Archive for the 'new media' Category

Netflix starts to push its pricing higher

There were plenty of opinions last week at RetailWire on the subject of Netflix. The company announced that new members will need to pay 8.99 or 9.99 per month, but existing members will be “grandfathered” at the current rate of 7.99 for its streaming service. I took a contrarian point of view, because I feel this is a way for Netflix to test the limits of existing customers’ price resistance, too:

The price increase for new members is the “canary in the coal mine” for Netflix. They should be able to measure price resistance at 8.99 or 9.99 per month, in order to decide when and how fast to raise subscription rates on existing members. It’s only a matter of time.

It’s hard for Netflix to maintain pricing while committing to improving the product. Netflix needs to pay carriers like Comcast for higher speeds, it wants to develop more original programming, and it needs to make its movie catalog more competitive with Amazon and Apple. (Right now, the movie selection is awful.) The only realistic way to do this, and to maintain margins, is to raise prices in increments.

How do marketers reach Millennials?

The question in the headline was a recent topic at RetailWire. The issue is that “millennials” are driven more by word-of-mouth than by traditional advertising media. Conventional ways of shaping opinions (and affecting consumer behavior) may not work for marketers and retailers as this segment of the population grows in importance. Here’s my comment:

It’s become a cliche to describe Millennials as “tribal,” but there is some truth to it based on their consumer behavior patterns. The most obvious sign that word-of-mouth matters is the importance of social networking and review sites as tools to spread opinions to a broad audience. Some marketers have clearly done a better job than others — either using Facebook and Twitter as “new media” ad tools, or exploiting customer reviews on sites like Yelp and TripAdvisor.

Is “free WiFi” enough to engage consumers?

An article about Macy’s use of WiFi to track and engage customers was the starting point for a recent RetailWire panel discussion. (And the broader topic was covered on a RetailWire webinar earlier this year.) Here’s my opinion:

Offering free WiFi in retail stores is becoming as commonplace as offering it at your local Starbucks. The question is whether retailers use this as an engagement tool, not just as a convenience. Kohl’s is one example of a retailer who offers an instant “scratch-off” coupon on your smartphone when you log onto their Wi-Fi.

There are plenty of other examples of stores using Wi-Fi-enabled GPS to measure traffic patterns inside their stores. If a customer is concerned about privacy, he or she always has the option of not connecting…or perhaps not carrying a smartphone in the first place.

Does Best Buy belong in the tablet business?

From RetailWire, where the discussion centers around private-brand tablets (like Dynex or Insignia) at Best Buy. I think there’s a place for this kind of merchandising, even in the increasingly crowded marketplace for tablets:

To some degree, tablets are displacing not only desktops and laptops but also TV’s. It’s not news that consumers watch movies on tablets, but consumption of TV series and other cable content is growing rapidly. So Best Buy needs to get into the game, just as they carry a credible assortment of private-brand TV’s under the Dynex and Insignia labels. I agree with the assessment that $199 (not $250) is the magic price point — otherwise, why not buy a Kindle Fire or other branded tablet?

Netflix continues to stall

From RetailWire, a recent comment about Netflix — a company staking its future on video streaming but facing increasing (and more nimble) competition:

Netflix is the “big box store” of video streaming, and I would equate competitors like Apple and Amazon with “warehouse clubs” in the business of selling multiple categories. And Netflix continues to struggle with poor selection of movies and video compared to its bigger, more nimble competitors. If you want to catch up on season 1 of “Homeland,” good luck with Netflix — I am doing my viewing on Amazon Instant Video, and I’m sure they are glad to collect more revenue and data from me.

The Shopkick app: A way to combat showrooming?

Here’s a brief comment from a recent RetailWire discussion about Shopkick. This is a mobile app that encourages store visits with targeted offers. My thoughts:

For all the hand-wringing about showrooming, this is a perfect example of how to turn location-based smartphone technology to a retailer’s advantage. It’s noteworthy that Best Buy and Target (two of the biggest complainers about showrooming) are on board with Shopkick, along with Macy’s and other major retailers.

Shopkick’s challenge is to deal with the likely proliferation of competing apps aligned with other stores — it doesn’t need to turn into another Groupon.

Thoughts on Super Bowl ads (part 1)

The focus of a recent RetailWire discussion was Super Bowl TV ads…not the spots themselves (more on that later) but the idea of exposing them ahead of time online. I have no problem with it, given the huge cost of a 30-second spot and the desire to find a larger audience:

The trend toward online advertising creates more viral interest in watching the commercials during the game, not less. This sort of “sneak preview” seems to be drawing larger audiences to the Super Bowl, regardless of interest in the actual game or teams involved. Last year’s Super Bowl was the most-watched ever, and we can expect this year’s game to surpass it. If the goal is to expose advertising to a broader audience, more power to the online commercials.