I agree with your points challenging the value proposition of Starbucks, but I really think the ritualistic nature of the experience and the community are what drive people to become loyal patrons. So Starbucks is always packed because they use the right data tools and analytics to provide the maximum value for a specific subset of consumers–not because Starbucks is the hottest thing since sliced bread :p. It still baffles me why there are 3 Starbucks in Harvard Square so close to each other–despite less foot traffic at the smaller locations, the bigger one is always PACKED. So it leads me to believe that people don’t just go there for the coffee itself–they go for the experience, to be seen, to see, to feel. I am not a coffee drinker (shocking, I know), but I’ll often find myself at Starbucks to meet people and to do work over mediocre tea–a testament that it isn’t the coffee itself that’s driving repeat business, but the ambience and convenient, high-quality experience.
I’m curious to learn more about the site’s stickiness for its browsers. I see the value for large beauty companies to use data from sites like Poshly, but wonder what’s preventing other similar sites from attracting revenues away from Poshly?
I see customization and data as the key to creating beauty products people will like and consume. I’d be curious to learn more about brand loyalty for product type–for example, are people more loyal to certain foundations given skin type specifics vs. something more commoditized like nail polish?
I think the limit on the right swipe function applies to males, but not to females. I remember back when a work college was using Tinder in 2013, he would have the interns in their downtime swipe right with reckless abandon, hoping to cast a wide net and find some “suitable” options in the pile. On the other hand, as a Tinder user myself, I and other women I know who use the app are much more selective in their swiping–we currently don’t have limits on the number of right swipes, but I think because women spend more time vetting a male’s profile before swiping right.
I like the newer version of the app and I’m curious to learn more about their matching algorithm; as a former user of Hinge, I appreciated learning that the app “learns” about your preferences and tries to show you a deck that seems to pander to what your would typically swipe right for. Additionally, the Hinge founder also talked about how high “right swipe” profiles tend to be shown a higher proportion of “right swipe” profiles as well, improving the quality experience for those who “are more desirable”, but less value for those who don’t get as many right swipes”. I’d be curious to learn if Tinder also leverages this kind of data. As it stands now, it just seems like an endless stream of men and interesting pick-up lines. But you can’t beat its network effects–there are SO SO many people on the app that even when you use your Bumble or Hinge and they run out of options, you know Tinder is old reliable with an endless supply waiting at your fingertips, literally :p
Wow! This also reminds me a bit of alot of Twitter hashtags gone wrong, such as when NYPD created a hashtag #myNYPD, which was intended to draw support for positive stories and interactions with police, but instead was inundated with social concern and outrage about incidents of police brutality. I’ve seen this go wrong horrible for brands as well, but I think there is something to be said about how citizens view the government/institutions leveraging social media for community engagement. I think there is potential for tremendous value in crowd-sourcing ideas/comments from citizens, and I like your point about maybe having some broader categories of ideas–but Carina is right–who is going to filter all these ideas to separate wheat from the chaff? I think it could be expensive if executed properly, but don’t think it can be executed properly and efficiently without sufficient funds and resources.
I LOVED legos as a kid. As a girl growing up with a brother, I had the opportunity to play with the various sets as a kid in the 80s/early 90s-something many of my female grade school classmates did not as their moms were buying them dolls and other “female-oriented” toys; don’t get me wrong, I had my share of dolls too, but I am fortunate to have had a brother to be able to play with legos to cater toward my creative engineering desires.
I think the crowd-sourcing is an integral element of Lego’s strategy; it was kind of sad to see that Legos declined significantly in desirable among kids a few years ago, as video games and other toys seemed to occupy the desires of the growing minds. Legos restrategized and among these strategies for engagement, which also tapped into the nostalgia of “newer parents” in the generation that grew up with Legos, was the in-mall stores and Playland. However, I question the age restriction–I certainly understand the safety element of doing so, but I think Legos misses an opportunity to reach younger minds and build loyalty even earlier on–and habit. I wonder if 13 is a bit late, teenagers who may like the social networking component of the game, but aren’t necessarily avid consumers of lego products.
Lego has also been trying to cater a bit more toward girls going forward, and I think that they should make a particularly stronger effort in trying to engage female audiences and users, given its strong network effects. I still play with Legos when I go home, so it will be interesting to see how the next generations engage with my favorite childhood toy 🙂
I do not know where I would be without Wikipedia. The community of editors is critical to the value of the contributions, although the lag in flagging inappropriate comments or false information affects the value of the content. I appreciate the non-profit structure of the company and the lack of ads to maintain control and integrity of the platform; however, I do think that given the scale of the platform and its importance to billions of users worldwide, the company should look into a more viable business model that allows it to capture more value so that way it can improve the quality of entries and the timeliness of edits. Particularly given that, as someone mentioned above, Wikipedia is replacing the expensive Encyclopedia Britannica’s and is often the first source of information, its prominence is unquestioned; as such, it needs to reevaluate the how it captures and delivers value.
Thanks for writing! I have yet to try RTR, but have been excited by the concept. I have friends who are very religious users of the platform. It’s interesting to see how they will balance inventory carrying costs and the need for variety. I have heard one too many complaints about friends not wanting to use RTR for an event in the city among friends/networks, as it was very likely for another (2 or 3, at one event of a friend’s 4!) guests to be seen in the same dress (I definitely agree with Sherry and remember the Holidazzle fiasco) ! Not that it is a big deal, but there is something to be said about women wanting the RTR experience to be unique and aspirational, but that sentiment is dilated when it seems that the dresses there are commonplace and your friends are seen in the exact same ensemble. Perhaps they might experiment with models that might let users see what friends might be renting or note the occasion(s) around the city where a dress might be rented. All in all, great business model, but I think as more users use the network, RTR will probably have to see greater variety and carrying costs to keep up with its value proposition.
Interesting article. I remember heavily using these sites as I was fresh out of undergrad, with little disposable income for aspirational goods. While I agree that the downturn a couple years back certainly helped fuel the spike in interest for sites such as Rue La La and Gilt, I wonder if they can fight for relevancy among brick-and-mortar stores that allow customers to actually see and interact with the product before purchase. In making an expensive investment, a typical user might feel the need to validate his/her purchase decision. I would venture to guess that this is even more true among customers not intimately acquainted with high-end luxury brand products–you want to know what you’re getting into before pulling the purchase, even if it is from a verified source. Perhaps such online sites would do well to try to segment their customers–those more familiar with aspirational brands and those who use the site as a gateway to make such purchases; these segments of customers will likely have different incentives.
It looks like customer service, or expiditd delivery, might be two ways to address user experience pain points. A loyalty program of course seems like a logical move. Might there be a way to combine the convenience of online shopping with the immediate gratification of being able to interact with a product? Perhaps HD graphics of the images, outfit pairings, or other online engagement activities may help drive trust in the product and desire to purchase.
How to segment customers–those familiar with brands, those who aspire luxury goods, but do not have as much knowledge–
It makes sense that Pinterest could generate more revenue for merchants than Facebook, as Pinterest users also seem to be highly motivated in seeking out certain products and objects, often using Pinterest as a source of ideas and inspiration; conversely, Facebook is certainly foremost a social networking platform which also features a lucrative platform for reaching out to users–though often, in a less targeted way.
I am not an avid Pinterest user, but even so I often find myself landing on the site when searching for make-up tutorials or ideas for birthday party themes. Once I land there through search, however, I find myself going down a rabbit hole of pages.
I do find it interesting that 70% of its users are women–probably also an impact from network effect, whereby friends are likely to share relevant content with friends of certain demographics. With a proliferation of pages that skew female in content perception or target audience, it’s no wonder why the figure sticks so high toward female. I’d be curious to learn about why the platform skews so heavily toward women (especially in the US), and for those countries in which it is more evenly weighted, what the causes and draws are that build a high network of male user skew.
I first used Instacart during this brutal Boston winter. Having had a roommate with a car the past 4 years of living in Boston, I did not know what was going to happen to my grocery shopping habits. Renting a Zipcar was actually far less economical than the cheap delivery fee of Instacart. And when Market Basket was added to Instacart’s offering, that officially sealed the deal for me and I have never looked back.
However, I think the model is very limited to working best in dense areas where the majority of patrons rely on public transportation. I could never see the model succeeding in an area like the suburbs of Georgia (where I am from), where cars are plenty and grocery stores are widespread. I do think, however, that even in car-dominated cities, Instacart’s business model would work well on University campuses or in contexts where the target consumer is a very busy professional and can afford to wait a day or two for groceries–particularly if the grocery store isn’t open when he/she gets off work or is located far from the commute route to/from work.
I think their business model of offering tiered delivery fees based on peak demand times is smart, but I also think they could better take advantage of coordinating drop-offs. For example, if a pool of consumers in one area is not super time-sensitive in their grocery deliver, perhaps Instacart could offer discounts if such consumers could discover each other and coordinate a drop off time that would give Instacart delivery persons a more efficient route of business.
All I know is, I know I won’t be hungry this winter when Spangler closes thanks to this wonderful service 🙂
As a loyal Burberry fan, I’ve been encouraged by its resurgence recently. As you noted, I think digital and online presence has played a huge role in connecting with consumers as well as creating brand awareness to milennials who may have heard about the brand from their parents, but are now old enough to have purchasing power for some of its items.
I think the perfect example that illustrates the brand’s efforts to reach both its traditional, older loyal segment and newer segments are its use of Jordan Dunn (a Millennial model) and Naomi Campbell (supermodel who dominated the 90s), featured together in many of its ads. A testament to the brand’s digital prowess and connectivity with tech savvy consumers is that it has 4.4M followers on Instagram–that’s more than Target (940K) and trailing not too far behind Forever21 (8M), comprised of millennial-heavy, younger mass consumers who are obsessed with Instagram.
As brick-and-mortar stores become less important and online presence offers a way to stay connected with consumers frequently, Burberry gets the message loud and clear–and are reaping the benefits of following technology.
Great insights, Sherry.
Interesting to see how LinkedIn has leveled the playing field to actively recruit candidate from highly sought-after universities. When I was in college (before LinkedIn became the Norm), the University and University organizations served as gate-keepers of student talent, often offering student resume books in exchange for financial sponsorship or other similar criteria. On the student front, if he/she was not contacted by companies through the recruiting pool, he/she would often face the grueling process of researching and networking to find suitable opportunities.
Even companies that boast powerful talent and endless capital, who traditionally do go through formal University channels to recruit students, are using LinkedIn to supplement their search. Before recruiting season started at HBS, I saw that a number of recruiters who already come to campus viewing my LinkedIn profile. Even the smaller guys (interesting firms I have never heard of) pop on my radar under “Profile views” even if I don’t get a direct message. In the latter case, they may or may not be taking advantage of the free version of the platform to scope talent without paying for it. As such, i’d be curious to see if LinkedIN might offer more attractive features for start-ups or smaller companies using the platform to recruit, as LinkedIn is missing out on opportunities to cash in and capture value from a number of users/companies using the platform in that way.
While some users allow public users to see their entire profile without being connected, others limit what is visible until a connection is established. I wonder if LinkedIN might experiment with witholding more of a user’s profile from being visible as a way to encourage payment of services.
Users and companies alike have grown increasingly dependent on LinkedIN–I’ve even heard professional say they negatively view Milennials who do not have a LinkedIn preference. And with a massive number of profiled on the database, the company surely has a ‘lock’ and significant barrier to entry to up-and-coming imitators on the platform.