Did Dollar Shave Club Hide a Failing Business Behind Investor Success?

November 27, 2018 Leave a comment

#DigitalDumping: the practice of adding a digital veneer to an existing supply chain, pricing below it, losing money and never having a realistic chance of making money, raising more money, raising valuation, and hurting money-making legacy businesses until one of them buys you for an unrealistic valuation, either to get rid of you or to soon realize that they must because the business will never make money.
Shahin Khan, @shahinkhan

There remains an incredible level of chatter about Dollar Shave Club – in no small part because they were bought for a huge amount of money by Unilever.

But is Dollar Shave a success story or #digitaldumping as defined by my good friend Shahin Khan?
Read more…

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Categories: General Retail, Home Goods

Bricks & Clicks: Why Store Presence Increases Online Sales in a Market Area

November 19, 2018 Leave a comment

My brother (a partner in a law firm with some shopping center landlord clients) and I were discussing retail and the challenges retail landlords face today. Press coverage suggesting a retail apocalypse is concerning when income from property depends on retail stores.

There are important changes happening in retail – but there’s also a lot of error out there. So we discussed why I think the “retail apocalypse” storyline is a myth. We discussed Amazon’s opening of over 300 brick locations. We discussed that the top shopping centers are doing well – the middle ground and low ground are where the suffering is highest.

I also observed that while retail is here for the long term and should remain stronger than online stores for the long term, there are short term trends that might be very serious problems for retailers – like they probably still have too many stores left from their expansions in the 2000s.

Then Stan asked me why I think on-line sales are higher when there is a brick and mortar store in the vicinity.

Read more…

Consumer Solar Needs a Steve Jobs to Make it Fly Off the Shelf.

February 7, 2013 6 comments

I love solar energy. And it’s encouraging that tremendous advances in technology have driven panel costs down while delivering more energy from smaller packages.

Yet, despite major investement in solar, the past 4 years have been more difficult for the solar energy industry than I’d expect – high profile bankruptcies, accusation of product dumping by Chinese manufacturers, and a Republican lust to create a scandal from these failures. And, from what I can see, the consumer solar applications just aren’t moving like they should.

There is a tendency with emerging markets to suggest the problems are technological. But I disagree – at least in the standard way we think about technology. Right now, it looks like core technology advancement has outpaced solar demand – driven by innovations in savvy & low cost manufacture as well as increasing energy output. That suggests the problems are more subtle. Read more…

Latest TiVO Results Illustrate the Impact of Communication Failure

June 1, 2012 3 comments

TiVO never told potential consumers their value so far too many boxes sat on retail shelves.

The latest TiVO results are out: huge jump in revenue while still managing to lose $21M on net revenue of only $68M. (Link here.)

TiVO finances offer a superb example of how early communication failure dooms a new product. Remember, you rarely get a decent second chance. And even if you do, your stumble at the beginning may open the door for rivals to muddy the waters.

And that’s where their failure started. TiVO’s first communication was based around the concept of “pause and rewind live TV” and similar VCR related ideas. As a proud TiVO owner, those ideas are miles away from the real reasons we love our TiVO’s – it reflects a minuscule part of why TiVO matters. Even worse, in advertising it sounds, frankly, quite silly and unimportant. It created a strong fear of meaningless gadgetry rather than a useful perception about the value the TiVO delivers. Read more…

Impact Driver or Impact Wrench? Confused Names Keep Products on the Shelf

November 8, 2010 4 comments

End-user confusion about drills and drivers is rampant – although the model in this stock photo looks more bored than confused.

There are many ways that companies conspire to keep their products sitting lazily on the shelf (safe from consumer purchase). One critical mistake is with naming.

Consider an example from the realm of the home store where tool makers have created a wilderness of product, category and project names that stand in the way of revenue and market share growth.

No tool category is more confused than drills and drivers. And over the past few years manufacturers have added to the confusion with the impact driver. The impact driver is a superb, compact tool that use small bursts of torque to deliver turning power around the screw, bolt or nut. Read more…

Key to New Product Success: Avoid “Death by Brand Advertising”

October 1, 2010 3 comments

Brand Advertising is Often the Wrong Choice for New Products

When you have a new product, the first order of business is getting consumers to love the product – love it so much they buy it.

Unfortunately, the ad/creative business is obsessed with brand advertising. And, sadly, choosing brand advertising for new products is a leading cause of Shelf Potato-dom. (With the term “brand advertising”, I refer to advertising that spends the bulk of time and energy building brand connections – often by saying either “this brand understand you” or “our brand’s cool will rub off on you if you buy our products”.) Read more…

The Politics of Potatoes

August 17, 2010 Leave a comment

How much unrealized profit do you have sitting on the shelf? If only you could get past the politics...

Assuming you have a product that has become a shelf potato and it looks like you can bring it alive, how do you get past the politics?

One general theme affects politics of potatoes: perspectives about money. On the one hand, companies easily minimize development costs when they are excited about a new product. Meanwhile, the marketing costs required to redeem a shelf potato flash onto everyone’s radar screen. So overall, your biggest challenge is shifting the corporate eye from the fresh, new thing to the reality of finding the highest returns for the lowest investment. Read more…

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