Interesting post and a great read, Erica! Very cool to see what Macy’s is doing to continue to differentiate in the retail industry and add value for its customers. I think that retail is a space that is ripe for technological disruption, and I believe that this type of smart fitting room is the first step in that direction. I’m curious to see how companies continue to innovate in this space and believe that it could become increasingly customized.
One idea I thought might be interesting was if they could upsell you directly from the fitting room / app. If the fitting room algorithm knew what you were trying on and your general statistics (height, weight, etc.), then it could suggest pairings for the outfits and other things you might purchase. This would be similar to how Amazon suggests similar products, but in this case, Macy’s could actually suggest and then quickly deliver so that the customer could try it on. The product would be highly customized – and would be available in real-time – so it may have the potential to drive considerable sales for Macy’s. Could be an interesting next step from what you’ve described in your article, so I wonder if they will pursue something like this.
Interesting post, Long! I agree with you that it’s eye opening to see the volume of transactions that is processed on such a big shopping day. In your article, you discuss how Visa and Mastercard help play a big role in ensuring Alibaba can actually keep its systems up and process so many orders. While I agree, I think that AliPay is also critical here and is what is truly making the operations behind a day like this happen. I would think that a good amount of the transaction volume is conducted through AliPay given how popular it is in China and key markets for Alibaba.
Without AliPay, I don’t think that Alibaba could conduct such a massive selling day at scale. However, this new payments platform allows them to do exactly that. Given how integral AliPay’s success is to Alibaba, I’m curious to see if Alibaba looks to expand further through other acquisitions in the payments space. While they are an online marketplace, online payments capabilities becomes critical to a marketplace’s success (as proven by AliPay). As they look to scale, this could become a key point of investment for the company since payments will continue to be a key focus.
Interesting read, Hugo! Definitely agree that Tag Heuer needs to do more to compete with the Apples of the world if they’re going to stay ahead of the technology curve and continue to provide a differentiated product for their customers. I’m pretty curious about how sustainable some of these watch companies will be in the long-term given the intersection of the watch industry with technology.
If smart watches end up dominating the market, traditional watch companies will be at a significant disadvantage and will be leaps and bounds behind from a technological standpoint relative to a company like Apple. With everything moving toward technology-enabled watches, these companies may find themselves considerably behind tech companies who are new to the watch business but are a step ahead in the technology. If the core value proposition of a watch shifts from luxury to technology, we may see companies like Apple quickly establish a stranglehold of the watch market – a market which they would’ve just recently entered.
Therefore, I think this is all the more reason why Tag Heuer needs to stay ahead of the curve and continue to innovate technologically.
Interesting read, Chris! Very cool to see what Activision Blizzard is doing in the video games space. It’s intriguing to think where the industry could go from here – and I’m particularly curious to see how the business model of video game companies evolves as technological innovation transpires. When there was a big shift in video games from consoles to mobile devices, the industry saw a lot more free applications that upsold you within the app and other pay-to-play types of games.
Effectively, the game would cost very little to start playing but the game would quickly find ways to monetize you in-app once you were playing. This largely differed from consoles, where games had a large upfront cost (i.e., $50 to purchase the game disk), but a low to no ongoing cost. In essence, the different device led to a different ecosystem where developers devised different ways to acquire and monetize customers.
Given that now the industry is moving more to virtual reality – which will have a completely different set of hardware to complement the experience – I’m interested to see how the business model of these companies will shift to adapt. Given such a drastic shift in business model when moving from physical consoles to mobile devices, I’m interested to see how it evolves once headsets and other virtual reality hardware are introduced.
Interesting article and a great read, Grace! I definitely think that GroupOn has a particularly unique business model. It’s interesting how they are able to offer scale to potential merchants so that they can source new business, although at a sacrifice on their margin. GroupOn has always been interesting to me in the sense of cannibalization though. In your article, you discuss how people using GroupOns at a restaurant could limit other full-time customers from entering, i.e., it would limit other high-value customers from participating.
However, I think that another scenario also unfolds in addition to what you’ve described – the customer actually would have eaten at that restaurant for full price but instead gets the same product for a discounted price. What that suggests is that GroupOn could actually be providing discounts to customers who would’ve paid full price anyway, but instead they are getting a deal, and the GroupOn is actually leading to a lower-price version of the same customer cannibalizing the version that would’ve paid the same price.
I’m curious to what extent this dynamic holds, but if it does to a high degree, I feel that GroupOn may find trouble building out a sustainable business. If they can’t prove to merchants that their business is accretive and adds value to the merchants that are giving away considerable margin to participate on the site, GroupOn will have a hard time staying around.
Great post and an interesting read! Definitely agree that airplane design will reach its limits in regard to its benefit in reducing GHG emissions, and that more radical and innovative technology applied to the industry could provide long-term sustainability. I think biofuels are definitely one way that airlines could achieve this. It’s also interesting to see how learnings from the automobile market are now being transferred and investigated for application the the aviation industry as well.
The auto industry responded to higher costs of transportation and global warming with a greater investment in building out electric and hybrid models. This technology is also now being explored in airplanes, with both NASA and Airbus exploring electric and hybrid airplanes. I agree that the airline industry is ripe for change given how much oil it currently consumes, so I hope that both biofuels and more innovative engines gain considerable traction in the market and revolutionize the aviation industry.
These technologies will require considerable R&D investment up-front, but hopefully could drive drastic changes to the industry longer-term if there were an increased focus on developing them.
Smitha, great post and an interesting read! Definitely agree that the beer industry is one that faces considerable challenges due to its dependence on water as a natural resource. I was actually the campus rep for Anheuser-Busch for a couple years in college, and I was impressed by how focused they were as a company in ensuring sustainability, especially in regard to water usage.
I’m curious to see how Anheuser-Busch continues to innovate in sourcing its water, and I hope that it tests and explores more radical technology to drive sustainability long-term. I think sourcing is a key component of the water industry, as you’ve touched on in your post. For instance, they could explore water desalination to create a massive amount of potable water. If they invested in the technology, optimized overall operations, and achieved scale, there could be considerable savings in regard to the cost of water – savings which could be passed onto the consumer or the community.
They would also potentially save on shipping costs as a company, since they could source water regionally. If they created an adaptable technology that was easily transferable to new geographies, they could source from the closest ocean possible, unlocking savings in shipping and freight cost. This would be a bold step from where they are today, but it could be an interesting way to decrease their dependence on the current water supply and unlock potential savings for their business and customer base.
Interesting post and a good read – I definitely agree that the cruise industry will have imminent increases in regulation. With the rise of global tourism, we have seen increased scrutiny on the transportation industry; it started with cars, but now airplanes and cruises will see more regulation as well.
I hope that this will drive increased investment in cruise ship engine technology. It’s interesting to see how the car market responded to increased cost of driving (via gas prices) and increased incentives to be gas efficient (e.g, being able to use the carpool lane), developing a market opportunity that paved the way for electric vehicles. Depending on how regulation is designed on the cruise industry, I hope the government can do so in a way to will incentivize a similar investment in building out the R&D of the cruise engine industry.
It feels like a similar radical technology – if applied to a vehicle that consumes considerable energy given its size – would lead to a considerable reduction in GHG emissions and increase sustainability overall. This is especially true when considering what’s in the water; there’s countless marine life and organisms, and I would think that cleaner energy solutions would be better for their survival as well.
Interesting post and a good read. Definitely agree that changing packing behavior could be an interesting way to incentivize customers to limit baggage, thereby limiting the weight of the airplane and saving GHG emissions. I actually wrote my blog post on the aviation industry as well, and it was amazing to see how even small changes to the weight of an aircraft can drive substantial savings in fuel consumption. For Southwest, their One Report suggested that a technological change as simple as using tablets instead of heavy paper manuals and charts drove a 500K reduction in gallon consumption in 2015 alone.
If the airline could provide incentives to get people to bring less baggage, that would be a more efficient system overall. This would be especially true for airlines with no baggage fees (including Southwest Airlines). Since people do not currently pay for baggage on these airlines, they would behaviorally have a natural inclination to bring more than what is optimal. There is no cost to the individual (it’s a value add of the airline), but there is a negative externality in driving the weight of the aircraft.
However, if a carrot or small stick (e.g., free drink on airplane or nominal fee) were introduced to regulate and create a ‘price’ for the bags, less people would bring bags when optimal to do so (e.g., a short-haul when they can just use a carry-on). Everyone is better off, and the airline can save substantially on fuel costs, reducing GHG overall and helping drive sustainability.
Completely agree that this is a key area where there should be a concerted investment in sustainability. I actually had the pleasure of getting my PADI scuba certification at the Great Barrier Reef the summer before coming to HBS. During my training, one good mechanism I noticed the diving school using was to to complement the scuba certification training with some sessions on the marine life at the Great Barrier Reef (including the one that I went through – Deep Sea Divers Den). The session is run by a marine biologist and explains why conversing the reef is important, and then recommends actionable steps for how each new diver can help preserve the reef.
I thought this was an interesting approach and could be very beneficial in spurring greater action at scale. I hope these diving schools can create more grassroots efforts to ensure more people are knowledgeable of how they can help preserve the reef. It was definitely an incredible experience and it was eye-opening to see the world from deep below the surface. I’ve always been someone who really enjoys to travel and has also lived abroad in multiple countries, but I had really only thought of what was above the surface in a given area – the culture, the architecture, the food, the nightlife, etc. Once I saw what the Australia world was like under water, it gave me a more holistic view of the country overall. I’ve heard that reefs can be quite exceptional in other countries as well, so I’m excited to explore some additional areas under water.
As such, I hope that the message of global warming is propagated effectively – especially in regions with strong reef networks – as it is critical for the survival of the marine life and the overall ecosystem.