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. 

 

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.   

The Insider's Guide to Social Video

The other day, I was honored to be asked to speak on a panel with other brand marketers at the Brand Innovators Chicago Summit.  The goal was to provide a perspective on how to utilize online video to create entertaining and engaging content.  More importantly how do we, as marketers, get our communities to share these videos with their audiences?  

If you're in marketing and working in the digital space, there's no doubt that video has been a topic of conversation at some point.  It's hard to keep track of how quickly the entire social landscape is changing let alone focus on one platform so I wanted to share some quick highlights I found while researching the most recent stats.

The following are from comScore's August 2012 data:

• 188 M U.S. Internet users who watched video content in August
• 37.7 B, yes Billion, online content videos
• 9.5 M video ads viewed

So, the question that now remains is not why we have to put video content out there but what?  

First, the video has to strike an emotion and be on target with the messaging your trying to communicate with your audience.  It could be fear, joy, surprise, sadness, whatever but the point is that it must resonate with people to be memorable.  Second, if you want to make a video "viral" it needs to be supported with paid media to capitalize on organic shares and views.  I'd say less than 1% of all videos truly go viral through 100% word of mouth.  

A few of my favorites are listed below.  Happy viewing and feel free to share!

DollarShaveClub.com - Our Blades are F***ing Great

The Hottest @ Abercrombie & Fitch Guys, "Call Me Maybe" by Carly Rae Jepsen

Google Chrome: Dear Sophie

Oh Starbucks: How I Love You So Much

For those of you that know me, it comes as no surprise that I'm a huge Starbucks fan and have raved about their loyalty program and app since its launch.  As I mentioned in the Walgreens post, Starbucks pioneered the use of the barcode scanner on a mobile device to make using the loyalty program a breeze.  

Perusing through my emails this morning, I opened one from Starbucks announcing new features to the program that make it faster, tastier and quicker than before.  Make your calendars for Tuesday, October 16 to take advantage of these new benefits.  

• Users now only have to accumulate 12 stars as opposed to 15.
• Stars will now include purchases on both food AND drink.  
• The reward is loaded immediately onto your app (or physical card for those non-app users) meaning we no longer have to wait for snail mail! 

With the changes happening less than a week after Apple announced their new iPhone 5 I can't help but applaud Starbucks on the strategic timing of their upgrades.  According to CNET, over 2 million orders have already placed.  Coincidence?  I think not.  

Walgreens Launches Loyalty Program

Say it's finally so!  As I perused my Facebook news feed over lunch I came across a post from Walgreens announcing their new loyalty program, Balanced Rewards.  I'm sure most people could care less but I may have flashed a little smile.  

One might ask why does this make me happy?  For one, I'm thrilled that I'll now start to accumulate free money when I have to purchase those "must haves" like toilet paper and shampoo which are frequently from Walgreens.  I mean who wouldn't want to be rewarded when you literally pay money to put trash in garbage bags to be thrown out?!  

All joking aside, Walgreens is a retailer who's made leaps and bounds in the social space and it's great to see a loyalty program being integrated into their social efforts.  When I opened my Walgreens app on my iPhone sign up consisted of entering a zip, phone number, and DOB while the rest of my registration info pulled from my existing profile.  The best part is that unlike other loyalty programs who may have been first to market, you don't have to have another key fob on the ring.  Much like Starbucks, Walgreens has incorporated a barcode that can be scanned right from your smartphone.  

The one downside of the launch is that it appears the program has not rolled out into their stores yet.  On the flipside, kudos to Walgreens for generating the buzz early.  I'll let you know if my smile comes back in store in 10 days.