Business, Culture

Prime-al behavior

Amazon held its now-annual Prime day this week. Three years in, it’s safe to assume the tradition isn’t going anywhere soon; Sales were through the roof, and other retailers even started to piggyback their own deals off Amazon’s hype machine.

Other big shopping days are big shopping days because of consumer behavior. Black Friday became Black Friday because it was a weekday most people had off without any holiday obligations. Car dealerships and mattress stores, who both sell things you want to see and test before you buy, know you have some extra time over a three-day weekend, so they run promotions during Presidents’ Day, Memorial Day, and Labor Day.

Prime Day is different. Amazon created a big shopping day at a time when people specifically do not typically shop. Now that news outlets pay attention and other retailers circle the day on their own planning calendars, you could say Amazon has created a holiday out of thin air.

So is Amazon controlling our brains?

Maybe a little bit, but not any more than any other retailer.

A store (that isn’t going out of business or trying to liquidate inventory) generally has two reasons to put out a “Sale!” sign: 1) Everyone is shopping and they want to entice people in; or 2) No one is shopping and they want to entice people in. Amazon clearly opted for the latter – and as the world’s foremost digital retailer has a near-limitless variety of things to put on sale

Amazon clearly opted for the latter – and as the world’s foremost digital retailer has a near-limitless variety of things to put on sale to lure people in off the metaphorical street – a near limitless number of people they can reach, to boot.

A more direct comparison might be so-called “Hallmark Holidays.” Some are lame even if well-meaning. (Grandparents’ Day never really took off, did it?) But look at how Valentine’s Day, Mother’s Day, and Father’s Day affect consumer behavior and cultural trends in February, May, and June, respectively. Mother’s Day offers a particularly good example – after a Presidential proclamation made it “official” in 1914,

Mother’s Day offers a particularly good example of how a made-up holiday can take off. Within a decade after a Presidential proclamation made it “official” in 1914, the mother of Mother’s Day, Anna Jarvis, bemoaned the “profiteering” and opportunism around the day.

It’s easy to say the public is duped into spending money on these days. But the genius behind Hallmark holidays and Prime Day isn’t in creating demand, but focusing consumer behavior. Most people want to express their appreciation for Mom, but Mother’s Day gives them a specific day to do it. Amazon knows that people are usually motivated to buy with good deals, they just picked a day.

Amazon knows that people become motivated to buy stuff when they find good deals. They just picked a day. Now everyone is along for the ride.

 

 

 

 

Business, Culture, media

United stock rebounded – just like BP’s did

At the close of trading today, United’s stock traded at $79.67 per share. That’s the same United Airlines whose stock dropped after social media buzzed about a passenger getting dragged off a plane. Remember that story?

Remember that story? Remember the tweets and Facebook posts about how upsetting it was that a passenger could be bumped from a flight, then roughed up to boot? Remember the days of self-inflicted bad PR? United became a cautionary tale for a few days. Yet, if you bought 1,000 shares of United on April 18 and sold them today, you’d be almost $12,000 richer.

British Petroleum had a much more dire disaster on their hands when the Deepwater Horizon oil rig blew in April 2010. The day of the disaster, April 20, BP traded at $60.48 per share. By June 25, 2010, share prices had plummeted to $27.02. Yikes. Yet if you bought 1,000 shares at that nadir then sold the day before Thanksgiving at $41.47, you’d have an extra $14,000 in your pocket for Black Friday (less whatever you paid to get a really nice beat-down rod to help with the crowd at Wal-Mart). While BP has never hit the pre-spill peaks, they stock has stayed relatively solid since.

For these companies, you have to wonder how much internal panic there was when each respective problem hit. In each case, a few news cycles getting raked over the coals meant short term stock drops. It’s hard to be patient and ride out the storm in those cases. Yet in each case, the stock rebounded. People kept pumping gas at BP stations. When United’s flights came up as the cheapest alternatives for a given route, people still bought tickets.

Social media vitriol might seem like it burns with white hot fire. But fires eventually burn out. That’s worth keeping in mind the next time some outrage du jour clogs up news feeds.

 

 

 

Business, Funny Stuff, media, Politics and Grassroots

GOODNIGHT EVERYBODY!

Tonight, David Letterman will sign off for the last time. Now you may say, “Everyone is gushing about Letterman, the last thing the internet needs is another ‘Thanks, Dave’ post.”

Well, that’s too damn bad for you, Paco, because this is my blog and I get to write about whatever the hell I want. Go start your own blog. It’s free.

Watching the retrospectives over the past few months, the reason it’s so sad that Letterman is leaving is that it is so clearly time. Even if he reversed course tonight and said, “Nah! I’m coming back!” he couldn’t recapture the edge he had from his earlier days.

I’ve watched Letterman regularly since the early 1990s, starting out when A&E ran reruns of Late Night at 7:00 p.m. For Christmas 1993, I got a portable, broadcast-signal-only TV. The station that came in clearest was the CBS affiliate out of Philadelphia – and that was all I needed as I watched the Late Show every night. In 1995 I moved to Massachusetts (and got a normal-sized TV); even as many things in my life changed, Letterman was there. One of the best compliments I ever received was during sophomore year of high school, when a classmate turned to me and said, “You know, you remind me a lot of David Letterman.” We weren’t even talking about Letterman at the time.

Not to romanticize the man – Lord knows, he’s had flaws aplenty. But watching his shows, I have taken away some pretty valuable lessons – things that apply to politics, careers, relationships, or anything else you’re getting into these days. If only there was a thematically appropriate way to present these lessons in an ordered fashion…

TOP TEN LESSONS FROM DAVID LETTERMAN

10. Build your own road. There’s room. In 1991, when Letterman was passed over for the Tonight Show, there was Johnny Carson on at night and not much else. Arsenio Hall targeted younger demographics and black audiences, and Nightline was there for the news junkies, but there was only one late night talk show. Now there are at least five. Letterman may not have topped Leno in the ratings after 1995; but by striking out from the safety of his 12:30 Late Night time slot in 1993 – and creating his own show – he found more success.  In the process, he’s become the cornerstone for two late night franchises. Not even Carson could say that.

9. Don’t take yourself too seriously. From goofy hair to the gap between his front teeth, Letterman has never been shy about cracking jokes at his own expense. The occasional rough edge is much easier for others to stomach when you make yourself the target now and then.

8. Everyone has a story (and a joke) to tell. With non-celebrity guests – from audience members to kids who won science contests – Letterman really shined, showing genuine interest in what they had to say. He turned his neighbors around the Ed Sullivan Theater into stars. Being generous with the spotlight made Dave look better in the end.

7. Don’t be intimidated by anyone. …And when the person sharing the spotlight thought too much of themselves, Letterman was never afraid to knock them down a peg or two. (Even big stars like Madonna and Cher.)

6. There is such a thing as good-natured cynicism. Each week, Family Guy does a send-up of the sitcom family trope. The characters assault each other verbally, emotionally, and physically. It’s funny, but you wouldn’t say it’s rewarding. Letterman may have been caustic and sarcastic, but at least you knew there was always a smile on the other side of it.

5. Be respectful. When Letterman left NBC, he also left the blazers-and-sneakers look behind; he understood the investment CBS made in him (a $14 million per year contract) and wanted to at least look nice. That shows a level of respect that isn’t readily apparent in the irreverance. It extended to the audience, too. Daniel Kellison, the segment producer for the infamous 1994 Madonna interview wrote about Letterman’s real problem with the Material Girl’s f-bombs: “He always understood the privilege that came with the ability to broadcast, and the responsibility that accompanied it. Ratings and press were less a consideration.”

4. Rely on your team. Paul Shaffer said that Letterman told him from the beginning to jump in with comments anytime – whether it was during the monologue, during an interview, anywhere. Stage hands, producers, directors, writers, and staff all found themselves on the air. Letterman understood what he did was nothing special, and that talent was everywhere around him.

3. Great things can come from heartbreak. As mentioned above, Letterman is a late night legacy on two different networks, and at two different time slots. None of it could have happened without the crushing disappointment of losing his dream job. Sometimes the bad breaks work out. Everything happens for a reason.

2. Remember how lucky you are. As Letterman himself said, “I cannot sing, dance, or act. What else would I be but a talk show host?”

1. Have fun. I couldn’t tell you exactly when it happened, but my all-time favorite memory came when Letterman, in the middle of a monologue or a bit, called out to no one in particular, “Who has more fun than we do?” Dutifully, Shaffer enthusiastically hollered from off camera, “Nobody, Dave!” It was a small, throw-away moment that didn’t seem rehearsed. Few people probably gave a second thought to it two minutes after it happened, let alone in the decades since.

Yet it always stuck with me as the epitome of Letterman’s attitude toward his own show. Even when the jokes were bombing or the guests were lame, it seemed like Dave and Company understood that there would always be another show. At least until tonight.

This may be the most important lasting lesson of the David Letterman era. In every office I have ever worked at in my professional life, I have, at some particularly tense or busy time, called out loudly, “Who has more fun than we do?” The answer has always come back (from folks I’m certain weren’t avid Letterman fans): “Nobody!” Without fail.

Johnny Carson might have invented late night television as we know it. Jay Leno might have bested him in the ratings. Jimmy Fallon might have merged the TV and internet age better than anyone.

But who had more fun than David Letterman?

Business, Politics and Grassroots

#RaceTogether RIP

One week after uniting America in laughter, Starbucks shut down its #RaceTogether effort.

The coffee giant’s white CEO thought it would be a good idea for its busy baristas to slow up the lines to “start a conversation” about race relations in America.

“Start a conversation”?

How tone deaf can you be? Dr. Martin Luther King Jr. was shot dead, protesters were sprayed with fire hoses, and churches were firebombed – but thank goodness Starbucks is here to finally “start the conversation,” right? As silly as the concept is, it’s also amazingly arrogant.

And the poor Starbucks employees were right in the crosshairs on this. Imagine being a 17-year-old, suburban, white barista trying to “start a conversation” with a 60-year-old black man, who might have had to deal with segregation, busing, intolerance, and prejudice. The normally inane Gawker had a pretty accurate postmortem upon finding the internal memo preparing Starbucks staff for the campaign:

Not only, if you are a Starbucks employee, must you make coffee all day with the efficiency of a machine while dealing with entitled dickhead customers. You must also—at least this week—watch a video of your CEO talking about race, print out a USA Today ad, hand out stickers, then remove the original ad and replace it with a special insert. All so that you can “help foster empathy and common understanding in the country” as “the country faces ongoing racial tension.”

If you’re lucky, you make $9 an hour. Sounds great.

The worst part about Starbucks’s campaign was the complete ignorance of what the customer wanted. As JC Penney has found, trying to change your customers’ preferences is usually a bad idea. No one like getting told what to thing – especially by someone you’re paying to feed you caffeine.

Starbucks may have had their heart in the right place, but someone really should have stood up to CEO Howard Schultz and told him this was ticketed for disaster.

Business, Politics and Grassroots

We don’t teach kids about financial democracy

An article in the Economist says that activist investors are good for a public company. In making the case, it frames publicly traded companies as organs of democracy:

AS INVENTIONS go, the public company is one of capitalism’s greatest. Initial public offerings promote innovation, by providing an exit route for entrepreneurs; being listed makes a firm open to scrutiny; and ordinary people have a chance to invest in capitalism’s wealth-creating machines.  …Activist hedge funds take small stakes in firms and act like political campaigners, trying to win other shareholders’ support for their demands: representation on companies’ boards, cost-cutting, spin-offs and returning cash to shareholders.

These are good points, specifically the idea that average people have access to big business. Naturally, the problem is that any stock purchase is a gamble, and that the “ordinary people” referenced above might not understand the risk and would lose savings.

Our answer to that, culturally, has been to dissuade investment. We surrender the world of high finance to the images of Patrick Bateman and Gordon Gekko because they make convenient movie characters, while our schools do little to teach people how to build an investment portfolio over time.

When politicians express concern about America’s widening wealth gap, the answers always seem to be income-based: Proposals tend to include increasing the minimum wage or raising tax earners who make more than $250,000 per year. These are placebo solutions. Wealth isn’t about earnings, but savings and investment. Since lower-income earners have fewer opportunities to do that (with less money to save and invest), wouldn’t the smart policy solution be to help them maximize those opportunities?

Part of that is learning how publicly traded companies work, and understanding the shareholder’s rights and privileges. Civics classes teach us that we each have a vote and a right to speak out about our government – and that if we have some sort of beef, we can organize and change things with enough time and effort. Similar lessons about publicly traded companies are, unfortunately rare.

Business, media, Politics and Grassroots

RIP Black Friday. Cyber Monday, you’re next!

Black Friday shopping was down. Cyber Monday shopping was up. By now, plenty of pundits have pointed out the obvious: that the shift reflects the dominance of online, on-demand shopping over fighting crowds to get into brick and mortar stores. No surprise there.

This isn’t a condition, though, it’s a symptom of humanity’s desire for convenience. And that means you can expect Cyber Monday to change, too.

Black Friday became a big shopping day because of its convenience. Most Americans either had an off day or a very light work day on the Friday after Thanksgiving, which made a quick trip to the mall more convenient. In recent years (particularly the last decade or so), stores have highlighted the shopping experience – such as getting up early to get great deals. But the convenience of online shopping – which can be done anywhere and at any time – trumps the convenience of an off day.

The idea behind Cyber Monday comes from an antiquated shopping idea, too. Ten years ago, the fastest and most reliable connection most Americans has to the internet was from the desktop computer they used at work. Home internet was often dial-up or DSL, and the smartphone revolution was still a few years away. But as this infographic demonstrates, shoppers have followed the trends of residential and handheld internet. Smartphone and tablet users grew from 30% of all online shopping traffic in 2013 to 41% this year. Perhaps even more notable, the bulk of shopping took place in the late evening, after 9:00 p.m.

The popularity of the online option is unquestionable. But just as the idea of Black Friday capitalizes on the idea of shoppers being in a certain place at a certain time, so too does the idea of Cyber Monday. The next inevitable move is for shoppers to abandon the idea of Cyber Monday, except as a promotional gimmick.

In fact, this trend has already started. Many online retailers have dubbed this “cyber week,” a nod to the fact that shoppers have plenty of flexibility. Online shopping isn’t going anywhere and should continue to eclipse in-store sales, but don’t be surprised if the concept of “Cyber Monday” evaporates from pop culture long before “Black Friday.”

Business, Interesting Reading, media, Politics and Grassroots

Why Google wins

Google is one of the most ubiquitous companies on Earth.  It’s not just where we often start out looking for information (even if we end at Wikipedia), it’s in our emails, phones, tablets, and browsers.  Google’s success comes from mining data from all those points and selling advertising based on that information.  It’s products are easy to use and useful.

But when Google makes its point that you should use their products, they don’t mention all that.  They don’t say, “Hey, everyone’s using Google!  Get your Google today!”  They don’t even present their products as superior to their competitors – a strategy others have tried.

Google tells a story.  Check out this video of a lost Indian boy who used Google to find his long-lost family:

With attention and political energy turning to the 2014 election over the next six months, this is a good concept to keep in mind.