Fingerlings: Too Much Monkey Business?

The New York Times: The Fingerling is “a five-inch monkey that grips your finger with its legs and arms, as it babbles, blows kisses and blinks its eyes. Cradle a Fingerling in your hand and it drifts off to sleep. Press the Fingerling’s head and it passes gas. Created by the Canadian company WowWee, the Fingerling has been anointed one of this year’s hot toys for the holidays, a designation that most toymakers only dream of achieving.”

“How the Fingerling reached this tipping point — when suddenly millions of children cannot do without a $15 farting monkey — is the story of a promising idea’s going viral on social media, a large retailer’s savvy pricing strategy and the science of managing scarcity … This past week, Fingerlings were out of stock on Walmart’s website, while parents complained that they had been snookered into buying counterfeits … WowWee says it did not intentionally create the shortage. But whether by design or happenstance, there is no question that scarcity fuels a toy’s mystique.”

“WowWee had originally planned on selling the Fingerling for $20, but the giant retailer was insistent: About $15 was the magic number … When Fingerlings hit stores across the United States in August, Maya Vallee-Wagner, 7, was overcome with emotion … Her father … shot a video of his daughter’s reaction in the toy aisle of a local Target and sent it to WowWee … (which) posted it on the company’s Facebook page, and it went viral … The video was a marketing coup, just as WowWee was launching its social media push — an effort that in many ways resembled the rollout of a Hollywood movie. Gone are the days when a toy company could simply blitz Saturday morning cartoons with ads.”

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Dyson Goes to School on Innovation & Shopping

The Wall Street Journal: “This fall, James Dyson launched the Dyson Institute of Engineering and Technology in Malmesbury, England, where his company is based. Students—there are currently 33, with plans to grow to around 200—are paid to work for the company three days a week. Two days a week they go to classes on Dyson’s corporate campus, in subjects such as electronics and mechanical engineering. (The company covers tuition.) Students work toward a bachelor of engineering degree from the University of Warwick, whose professors teach the classes.”

About innovation, Dyson comments: “You can’t ask your customers to tell you what to do next. They don’t know. That’s our job.”

Dyson also “is opening his company’s first stores in the U.S. One opened Nov. 30 in San Francisco and the second, on Manhattan’s Fifth Avenue, will open Dec. 14 … It’s ‘an odd thing to do when so many people are buying things online,’ Mr. Dyson says. ‘You might say it’s counterculture to go rent a very expensive premises on Fifth Avenue, but we’re doing it almost precisely because of that.’ Mr. Dyson says that he wants to use the space to demonstrate how his products work and to learn how consumers interact with them. ‘It’s very difficult online and certainly in a normal store to explain what we’re doing’.”

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Late & Great: Johnny Hallyday

“He was an idol, in other words, blasphemy incarnate. His death is that of a god who was in fact mortal. People say they can’t believe he is dead, simply because their belief in him, their faith in him, will not die. Many people never believed that Elvis died. The same will happen with Johnny.” – French philosopher Raphaël Enthoven on the phenomenon that was Johnny Hallyday (from The New York Times)

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Dollar General & Rural Retail: Ka-Ching!

The Wall Street Journal: “Dollar General is expanding because rural America is struggling. With its convenient locations for frugal shoppers, it has become one of the most profitable retailers in the U.S. and a lifeline for lower-income customers bypassed by other major chains.Dollar General Corp.’s 14,000 stores yielded more than double the profit of Macy’s Inc. on less revenue during its most recent fiscal year. And its $22 billion market value eclipses the largest U.S. grocery chain, Kroger Co., which has five times the revenue.”

“While many large retailers are closing locations, Dollar General executives said they planned to build thousands more stores, mostly in small communities that have otherwise shown few signs of the U.S. economic recovery … This lower-end market is better protected from Amazon and competitors that target wealthier shoppers.”

“For decades, Dollar General prices have been marked in 5-cent increments, making it easier for shoppers to estimate the total price of their purchases … Many popular brands are packaged in small quantities to keep prices under $10—generally yielding higher profits per item than bulk goods at such warehouse chains as Costco … The founders of Dollar General lived in small-town Kentucky and started the company there in 1955, making the store’s rural locations a natural fit. When Wal-Mart Stores Inc. grew past 3,000 stores in the early 2000s, a strategy surfaced: ‘We went where they ain’t,’ said David Perdue, Dollar General’s chief executive from 2003 to 2007.”

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‘Unboxing’ is the Holiday’s Hottest ‘Toy’

The Wall Street Journal: “Taking a cue from the YouTube phenomenon known as unboxing—viral videos in which people theatrically unpack hot new products— companies are churning out tiny charms, stickers and golf-ball-size critters, all tucked away inside layers of plastic. The mystery objects have become one of the hottest categories of toys this season.”

“Unboxing videos, also big with technology and fashion reviewers, have become a key way children learn about new toys, and their popularity has grown exponentially in recent years. A recent search for “toy unboxing” on YouTube, a unit of Alphabet Inc.’s Google, brought up more than 12 million results.”

“Australia-based Moose Toys, maker of the popular Shopkins grocery-store figurines, launched its Pikmi Pops in September. The toy, a plastic lollipop-shaped container, hides ‘mystery items’ such as stickers, lanyards and charms … Each of Spin Master Corp.’s Hatchimals Surprise, released in October, holds plush twin critters in a single egg that cracks open after being cuddled.”

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Social Media Buzz: Not Always Accurate

The New York Times: “On average, 19 percent of a brand’s sales — or between $7 trillion and $10 trillion in annual consumer spending in the United States — are driven by social conversations, both online and offline, according to a new study conducted by Engagement Labs, a Canadian company that analyzes conversations around brands. The study, which looked at 170 brands, found that companies often wrongly saw social media as an accurate and sufficient guide for tracking consumer sentiment. Often, though, that social conversation might be much different from what people are saying in private conversations with friends and family, the study said.”

Co-author Brad Fay comments: “The danger is you can make some pretty big mistakes if you assume the conversations happening online are also happening offline. Very often, they’re heading in different directions.”

“The most negative and most outrageous comments often get the most traction on social media. And sometimes, people post comments about a topic just to get a reaction or to reflect an ‘image’ or appear ‘cool’ to their social media followers, when their actual views may be the opposite.”

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Shopper Mobs: The Dark Side of ‘Black Friday’

The New York Times: “What turns ordinary shoppers into dangerous mobs? Social scientists and psychologists are trying to find out. Sharron Lennon, a professor in the merchandising program at Indiana University, became interested in studying consumer misbehavior after seeing news reports a few years back about fights breaking out at her local mall … Dr. Lennon speculates that feelings of unfairness drove many of these shoppers to behave the way they did. Shopping and the retail-consumer relationship, she said, is expected to be an equitable exchange of a good for payment. Any violation of the exchange can evoke strong feelings of inequality.”

“When a store failed to properly stock advertised ‘doorbusters,’ when sale prices weren’t honored, such as being denied an early bird discount at checkout even though they were in line before the sale expired, or when they failed to obtain an advertised item or failed to receive the discounts they anticipated, Black Friday shoppers were most likely to misbehave. In a follow-up study, Dr. Lennon … found that those who felt other customers were being ‘unpleasant’ were more likely to feel the store was being unfair — and were more likely to become uncivil themselves.”

“Perceptions of scarcity are also a driving factor in consumer misbehavior, said Bridget Nichols, an associate professor of marketing and sports business at Northern Kentucky University. When consumers feel a product is scarce, they value it more. And Black Friday is designed to offer limited amounts of products for a limited amount of time, thus heightening the sense of urgency, she said … Sharing the Black Friday ritual with friends and family can create a similar sense of tribal bonding, Dr. Nichols said, and reinforce bad behavior.”

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Black Friday Tricks of the Trade

The Wall Street Journal: “Instead of copying Amazon.com Inc.’s playbook, retailers such as Wal-Mart Stores Inc. and Target Corp. are coming up with new tricks to maximize sales ahead of Black Friday … In the months leading up to the holiday, Target has shifted away from ‘up and down’ pricing moves, streamlining the number of promotions to focus only on ‘impactful’ sales … The company has also reduced the phrases it uses for discounts from 28 last year to seven, dropping language like ‘weekly wow’ and ‘as advertised’ … It is also offering extra incentives to its loyalty card holders, such as early access to Black Friday promotions.”

“Wal-Mart, which has long emphasized an ‘everyday low price’ message, has been experimenting with a new online system, which at times results in higher prices online than in stores for goods that would otherwise be unprofitable to ship. Some product listings on its website now indicate an ‘online’ and ‘in the store’ price … The Bentonville, Ark., retailer said it would sell more exclusive products this holiday as compared with last year.”

“For the first time, Best Buy Co. offered hundreds of Black Friday deals on TVs and other devices in early November in hopes of driving sales before the competition heats up. The electronics giant has a price-matching guarantee, but the offer doesn’t apply to items on sale Thanksgiving through Monday.”

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Real-Time Retail: Fanatics Seizes Micro-Moments

The New York Times: Micro-moments “happen all the time in sports: A player reaches a milestone, has a breakout performance or is traded to a new team. Apparel companies have traditionally been poorly positioned to meet the accompanying fan demand as it surges. Fanatics … a sports merchandise company … is changing that and, in the process, carving out a lucrative niche in a fiercely competitive online-retail industry largely dominated by Amazon.”

“The company is similar to fast-fashion retailers like H&M, Uniqlo and Zara, integrating design and manufacturing with distribution to fulfill orders within hours. After the Chicago Cubs won the World Series last year, Fanatics used Uber to deliver championship gear to some fans within minutes … As a result, Fanatics has more than doubled its revenue in just a few years.”

“Among the micro-moments that highlighted the new need for speed was Jeremy Lin’s emergence as a sudden star for the New York Knicks in 2012 amid the so-called Linsanity phenomenon.” Fanatics chairman Michael Rubin comments: “When Linsanity happened, within 12 hours to 24 hours, there were no jerseys to get. So you had this huge demand, and there’s no jerseys available. Then you order them like crazy, and by the time they get in, the moment’s over.”

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What The Nutella?

The Washington Post: “Nutella confirmed on its Twitter feed that the recipe ‘underwent a fine-tuning’ after Germany’s Hamburg Consumer Protection Center said on Facebook that it appeared the recipe had changed. That set off both panic and anger on social media in a symphony of languages — English, German and Italian chief among them … Ferrero, the Italian company that makes Nutella, Tic Tacs and Ferrero Rocher chocolates, insisted that ‘the quality . . . and all other aspects of Nutella remain the same,’ in a statement obtained by the BBC.”

“The changes are to its milk and sugar content. The new recipe has 8.7 percent powdered skim milk, instead of 7.5 percent. It also contains 56.3 percent sugar, instead of the previous 55.9 percent, the Hamburg Consumer Protection Center said, according to Deutsche Welle.”

“The outcry is slightly ironic when considering the candy’s history. Nutella was created by an altered recipe for a chocolate spread. It was invented by Italian chef Pietro Ferrero after World War II out of necessity, according to the BBC. Cocoa was hard to come by in postwar Italy. In an attempt to make a chocolate paste without much chocolate, he decided to stretch a little bit of cocoa a long way with hazelnuts. He shaped this into a loaf he called ‘Giandujot,’ after a carnival character … Years later, Ferrero’s son Michele would tweak the recipe and rename it ‘Nutella,’ and it became a worldwide sensation.”

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