Tag Archives: retail

Aira Service at Target Stores to Help Visually-Impaired Shoppers

At this busy holiday season, consider the (seemingly) simple task of shopping done by an able-bodied consumer. Now consider the same shopping task for someone who has a visual impairment. It must be a much more complex and time-consuming process, and is likely often frustrating waiting for assistance from store employees. After all, not everything can, or should, be done online. For many purchases, shoppers want to feel materials, sniff the freshness of produce, or have more information about the item.

Enter a service from technology company Aira and combine it with Target’s retail stores. Aira connects people who are blind or have impaired vision with highly-trained professionals who help provide visual information on demand via smartphones or wearable devices. The service blends wearables and smart phones with artificial intelligence and augmented reality. Aira’s mission is to make visual information accessible to anyone, anytime, and anywhere.

Target’s accessibility team worked with Aira to deploy a pilot program to 600 Target stores in 13 different markets. Shoppers in those areas can use Aira for free on a smart phone to receive on-demand information while shopping. Shoppers sign on with the Aira app and connect with customer service agents working remotely. The agents use the phone’s camera to guide shoppers through the store and describe items in detail.

The Aira service is also available at more than 40 airports and major public transit systems and college campuses. Not only can Aira agents provide direction and information, they can also read ingredients on boxes, understand color options, and have graphics described.

Now that’s progress.

Group Activities and Discussion Questions:

  1. Discuss the consumer buying process.
  2. While the buying process may vary slightly for different products and target markets, the basic 5-step process remains the same: problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior.
  3. How does the process change for visually-impaired consumers?
  4. Show information about Aira: https://aira.io/
  5. Videos are available on the Aira video channel: https://www.youtube.com/channel/UCvTWpoo6BVrn2pOFreWQGGw
  6. Information on how to use Aira at Target: https://aira.io/target
  7. How should the Aira services be marketed?

 

 

Source:  Kumar, K. (6 December 2019). Target offers free service for visually impaired shoppers at 600 stores for holidays. Minneapolis Star Tribune.

 

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Costco and Chicken

Pricing can be a confusing topic – and not just for marketers. Consumers can also be confused, but one thing they always recognize is when they get a good deal on a product. Such is the case for Costco’s $4.99 rotisserie chickens. At that price the product is less than poultry from competing grocers. So, how does Costco make a profit on the chickens? Well, the short answer is that the company does not make a profit on this item – in fact, it loses money every time one is sold.

The Kirkland Signature rotisserie chicken is probably one of the most popular items the company sells; last year Costco sold more than 90 million of the item. And, yes, it lost money on each and every bird. Estimates are that the loss amounts to between $30 million and $40 million each year. This is known in the industry as a “loss leader.” The reason for a loss leader product is to get consumers in the store in order to sell additional products at which the retailer does make a profit. The chickens are at the very back of the warehouses, meaning if consumers want the bird they have to navigate a tempting array of other low-cost foods and products. It’s tough to leave Costco with only a single item!

Costco is trying to get its costs lower by opening a $450 million poultry complex in Nebraska. In this case, the company will control the supply chain, starting from the grain the chickens eat to grow out and slaughter, eventually to the Costco’s kitchen, and finally to consumers’ homes. The new poultry complex will provide Costco with roughly 40% of the chickens it needs and reduce its purchasing costs. It will also provide a more standard-sized chicken of around six pounds to fit on its rotisserie line.

How much will Costco save with the new complex? Estimates are that savings will be around 35 cents per chicken. Not a lot in a single bird, but multiple it by 90 million and the savings will add up.

What’s for dinner?

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 various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  3. Discuss when companies should use loss-leader pricing.
  4. Show a video about Costco chicken: https://youtu.be/MSvCK_xH84s
  5. What strategy is Costco using to price its rotisserie chickens?
  6. For Costco chicken, divide students into groups and have each group work on any/all of the six steps.
  7. When setting the price level, assign each team a different model to use (demand-oriented, cost- oriented, etc.).
  8. Debrief the exercise. Compare the various pricing models and discuss advantages/disadvantages of each.

Source: Meyersohn, N. (11 October 2019). It’s only $4.99. but Costco’s rotisserie chicken comes at a huge price. CNN Business.

 

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Schick Buys Harry’s for $1.37 Billion

The shaving industry is cut-throat (no pun intended) with fierce rivalries between Schick, Gillette, Unilever, and P&G. A few years ago, Unilever bought Dollar Shave Club for more than $1 billion. The deal gave Unilever access to a new market of online consumers for men’s grooming products. Last year, Procter & Gamble bought Walker & Co. which markets Bevel, a shaving brand focused on black consumers.

Not to be left behind, Schick has now announced a similar type of deal, buying shaving company Harry’s for $1.37 billion. Harry’s has roughly 2.6% of the men’s shaving industry, with Schick at 10% and Dollar Shave Club at 8.5%.

Harry’s differs from Dollar Shave Club as it has retailers such as Target and Walmart stocking its products on their shelves in addition to online sales. Harry’s also launched Flamingo as a new women’s grooming brand.

Dollar Shave Club and Harry’s built a direct-to-consumer business model which has been enthusiastically embraced by shoppers. Prices are lower, and connections are more easily built between the brands and the shoppers.

Where do you buy shaving products?

Group Activities and Discussion Questions:

  1. Poll students: Where do they buy razors and grooming products? Approximately how much do they spend each month on these?
  2. Discuss competition: what are the direct competitors for this product? Indirect competitors?
  3. View Schick’s Web site: https://www.schick.com/
  4. View Harry’s Web site: https://www.harrys.com/en/us
  5. View Flamingo’s Web site: https://www.shopflamingo.com
  6. View Bevel’s Web site: https://getbevel.com/
  7. Divide students into teams. Have each team analyze the one of the shaving Web sites.
  8. What are the points of difference? Key messages? Target market?

Source: Associated Press. Schick owner buys Harry’s in new shaving war alliance. (9 May 2019).

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