The internet changed everything for retailers and retail brands for many obvious reasons (more customer touch points, more targeted advertising, pricing strategies, more advertising venues, access to more customers and more sales). But it has also had a subtle and important implication to it that most retailers and brands have not really grasped due to their historical points of view. The greatest impact of the internet has been that it has enabled people with common interests to connect on topics and discussions that move them in a more engaging and interesting manner because they can find people who have much more in common with them, irrespective of where they are located physically.
Historically, stores have been based on the geographic aggregation of customers – merchants formed stores when enough people passed by their location that they could make a living. When a population was large enough in their given area (either through travels or residence), there were opportunities to specialize. For example, as a western frontier town grew, the proverbial general store gave rise to to the dress shop and the hat store and the hardware store. There were enough people, with enough specific needs for stores with more specialization to [...]
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I had a wonderful time at the Startup Summit at Princeton last week. A tremendous group of future entrepreneurs. Rather than tell them that they are all wonderful and to go out and try to be all they can be, I told them that we are about to enter an epic shit storm of economic and societal distress. There will be lots of change and, fortunately for them, that means opportunity if they have the skills and courage to seize it
Read MoreI’ve been teaching a class on entrepreneurship at NYU called Ready,FIRE! Aim for the past 5 years. It is a fun class with incredible students and several businesses have come out of students who have graduated from the class (Branch, Fondu, LeanStartupMachine and others). But this past week, we did something that I think really added to the course and hopefully will lay the groundwork for even more successful alums in the future: we taught a class on ethics and integrity.
This topic is keen on my mind for many reasons. Most outstanding is the fact that evidence of integrity is lacking more and more in our personal and business lives. Look at the mess from the financial crisis as one of many examples. Simply put, we do not have a culture that emphasizes doing the right thing when nobody is looking. It’s more of a win at all costs.
The point of this class though was not simply to preach morals and values. Rather, it was to make a business case for being ethical and having integrity. Here it is:
It builds trust. Trust is earned by demonstrating integrity repeatedly and in trust reduces friction in a business relationship. Think of the [...]
Read MoreI had a chance to have my photograph taken with President Obama on Thursday with Shauna Mei, the CEO of AHALife a Firstmark portfolio company. Standing in line with Shauna, I told her how excited I was because I wanted to tell the President something that I thought was going to be one of the biggest challenges our nation will face in the coming years but what is being ignored by Washington. Shauna and I got up to shake his hand, receive his warm thanks for coming (and donating!) and snapped the photo. Then, as my big chance came and I got half way through what I wanted to say, I was ushered away by a smiling factotum who was looking at me as he would his senile grandmother who could not find the front door to her house.
But here’s what I wanted to tell him:
“Mr. President, last week we announced that a higher percentage of Americans have college degrees than in any time our nation’s history, but nobody in your administration or Washington seems to realize that we also have the highest skills gap between what our people have and what our nation needs than at any point in [...]
Read MoreI was at dinner last week with blogger/designer extraordinaire Zana Bane of Garbage Dress, Digital Fashion Editor Mary Lee and designer Norisol Ferrari and Zana mentioned a promotion that she just got from a cool little shoe brand, Miista. Last week Miista ran a promotional program called “Cheaper with a Tweet”. Essentially how it works is that the more people tweet about something, the price drops. The amount of price drop is calculated using a person’s Klout score (the higher the score, the more the price drops). As the price goes down, people can buy until they are all gone.
I realize that other people have toyed around with this in the past and I have seen economics papers written on variable pricing models, but I just found this fascinating. First, it was really well done and fun. Second, it was a great way to find the clearing price for end of season product AND drive traffic to other products on the site. They paid for advertising through in-kind discounts and engaged and energized a loyal base while gaining exposure to new customers.
To me, pricing is one of the most fascinating facets of commerce and, especially in fashion and luxury, [...]