Marketing strategies universally need to incorporate mechanisms to attract, upsell, and retain customers. Some companies focus more on one aspect than another but they’re all there somewhere. Loyalty programs are one of the mechanisms used to help with both upselling and retention and this Marketing Dive article takes a close look at some of the changes taking place with retail loyalty programs. Interestingly the article talks about conflicting strategies. Some stores are moving more toward inclusivity and trying to let as many customers join as possible. Others go the opposite direction. Amazon increased the price of Prime membership, Wayfair implemented a $29.99/year fee for their loyalty program, and Lululemon is testing a program that would cost $128/year. The article also talks about how services can impact loyalty as well. For instance, offering same-day delivery increases loyalty for 61% of shoppers. A significant benefit of loyalty programs is detailed information about the customer and their browsing/shopping history. Stores are using that information to try to foster a stronger emotional connection and thereby increase loyalty even further. The article is full of content that could be used for a great in-depth discussion with students debating the merits and drawbacks of different strategies.
Using people, particularly celebrities, to promote products and services is a very effective way of gaining attention and credibility with an audience. The risk is that people are unpredictable and when a spokesperson does or says something that conflicts with your brand’s values and message that can create problems. Just ask Subway about Jared Fogle. Unfortunately challenges like this aren’t infrequent and one company dealing with such challenges is Papa John’s. The national pizza maker utilized it’s founder, John Schattner, as the face of the company in advertisements and even their logo. That worked fine until Schattner was caught making racist comments. Since then the company has had a very public parting of ways with Schattner and is trying to establish a new identity. This Yahoo Finance article talks about the latest developments in their strategy and it appears they are looking at using sports stars and YouTube influencers in future promotions. The company has experienced an 8.1% decline in North American sales in part due to Pizza Hut taking over their former partnership with the NFL after Schattner’s comments. Time will tell if their new strategy will be able to effectively reposition the brand.
The final leg of delivery to customers (referred to as the “last mile”) is often the most expensive leg of the journey. In a commoditized market, FedEx is trying to find a way to reinvent the last mile and give themselves differentiation and a lower cost structure versus their shipping competitors. FedEx revealed plans for utilizing an autonomous delivery robot which they descriptively but unimaginatively named the “FedEx SameDay Bot” to manage same day deliveries. The article also talks about Amazon’s foray into this space with their “Amazon Scout”. Target, Walmart, and Pizza Hut are all on board as initial customers utilizing the FedEx service. This logistical innovation will help them provide greater customer experience and presumably lower costs as well.
My students frequently tell me how important beer is in their lives. Yet despite their outward proclamation, their actual drinking habits have changed and the beer industry is facing some significant headwinds. Bloomberg talks about the industry’s challenges in their article “Pour One Out for the Fading American Beer Industry“. Despite a significant increase in craft beer consumption, overall beer consumption has declined for three straight years. The carbs and calories in beer are pushing consumers toward alternatives like wine and hard liquor. Changes in consumer preferences pushed Bud Light to create their 2019 Super Bowl commercial focusing on their competitors’ use of corn syrup in their beers (by the way, this is a great example of comparative advertising). The article talks about other influences such as the legalization of marijuana which may serve as another alternative to beer, especially to the college crowd.
Ben & Jerry’s is the latest company to join the movement to discontinue use of plastic straws. This follows similar decisions by Disney, Starbucks, Royal Caribbean, the city of Seattle, and more. Ben & Jerry’s reported that they currently use 30 million plastic spoons and 2.5 million plastic straws each year. Concern over social responsibility is a growing trend and a great marketing tool for attracting employees and loyal customers.
Interestingly, if you want to talk about market research and validating secondary data, there’s another angle you can take on this story. If you search the Internet to see how many straws are used by Americans each day one of the most frequent figures you’ll find is 500 million. That statistic is quoted by National Geographic, government agencies, news networks, and more. However, that statistic hasn’t been well authenticated. This New York Times article covers the history of that statistic. It originated in 2011 from a 9 year old boy named Milo Cress. According to the NYT article, more rigorous studies suggest the number of straws is likely between 170-390 million. It’s still a very large number but this helps illustrate the need to authenticate the actual source and validity of secondary data.