Tag Archives: retail

Is Owning Music at an End?

When was the last time you purchased music? Not music streaming, but actually bought a physical product for money?

If you are like most consumers, it has probably been a long time since you purchased a CD. In the last decade, CD sales have fallen 80% – from 450 million units to 89 million units! Consider the lasting impact of the declining sales, not only on the record industry, but also in manufacturing. Many of today’s car companies (e.g., Tesla, Ford, Toyota) no longer even include a CD player in the car dashboard, and portable CD players are hard to find.

Even downloads of music have taken a big hit, decreasing 58% since the peak in 2012. Artists have also noted the trends; Bruce Springsteen released his latest box set exclusively on vinyl – no CD options. CDs are doing well in some markets though – in Japan, where streaming has not yet taken off, 72% of music sales were physical CDs. But look around U.S. retail stores – where are the CDs even stocked?

It’s not just streaming that has killed off the CD. Vinyl records have grown from less than a million units in 2007 to more than 14 million in 2017. Vinyl sales even hit a 25-year high last year and new vinyl record manufacturing is popping up to replace CD manufacturing.

Here are some numbers to note about music sales:

  • CD sales: 712 million units in 2001, to 88.6 million units in 2017.
  • Track downloads: 1.3 billion sold per year from 2011 – 2013; 555 million sold in 2017
  • Song streams: 118.1 billion in 2013; 618 billion in 2017
  • Vinyl: 990,000 units in 2007; 14.3 million units in 2017

How do you buy your music?

Group Activities and Discussion Questions:

  1. Discuss the stages in the product life cycle. What are the marketing objectives in each stage?
  2. Poll students: When did they last purchase music? What form was it in?
  3. Where did they last see CDs or vinyl music? What was the inventory level?
  4. Who has a CD player in their car?
  5. Divide students into teams. Have each team draw a product life cycle and place various products and services into each stage.
  6. Next, have students brainstorm on how to reposition or revise products/services to that they can move into an earlier stage of the life cycle.

Source: Knopper, S. (14 June, 2018). The end of owning music. Rolling Stone.

 

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Amazon’s Private Label Brands

 

Everyone wants a deal when shopping, particularly when shopping for basic products that are consumed frequently. That’s a good time to look at private label brands offered by different retailers. Unlike the big branded product (which are usually priced at a premium to consumers) store brands are sold only by that retailer and are priced lower. Private brands have a lower advertising costs; the advertising costs are minimum as the product is associated with the stronger brand name of the retailer.

Walmart, Target, Costco, Amazon, and other retailers all have popular store brands, sold exclusively by the retailer and at a lower price than national brands. One of Amazon’s big advantages though is its own data about how, and for what, its customers shop.

Amazon started into private label brands in 2009 with a number of products sold under the “AmazonBasics” brand. The company has steadily been expanded its offerings and has had good success. Case in point: The AmazonBasics battery line, priced nearly 30% lower than national big brands, now accounts for close to one-third of Amazon’s online battery sales.

Amazon has expanded its efforts and now has roughly 100 private label brands. As another incentive to shop the Amazon labels, certain of the products can only be purchased by Prime members.

A few Amazon brand examples:

  • Spotted Zebra – kids clothing
  • Good Brief – men’s underwear
  • Wag – dog food
  • Rivet – home furnishings
  • Lark & Ro – dresses
  • Goodthreads – clothing

Go ahead – do a generic product search and see what shows up. See if you prefer private brands.

Group Activities and Discussion Questions:

  1. Discuss the importance of branding in marketing, and the expense of branding.
  2. Discuss the advantages of private, store brands.
  3. Poll students: How many store brands can they name?
  4. Have students open laptops and phones. Go to Amazon.com and type “batteries.”
  5. What are the results? (Note sponsored content and advertising.)
  6. How should the private brands be marketed?

Source: Creswell, J. (23 June, 2018). How Amazon steers shoppers to its own products. New York Times.

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Your Smile Pays for Shopping

By now, nearly everyone has heard about Amazon Go stores where shoppers can skip the check-out lanes and are automatically charged for what they purchase. But, Amazon isn’t the only company that offers stores without cashiers. The latest entry is from Alibaba at its new Futuremart store in Hangzhou, China. The store sells a wide variety of Alibaba merchandise. Customers enter the store using a facial recognition app and scan a QR code with their Taobao, Tmall, or Alipap apps so they can shop.

But wait – it doesn’t end there! The store also uses a facial recognition program – a “Happy Go” happiness meter – to measure how happy the shopper is right now. A big smile can earn discounts!

Similar to Amazon Go, at Alibaba, when leaving, facial recognition and RFID technology recognize the shopper and the items being purchased. Alibaba and Amazon may be in the forefront of the new shopping technology, but others are close behind. Panasonic is also working on an automatic checkout using a walk-through RFID solution at a store in Japan.

Go ahead and walk-through the store – but don’t forget to smile big!

Group Activities and Discussion Questions:

  1. Poll students: Would they like to be able to shop without a cashier payment step? Why or why not?
  2. Discuss the new ways in which technology is impacting retailing, such as Amazon Go and Alibaba.
  3. Show Alibaba video: https://youtu.be/FGtRXi8eRKI
  4. Show Amazon Go video: https://youtu.be/NrmMk1Myrxc
  5. Show the Panasonic RFID video: https://youtu.be/VD_FJzio3wo
  6. Divide students into teams. Have each team reimagine the shopping experience using technology. What are their findings? Will consumers accept these innovations?

Source: Brandchannel.com. Alibaba test smile-and-pay facial recognition shopping.

 

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