The Fish Keeper
Everyone seems to love discussing champagne and sparkling wine.
It seems that unlike Chateau Margaux, Taittinger is in the sparkling wine business. The diversification itself with the acquisition of land in England indicates that the family has long-term thinking. In reference to Peter’s comment, I believe there are many opportunities to breed certain types of grapes that could do better in a world post-climate change.
In regards to the blind taste test, I believe that the brand/label itself of Taittinger will make consumers want it and perceive it to taste better. The name “champagne” goes beyond simply taste and quality, it is a brand. As we have seen in Marketing, there are many circles with the inner circle being, sparking wine. There is taste, status, and marketing all as outer circles. Taittinger is not just sparkling wine, it’s a brand.
I will start out and say that I would love for Amazon to bring efficiency to the current prescription market where you have to physically go to a store and wait in line to make a purchase. Though I share Ninad’s worry that Amazon is expanding its tentacles into every aspect of our lives, I do welcome its customer service when it comes to such an opaque and inefficient market as healthcare.
I think doctors are largely responsible for many inefficiencies due to the lack of focus on management systems and operations. Doctors should realize that better operations from newer technologies and great enhance patient outcomes, especially after the patient is no longer under the care of the doctor.
Lastly, today’s 37-year-old will become 54 in 2 decades. Better to lock them into Amazon now than wait. Plus, the total market size for prescription drugs may actually increase if more people are buying drugs because of the ease of Amazon.
My main question is what does Amazon want to me? Do they really want to be A to Z of our lives?
I wonder if the current isolationist mood is the crest of the wave or just the start?
If the current isolationist sentiments are just the beginning, I think the countries with the biggest economies and domestic markets will stand to benefit at the expense of smaller countries. If United States and China continues to become more focused on requiring foreign manufacturers like Hyundai to locate factories domestically, then the manufacturer will almost be compelled to do so or potentially become unable to access the largest markets in the world. The global economy will be worse off, but individual countries with a certain heft will stand to benefit.
At the end of the day, we should try to understand the roots isolationism and nationalism, which I believe is the deterioration of traditional factory jobs. Just re-training these workers with new computer science or tech-related skills will not be enough. There are simply fewer technology/technology-service jobs gained than the factory jobs lost. Countries around the world will need to figure out address structural unemployment and the ongoing technological shift to machines or risk severe civil discontent.
While I think that Wal-mart’s current share of online retail sales is tiny compared Amazon’s, I would not discount Wal-mart just yet. Wal-mart is perhaps the only brick-and-mortar retail company that has the chance of competing with Amazon. Amazon does not always have the cheapest products, in many cases Wal-mart or other online retail sites may have cheaper prices. What Amazon currently offers are network effects and convenience/ease-of-use.
Wal-mart already has existing relationships with many product suppliers; it just needs to create a competitive digital retail platform that makes online purchases easy for consumers. Wal-mart has certainly shown that it is willing to spend significant capital to compete online with an estimated $11 billion to be spent in 2018 and 2019.  There may be a question as to whether Wal-mart can catch up, but the question has certainly not been answered yet.
To echo Anonymous’ comments above, I am surprised that Uniqlo is trying to match Zara and H&M. The issue that I personally have with Uniqlo is that they do not seem to have enough inventory on hand. I have found many instances where my particular size was out-of-stock. For example, across 4 Uniqlo stores in Japan, there was only 1 black polo in size medium while each store had close to 25 large and small sizes. It worries me that if Uniqlo cannot even properly manage its inventory in its home country, how does it plan to do so across a global geography of stores? I think Uniqlo should instead focus on its supply chain and operations to better predict customer demand.
However, I agree that Uniqlo needs to work on its e-commerce capabilities. Its website is one of the more confusing retail websites with way too many categories names on the left-hand sidebar. Additionally, in this age of free shipping, Uniqlo also needs to optimize its supply chain so that it does not need to require $125 for free shipping. Given that value for quality is one of its customer value propositions, the $125 minimum would be quite a hurdle for most customers who are just beginning to experiment with Uniqlo.
Thanks for your write-up Darrin!
You touch on the core issue facing many of the traditional businesses, especially CPG companies. I looked up all of L’Oreal’s brands and was amazed at the breadth and diversity, from Giorgio Armani to Kiehl’s. I think the question is how to best position its suite of brands to face digitization. We saw in the Kiehl’s case that their online website provided the company with detailed information on its customers and allowed the company to better service them and earn a higher margin. Can this direct-to-consumer model also be achieved across the rest of the suite of products? Should it be?
When looking at planned scarcity, I am little doubtful that it can be done at the parent company level. I think it may work at the individual brand level and would require the buy-in of the brands’ management teams. I think L’Oreal needs to be careful that any marketing plan fits the vision and spirit of the brand. Additionally, I think that every brand may have different inventory days with the example of a high-end luxury retailer like Giorgio Armani vs. Kiehl’s.
Ninad, your article certainly raises many questions and potential implications. One question that I am trying to wrap my head around is what does the end game look like? Both Berit and Darrin agree that one platform for distributing all content would be better for consumers. I think we are at a point in the industry where we cannot even imagine what the end game would look like. I think there may be more disruptive technologies that will arise to challenge the fragmented online media content landscape once all the major studios begin to proliferate their own streaming services.
If we look back at the 1948 United States Supreme Court decision in United States v. Paramount Pictures, Inc., we can draw parallels to what may happen now in the digital age. Prior to that landmark case, major movie studios owned movie theaters chains and had exclusive distribution rights with those movie theaters. The U.S. Supreme Court struck down this vertical integration and distribution scheme as a violation of the anti-trust laws because it essentially allowed the major movie studios to form an oligopoly. As we replace movie theater distribution with exclusive digital distribution via each studio’s online platforms, we may see the same story play out again.