Karyn- great blog!
In my opinion, the health/fitness/wellness wearable devices and mobile apps have saturated the market. As you mentioned, there are so many products out there that do pretty much the same thing, so it is a pity that a) WW wasn’t able to see this big revolution coming and b) there is not much extra value (as far as we can see right now) that they can offer the customer by way of differentiation. I agree with you 100%- WW was too late when they did launch their mobile app, and in today’s world, users can very easily switch from one mobile app to another if they are unsatisfied with the first one (here, due to glitches or having to pay to access features). WW also needs to completely renovate the image of their brand, as I think they still appeal to an older audience, whereas companies nowadays are trying their best to appeal to millennials.
From an operations standpoint, I like your idea of WW partnering with Amazon Fresh to deliver fresh produce to customers. I have a few more ideas-
a) WW can partner with Blue Apron to provide low calorie/high fiber recipes to members of WW
b) WW can also partner with Fitbit, to incentivize new members to join because they’ll get 50% off the latest Fitbit (??)
c) In partnering with Fitbit, WW can randomly assign members of similar weights and ages to a group, so they can compete online in # of steps taken per day, to motivate them to lose weight through healthy competition, while establishing an online support community.
Great article and analysis! I too recently saw these dash buttons on Amazon.com that they are heavily advertising on the front page of their website, but I am skeptical about their use and adoption. For all the reasons you mentioned- concerns of hacking, getting wolf urine, skepticism about Amazon forcing sales through any means necessary- it will be interesting to see just how many people adopt the dash button. I am wary that Amazon will begin to update their logistics and operations based on order patterns of the customers who are heavy-users of Tide, Lysol, Pampers, etc and who inherently order a lot because they use a lot. This new logistics system could very well serve the needs and demands of the heavy user who would probably love to see their products ‘replenish themselves out of thin air’, however it is likely to cause build up of inventory or product starvation (and a whole lot of inconvenience) for the customers who would like to order JIT.
It seems that Amazon is taking a big risk in assuming that a majority of their customers would prefer to press a button and wait 1-2 days for their product to arrive. There will be customers however who don’t see the problem in stopping at Target on their way home from work, and buying 1 month’s worth of toilet paper. I would advise Amazon from doing anything rash to their operations.
Piriya- great blog, and great exhibits showcasing the ways in which the hotel industry uses both mobile apps to ease the guest’s journey, and digital technologies to make the hotel room more comfortable.
I would argue that OTAs and hotels have a more symbiotic relationship. OTAs provide hotels with exposure, and a platform for customers to advertise them through word-of-mouth. Hotels provide OTAs with rooms to earn commission on.
I imagine before the world wide web and OTAs, hotel sales people would have had to maintain good relationships with travel agencies to motivate them to influence customers to book rooms with those particular hotels. In today’s world, an OTA cannot influence how much visibility a hotel on their website gets, even if the relationship between the OTA and the hotel turns sour. Hotels show up on the website according to popularity among customers, and number of bookings made in the recent past.
Additionally, Accor hotels owns many hotels and so many rooms, and therefore, it is more likely that a customer will find an Accor Hotel room on an OTA website and book it, thereby leading to a commission for the OTA.
If this is the case, how do OTAs still manage to squeeze margins for hotels? I would have thought large hotels such as Accor would have had more negotiating power.
Mary- great blog! It seems that FarFetch is definitely doing a good job enabling fashion-conscious customers to order top fashion brands online, just as the average customer is able to order clothes from a mainstream retailer. I think it is a delicate balance to offer luxury online without making it seem too accessible and therefore, not luxury anymore.
I really like how FarFetch is also able to help boutiques clear out inventory by making the inventory accessible to customers all around the world, in turn motivating boutiques to be a bit more risky in their design choice. However, I am concerned about the relationship between boutique owners and FarFetch. Boutique owners are probably very aware that their merchandise will sell better online because they will be able to reach a wider customer base, thus making their brick-and-mortar establishments an unnecessary monthly rental expense. The revenue could instead be invested in more designs and SKUs. However, for boutique owners who want to maintain the physical presence of a store, might be torn between doing business with FarFetch or going it alone. How does FarFetch manage this relationship with boutique owners?
Apeksha- great article! Also really enjoyed the video- very informative!
A few thoughts regarding Hallmark- If Hallmark releases 10,000 new SKUs every year, how many SKUs do they have in total and what is their minimum production quantity? I’m assuming that the reason Hallmark has not invested in a mobile app to customize cards and send them out would be because allowing the customer to customize cards would mean a minimum production quantity of 1, which is perhaps just too inefficient for their factories to execute. Additionally since the paper card industry is declining at 3.2%, would it not benefit Hallmark to reduce their SKU count? Hallmark could do an 80-20 study on their SKUs- that is, analyze which 20% of SKUs provide 80% of the revenue, while getting rid of the the remaining 80% of SKUs that only bring in 20% of revenue. Such a move would help realize production efficiencies, and help Hallmark identify better which SKUs tend to be more popular, thus allowing them to concentrate their marketing budget more on the bestsellers.
Also, I never realized that Hallmark card warehouses would be so labor intensive, but in this declining business, maybe Hallmark is not able to afford automation. The whole collection and distribution method shown above seems very inefficient and physically difficult on employees. Maybe there are some operating efficiencies that can be realized here.
Interesting blog! I can’t help looking at this problem through a more scientific lens though…
Even if using an artificial snow machine does make financial sense because it lengths snow season for 55-120 days, I see it is a vicious cycle. I imagine it takes a lot of electricity to fuel an artificial snow machine to cover large parts of a slope, if not the entire slope, or to thicken the snow on a slope. More electricity usage, more carbon dioxide in the atmosphere, a warmer atmosphere, less snow, more need to use the artificial snow machine! Additionally, before investing in an artificial snow machine, I would want to know how I can prevent the artificial snow I’ve created from melting any time soon…thus preventing me from having to pull out my artificial snow machine again, or just keep it going constantly, and adding to my utility bill.
I admit that creating artificial snow and thus, creating an environment on a ski resort is like creating an artificial environment in an office or residential building- heating during the winter, cooling during the summer. However, I would argue that there is no way to insulate snow on a mountain and stop it from melting, unless we use ‘glacier blankets’- what are these? There are ways to insulate building to retain their heat for longer. I just don’t see artificial snow machines as sustainable, either in the financial or environmental sense. I think WB should diversify their investments and become a water park 🙂
Great article! I too have been skeptical of Starbuck’s ‘green’ operations, but have never thought to research it- so thank you!
I agree with your assessment of how their global carbon impact has increased- through opening more stores, more electricity use, and the introduction of products that require more heating/cooling etc. It makes sense that this would be the case.
I think Starbucks is being a little short-sighted. They could actually drive a lot more sales if they actually walked the walk, instead of just use sustainability as a marketing gimmick. As we learned our MKT case study, Starbucks originally appealed to affluent, white females but now appeals to everyone- millennials, college kids, and really anyone who also wants to be a part of the Starbucks brand, etc. If these customers didn’t already love Starbucks for all it is and stands for, they would fall completely head over heels for Starbucks, if Starbucks advertised that it is now sourcing energy only from renewable sources, if it had days when it donates 100% proceeds from sales of coffee to the farmers of coffee plantations, if it began selling coffee mugs made from recycled ceramic, if it published actual results from sustainability efforts on their website etc.This way, they would not even need to cut down on product offerings, which I think is a little hard to do in this stage of the game.
I should go work for Starbucks!
Awesome post! It is encouraging that the hotel industry is graduating past its towel/linen reuse program to more serious steps. The use of resources in hotels is close to my heart, because I often wonder just how much electricity/water guests are wasting if they are on holiday and thus have fewer cares. I myself am guilty of leaving the bathroom light on- why? Just because I couldn’t be bothered to turn it off in a hotel! It’s not my house!
Super interesting to see the results that Hyatt has been able to achieve through its sustainability programs. It wasn’t entirely clear to me however, how sustainability factors into the travel habits of millennials. I assumed the biggest factors affecting hotel choice are probably price, and then loyalty to the particular hotel brand(?) Can hotels begin advertising their sustainability efforts on social media/TV so as to create more goodwill for a particular hotel brand? That being said, the hotel will probably need to be very careful not to give the customer the feeling that because their operations are more sustainable, that quality of hotel stay will be diminished in any way. What do you think?
This was a really good read- interesting, engaging, well written and about a very friendly topic!
While your argument is interesting, I’m still not entirely convinced that Ben & Jerry’s CSR is not just a marketing tool to engage the environment-conscious millennial right now. I want to research the website at risk of craving a big bowl of ice cream right now! It would be interesting to know if the petitions and lobbying efforts on their website have led to actual change, maybe not just in dairy farms in the US, but even further from home- for example, if the Ghana and Cote d’Ivoire governments have been pushed to restore/replenish/maintain the cocoa-growing land in their countries. It would be even more interesting and encouraging to see Unilever use its power and unite other companies who own cocoa-dependent brands, and lobby for major change in sustaining cocoa plantations despite climate change. Do you have any data on results? Let’s hope that the future of chocolate and ice cream is safe!
Great read! I’m surprised that as a chemical engineer, I never stopped to think that even the material that makes up our houses and roads and that is so ubiquitous could be such a huge contributor to global carbon dioxide. The unsettling thing I think is also, because it is everywhere and is so necessary, it is kind of like oil and gas, in that there doesn’t seem to be a good enough alternative to completely replace either.
In the scorecard provided, it seems that an external observe has graded CEMEX to have made small improvements to those carbon-related metrics, however the improvements are within range. What incentive does CEMEX have to continue improving its operations to become cleaner and greener? Is the cement industry in the radar of environmental agencies or regulators?If the company’s fuel usage targets have not changed since 2006, it seems to me that the sustainability goals within the company are perhaps not being prioritized as much in recent times. Do you think this will change?