving weekend.
  2. What did they buy? How much did they spend? Gifts or personal purchases?
  3. Did students shop in stores, online, or both?
  4. Purchase volumes by type?
  5. Review the data and charts from Adobe site: http://exploreadobe.com/retail-shopping-insights/
  6. Additional information CNBC Article and video: https://www.cnbc.com/2018/11/24/black-friday-pulled-in-a-record-6point22-billion-in-online-sales-adobe.html
  7. Other video: https://youtu.be/DDhk6O5TSN0
  8. Given the results from holiday shopping, what are three things that retailers must do to continue to meet customer needs?

Source: Adobe Analytics, CNBC, New York Times, Wall Street Journal, other news sources

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Psychological Pricing – Payless Becomes “Palessi”

Pricing is a complex topic – it is both strategic and tactical and is influenced by a variety of factors such as demand, costs, profits, and competition. But probably the most important part of pricing for marketers is its psychological impact. After all, there is a common phrase that “you get what you pay for.” But, is that always true?

Consider a recent experiment by Payless Shoes conducted in Santa Monica. Payless opened a shoe store named “Palessi” in a former Armani store and stocked the store with Payless’ low priced shoes and boots. The shoes, usually priced at $19.99 to $39.99 were examined by a group of influencers who were invited to a grand opening party and asked their opinion of the “designer” products.

The guests, who had no idea they were looking at low-cost Payless shoes, all praised the look, materials, and style of the shoes. That might not be so surprising, but what was astonishing was the amount that the guests were willing to pay for the shoes and boots. The top offer for shoes was $640 – a 1,800% markup!

What are you willing to pay?

Group Activities and Discussion Questions:

  1. Discuss the six steps for pricing: determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments.
  2. Discuss the importance of psychology in pricing.
  3. Show the Palessi videos: https://youtu.be/xpqqKRlqZfU and https://youtu.be/7YR2bovjfMU
  4. Payless Web site: https://www.payless.com/
  5. For Payless Shoes, divide students into groups and have each group work on any/all of the six steps.
  6. When setting the price level, assign each team a different model to use (demand-oriented, cost- oriented, etc.).
  7. Debrief the exercise. Compare the various pricing models and discuss advantages/disadvantages of each.

Source: Stanley, T. L. (28 November 2018). Payless opened a fake luxury store, ‘Palessi,’ to see how much people would pay for $20 shoes. Ad Week.

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The Worst Toys this Holiday Season

We all know that many new products will fail in the marketplace for one reason or another. Sometimes the quality is poor, or the packaging is wrong, or the price is too high. And sometimes a product fails because it can be dangerous.

Each year the non-profit organization World Against Toys Causing Harm (W.A.T.C.H.) compiles a list of the 10 “worst toys” of the year. Toys make the list when they present a hazard to children such as choking, cutting, or with one of this year’s toys, slashing.

Before crying out that “kids will be kids and anything can be dangerous,” consider that unsafe toys are a serious health issue. The numbers are scary. According to the Consumer Product Safety Commission there were roughly 240,000 toy-related injuries in the U.S. in 2016. This translates to one child treated for a toy-related injury in a U.S. emergency room every three minutes. And, between January 2017 and October 2018 there were an estimated 3.5 million units of toys recalled in the U.S. and Canada.

Some of the toys on this year’s list include:

  • Black Panther Slash Claw (slashing injuries)
  • Power Rangers Super Ninja Steel Superstar Blade (blunt force and eye injuries)
  • Stomp Rocket Ultra Rocket (eye, face, and other impact injuries)
  • Cabbage Patch Kids Dance Time Doll (choking injuries)

Detailed warning labels on packaging aren’t always enough. Young, small children in particular are vulnerable, plus not all warning labels are read and followed. View the list and read the concerns.

Group Activities and Discussion Questions:

  1. Discuss the topic of responsibility of a company to consumers.
  2. View the toys on the list: https://toysafety.org/
  3. Divide the students into teams. Have each team review one of the products on the list.
  4. For the product, how should the company address the issue that it is on the “worst toys” list? What should retailers do?
  5. Have students research how toys are tested.

Source: Marcelo, P. (13 November 2018). The “worst toys” for the holidays, according to safety group. Associated Press.

 

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