Originally Written: 1/31/13

Title:  Nintendo Lowers Forecast for Wii U Sales

Source:  Tabuchi, Hiroko, NYTimes.com (January 30, 2013) http://www.nytimes.com/2013/01/31/technology/nintendo-warns-of-weak-wii-u-sales.html?ref=technology&_r=0

Summary:  After only two months since the initial release of the Wii U game console, the newest device from Nintendo, sales projections have fallen due to lack of market response.  Nintendo hasn’t launched a full gaming system since 2006 when the revolutionizing Wii entertainment system brought Nintendo back into competition with Microsoft’s Xbox and Sony’s Playstation. 

Nintendo’s latest numbers show almost a 30 percent decrease in projection of units sold, from 5.5 million to 3.06 million. 

Analysis:  Personally I’m not much of a gamer and haven’t purchased a gaming console since the original Nintendo.  However, Forbes projects that the global industry will increase from $67 billion in 2012 to $82 billion in 2017.  If Nintendo cannot capitalize on this future growth projection, based on their pipeline of product launches, a new business model should be addressed. 

There are two major business impacts that are significant for Nintendo.  The first is loss of network effects as outlined in Chapter 6 of the textbook.  When Nintendo introduced the Wii system they were expanding by redefining the market.  At that time they saw an opportunity in an untapped market and seized the opportunity to capture demographics that weren't traditionally targeted by the gaming industry.  As one of the first gaming consoles they've had a loyal following since the original Nintendo.  However, underperforming sales indicate that either a new market was not reached, previous users did not welcome the new product, or a combination of all of the above.    

The second major impact the drop in sales indicate is changing trends in consumer behavior.  When Nintendo launched their handheld gaming system, the 3DS in 2011, sales also did not reach forecast.  Instead of taking the research learned from the subpar launch, Nintendo is choosing not to respond to consumer’s shift in preference to gaming on smartphones.    

As CNET pointed out in another article on Nintendo’s performance, “Nintendo dealt with a similar issue when it launched its 3DS in 2011.  However, the company was able to boost demand and increase sales with a price cut.  It appears that, for now, Nintendo won’t follow that plan with the Wii U.” 

Overall I believe there is still room in the market for new products from Nintendo but not how they have recently been introduced.  First, I think they need to focus on the consumer and find out what types of product they want, not what Nintendo thinks they might want.  As outlined above, Nintendo did an excellent job of finding new consumers with unmet needs when the Wii system was launched.  Nintendo can capitalize on that success again if they create products people want. 

Second, I think Nintendo should take a look at the mobile app industry and test the waters in creating a product available on the majority of smartphones.  Developers could create a product that Nintendo could test on iTunes and Google Play for a fraction of the cost it takes to develop an entire console system.  Nintendo could charge a small premium (or even download for free) and test the success.  If the app was a success they could look at new opportunities and if the app failed they would know not to proceed in that direction.  In today’s interconnected ways it’s critical that companies develop complementary goods that have the opportunity to extend to the masses. 

 

Originally Written: 1/17/13

Title:  Facebook vs. Google: It's On in Search

Source:  CNNMoney http://tech.fortune.cnn.com/2013/01/15/facebook-vs-google-its-on-in-search/?section=magazines_fortune&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmagazines_fortune+%28Fortune+Magazine%29

Summary:  Facebook introduces the new Graph Search on Tuesday, January 15, 2013 in an attempt to capitalize on Google’s dominance in search.  Beta testing is limited to select Facebook users for now.     

Analysis:  It wasn’t a new “Facebook” phone or competing IOS system that got the attention of Facebooker’s on Tuesday, but the announcement of Facebook’s new Graph Search that has people talking.  In an effort to chip away Google’s share of web based searches Facebook has created their own search feature for people to find and discover things within their own social network. 

As bloggers around the world watched from Facebook’s Headquarters, Marc Zuckerberg announced Facebook’s attempt at keeping some search items within the Facebook social domain.  Until now, users were limited to searching for people or business pages via the most popular social network.  However, Tuesday’s unveil highlighted to users that in addition to people, photos, interests, and places could now be searched via each user’s friends and friends of friends. 

If users adapt and is proven successful, this could lead to potential new revenue streams for the newly public company.  As Marc quoted, “This could potentially be a business over time.”  For now the Graph Search feature does not incorporate any ads in the user experience.  However, only time will tell if the new feature will be proven financially receptive. 

For now, users can request to be put on the beta waiting list to try the feature out.  Only time will tell how the 1+ billion users feel about the new feature. 

This will greatly impact user’s ability to determine where and what they would like to search for.  Instead of a typical Google web search, users can determine what their friends are interested in, where they recommend, and connect or reconnect in a unique manner.  Facebook is capitalizing on the data they have from their user base to continue to embrace word of mouth recommendations. 

At the time of the announcement, Facebook’s stock price increased minimally.  

I realize it’s been MONTHS since my last blog post which brings me two immediate thoughts.  One, damn where did the time go and how did it go so fast?  Two, now that I've graduated it’s time to get back at it.  Since my last post there’s been a New Year (well now seven months into it but who’s counting), two additional quarters of school, and one welcomed graduation from DePaul University's Kellstadt Graduate School of Business with a double concentration in Strategy, Execution  and Valuation and Integrated Marketing Communications with Distinction.  

So stay tuned… I’ll be providing some thoughts, insights, and opinions that happened during my last two quarters as well as some new content now that I can read something other than textbooks again!  

Yap Me!

 I was fortunate enough to recently tour 1871, Chicago's hottest co-working space for the city's newest digital startups.  Needless to say I was in awe of the buzz that surrounded these young entrepreneurs and the cube-less working space they call their "office."  
While there I got to chat with a few of the new startups and one that I thought was awesomely innovative is a company called AdYapper.  AdYapper has built a platform for advertisers to turn their normal display ads into social experiences with two way communications.  Genius right?  We have all seen ads that were either #awesome or #fail and the only way we had to engage with them was to share with our own circle of influencers.  Not anymore.  Now consumers can interact directly with the ad and provide advertisers and other social networks with valuable information.  

The best part about this - it's easy to implement AND it means more targeted advertising for brands looking to optimize budgets.  AdYapper's tag is embedded directly into the display creative and published across networks.  Once the tag is installed brands can access real-time metrics, community submissions and competitive data at any time.

Yap Widget in Lower Right

Social Conversation with Total Comments (Yaps)

This social way of incorporating conversations into ads is going to change the game of display advertising as we know it. Brands will love it for the deep analytics and optimization of budgets while consumers will love the ability to give real-time feedback and participate in a dialogue with brands to form meaningful conversations that lead to better advertising overall.  

1871 in the Historic Merchandise Mart 

Target and Neiman Marcus: Happy Holidays!

Although Target was subject to my criticism last week with their pre-Halloween holiday advertising strategy, I commend them for leading the forefront in blending mass merchants with luxury for Holiday 2012: Target + Neiman Marcus available in both retailers December 1, 2012.  Designer partnerships are not a new venture for Target and certainly not new for Neiman's but this collaboration is more than anything they've ever done and one that I predict will bring in mass dollars this holiday season.  

This season Target did the unthinkable - partner with another retailer!  In a time where every retailer across the board is battling for market share Target and Neiman's realized an opportunity to expand each retailer's target demos by collaborating in a way that brings value to all shoppers.  

With names like Alice + Olivia, Brian Atwood, Carolina Herrera, Diane von Furstenberg, and Marc Jacobs, Target and Neiman's are giving each of their shoppers something mutually beneficial.  For Target, it's providing Luxury to the aspirational shopper.  It's the mom who has always been in the forefront of fashion but now has a family and may not be able to shop the way she once did.  For Neiman's, it's the luxury consumer who may have the money but looking at value options to ease the pain of the current economy.

We shall see how this partnership plays out and if successful, which retailers are the next to follow in their footsteps.  

MyLowe's Revamped Loyalty Program Just in Time for Holiday 2012

While catching up on some DVR this past weekend the all dreaded came true... I was subjected to my first holiday commercial 17 days before Halloween by Target, one of my favorite retailers!  Working for a real estate company specifically focusing on retail may have me a bit more trained than the average eye.  However, as a consumer, I am not very appreciative of watching holiday ads pre-Halloween.  

Some retailers are pushing for customers holiday mind share and share of wallet in a more discrete way.  Been in a situation where paint was thrown away and now need to do some touch ups?  Out shopping and can't remember the size of the living room blinds?  Or how about the aerator is shot in the kitchen sink and can't remember exactly what size is needed?     

One of the most interesting things I've seen this week in interactive marketing was the launch of MyLowe's from Lowe's.  MyLowe's encourages shoppers to sign up (or sign in with existing account), register their loyalty card and track purchases made within the store.  What the program promises is to ensure that every single purchase made is tracked to create ease of mind for future purchases along with exclusive discounts for being a member.  This isn't something that's revolutionary to a loyalty program but does provide something different to the consumer (from my loyalty program experience) while giving Lowe's a point of differentiation.  

The launch of the program is timed impeccably with the all anticipated fourth quarter sales that are critical to a retailer's success.  To encourage participation, Lowe's promises to share an exclusive sneak peek when a consumer register's their card by October 31, 2012.   

If I lived in the burbs and had continuous home improvement projects this would be a lifesaver.  However, at this point, my cozy condo is pretty self sufficient.  

GQ & Nordstrom: A Match Made In Heaven

This week's Internet superstars post features a collaboration between GQ and Nordstrom.  These two brands have put together an integrated program that I have been wanting for years.  

One may look at this post and wonder the significance of what it means.  First, these are two brands that I personally love and follow for their innovative activity in the digital space.  Two, I understand the dynamic of collaborating with two very iconic brands and the amount of work that goes into a partnership of this caliber.  

The two brands have created an experience that is completely seamless to the consumer which should be the goal for any brands focusing on an online presence.  For years retailers have partnered with traditional print publications but the disconnect was the integration of where a consumer could actually purchase the product featured on the glossy pages of the trendy media outlet.  

Here's why it works:

1. A subscriber of GQ magazine (or online GQ advocate) sees something of interest in an advance month's publication.
2. The subscriber visits GQ.com for more info.  
3. The consumer find the GQ Selects area and clicks on the product library. 
4. Consumers can scroll through the featured images and when something of interest is appealing can click to a direct link through to Nordstrom to purchase the product.
5. That product is co-branded ensuring that a consumer recognized the partnership between the two brands.       

Most partnerships I've seen are either unsuccessful in terms of publication release date and product arrival in retail or do not make it easy on the consumer to click directly through to path of purchase.  I applaud both parties for making this easy on consumers and creating an online experience I hope many other retailers and publications follow as best practices.