Behind Costco’s Treasure-Hunt Shopping Strategy

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This Wall Street Journal video “Behind Costco’s Treasure-Hunt Shopping Strategy,” describes Costco’s marketing strategy. (see also this article at Business Insider).  Surprisingly, the store makes it hard to shop there – for example, it changes the location of some products and have limited selection. You might question whether this is customer oriented. But it seems to address other customer needs – including the joy of shopping and the fun of finding bargains.

This video might be fun to show when covering consumer behavior (Chapter 5) or retailing (Chapter 12). It might also be shown after the video, “A Brief History of Retail.”

 

 

Seattle’s Zero-Emissions Last-Mile Delivery Hub

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Earlier this month, the United Nations’ Intergovernmental Panel on Climate Change issued its latest report on the climate. It was not encouraging and clearly points to the need for the world to limit carbon emissions. Many cities and businesses are stepping already trying to do just that.

One opportunity for lowering emissions is the so-called “last mile” for online retail. This is the delivery to customers’ homes and businesses. This is seen as lower hanging fruit. So the city of Seattle is experimenting with some low-cost options, including cargo bikes, electric vehicles and pallets, and food trucks. This opportunity is leading to some innovation around delivery.

This Fast Company article describes “Seattle’s new zero-emissions delivery hub is an experiment in slashing e-commerce emissions.” This video (also shown below) describes some of that innovation. In Essentials of Marketing, we discuss innovation as a benefit of marketing (Chapter 1) and as part of new product development (Chapter 9). And of course this topic is relevant to distribution (see chapters 10, 11, and 12) Our textbook also covers sustainability in chapters 1 and 19.

A Couple of Examples of Companies Trying to Get Green (#M4BW)

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Many companies are seeking ways to lower their carbon footprint. Some, just because they want to do the right thing. Others because they want to build a better reputation with millennials. Some for both reasons. Here are a couple of short articles from Fast Company, that provide some good examples you might use in your class.

The title of the first one gives the top level overview, “Coke’s newest bottle is made from paper“. Consumer throw away millions of plastic Coke bottles every year. Is this a practical and environmentally friendly solution?

As you probably know, eating a more plant based diet might not be healthier just for you — but also for the planet. So a company like Sweetgreen (a restaurant chain focused on salads) is already ahead of the game. It is leaning into that with other efforts to lower its emissions. Read more in “How Sweetgreen plans to cut its carbon footprint in half in the next 6 years.”

 

Critical Thinking for Students – What businesses are harmed (helped) by the pandemic?

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OK, life gives you lemons (or worse, far worse, a pandemic), how do you make lemonade. Because the pandemic is everywhere these days, we might use this current event to get students to think about the impact on various types of business. You might ask your students questions like…

  • What types of products (or companies) are likely to do particularly well (or poorly) in the pandemic? And more importantly why?

Many of their answers can be tied back to consumer behavior changing. This gives them the opportunity to see how understanding customers influences business. For more interesting examples you might share with your students, consider these articles: “Puzzles, hair dye, yeast: Companies thriving during COVID-19,” and “Early department stores were incredibly innovative. What happened?” to find less obvious examples.

  • How should companies engage in promotion during the pandemic? Why? 

Again, more examples from successful and less successful companies. See these articles about advertising “We have hit peak pandemic advertising, and now they’re just annoying,” and “Brands With Strong Twitter Personalities Stay the Course During Covid-19” (you may need to sign up to access that last one — you can get three free articles a month after signing up).

Is this the dark side of Amazon? At the center of plenty of channel conflict

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I know, I know, we always seem to be using Amazon as an example. Well the company gets plenty of press–both good and bad. This probably falls better into the latter category. The article, “More brands are leaving Amazon, but the strategy could backfire,” (CNBC, January 11, 2010) describes how some bigger brands–including IKEA and Nike–have stopped selling through the online giant. These brands have become frustrated with Amazon’s failure to police counterfeit products or are concerned with competition from the retailer or its third-party sellers. The brands might leave, but because third-party sellers still offer the brands, their departure does little if anything to harm Amazon–and may do greater harm to the brand. A bit of a catch-22 for large brands.

This situation provides a good example of vertical conflict (between Amazon and the brands) and horizontal conflict where third-party sellers are competing with brands trying to sell direct through Amazon. It also offers an opportunity to discuss how a brand can lose control of its strategy when third-party sellers set their own pricing and messaging. Thus, it has relevance to Chapters 3 (competition and Amazon chapter-opening case), 8 (branding), 10 (channels of distribution and channel conflict), and 12 (retailing). With that much relevance I couldn’t hold back.