Will customers subscribe to Nike shoes?

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The Nike Adventure Club is an interesting new sales approach from the leader in athletic footwear. The target market is parents, who would pay a monthly subscription fee (of $20, $30, or $50 per month) to get new shoes every 90, 60 or 30 days. You can read more about the new business model in this Fast Company article, “Nike’s first shoe subscription, two years in the making, is here.” Part of the pitch is sustainability–as customers return the old shoes for recycling by Nike. But as the article notes, this may not be the best approach to lowering carbon emissions.

Companies love the subscription model as it can help drive up customer lifetime value (Chapter 2). You can now subscribe to get regular boxes of healthier snacks (SnackSack), date nights (Date Night in a Box), or doggie gifts (Dog Mom Box). These might be some interesting examples to offer when you get to the first pricing chapter (Chapter 17).

Mattress firms creating value (?) with financing deals…

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The mattress industry is a pretty crazy (check out “The Great Mattress Conspiracy: Why Are There So Many Mattress Stores?” on Endless Thread, podcast and story). You might check out the podcast for a fun example when you cover retailing. Or ethics. You might also check out one of our previous posts, “The Gray World of Online Reviews” (Teach the 4 Ps) — tags include ethics and online reviews.

Onto our story of the day and we are back in the retail mattress industry. With the emergence of new mattress products designed for easy shipping, online mattress stores (Casper, Leesa, Tuft & Needle), this market continues to be very competitive. Retail brick-and-mortar store Mattress Firm has closed 700 stores and is in Chapter 11 bankruptcy. Now they are competing on financing. In fact, Mattress Firm will give you six years of 0% interest on a mattress purchase of up to $3999. Financing is certainly one way to create value for customers — and the automobile industry has done it for years — but does it make sense for buyers of mattresses. We will see. Learn more reading “6-year, 0% loan for a mattress? Intense competition continues to grip mattress industry,” USA Today, October 25, 2019.

Charmin Forever Roll

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For those that have a serious fear of running out of toilet paper, Charmin has some really big news.  The company launched a new roll of toilet paper that is 12 inches in diameter and weighs about 2 pounds. It’s so large it needs it’s own free-standing dispenser (though you can buy wall-mounted units or get them as part of a starter pack directly from Charmin).  Another interesting twist is that the company is selling the new roll via monthly subscription.  The largest “Multi-user” roll is $9.99 when purchased individually or $7.99 when purchased via subscription.  Customers can choose the frequency of delivery when they sign up for the subscription.  You can read more about the new product in this article.

Target’s Mysterious Price Changes

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This 5 minute news video covers some very interesting pricing strategies employed by Target.  Using location awareness, Target will change prices within their app making products more expensive when you walk into the store.  The video includes an interview with a University of Minnesota marketing professor who provides his hypothesis for why Target might be using this variable pricing model.

Beyond showing a more sophisticated pricing strategy, this is an opportunity for an ethical discussion with students as well.  Is it okay for Target to behave in this manner?  When you load the Target app it asks if it can track your location so it can keep track of your favorite store and help you navigate the store.  Should they have to disclose that they may change product prices based on your location as well?  If they did so, would that make it okay?

AI Controlled Wheelchair

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In Chapter 9 of Essentials of Marketing we talk about the new product development process.  In the article “Facial gestures can move this AI-motorized wheelchair“, many elements of this process are covered when discussing a new motorized wheelchair that uses a 3D camera and artificial intelligence to recognize facial expressions and control the wheelchair based on those expressions.  The new wheelchair is designed by Brazilian-based Hoobox Robotics in partnership with Intel.  The article covers the target market for the new chair and also talks about some of the interesting findings discovered during user testing.  It also talks about incentives to get customer feedback and an interesting pricing model (they’re planning on using subscription pricing rather than the traditional asset sale model).  It’s a good reminder for students that even products that are highly technical require well managed marketing efforts if they want maximize their chance at success.