Sunday, April 12, 2009

For The Sake Of Consistency...

...I have decided to further analyze the appealing nature and trend of "sample sale" online fashion retail companies, a la the previously discussed Gilt Groupe, as well as many other websites that have followed suit; namely, RueLaLa.

New slogan: "At least thanks to Ruelala you won't be this deep in debt"...? Work in progress.

RueLala has the same structure as in that it is a subscription-based, high-end fashion retail company that provides customers with a selection of a few designer's collections at a staggering discount (50% or more) for a brief amount of time (no more than three days). RueLala uses fixed, promotional pricing for the merchandise sold through their website; they mark their merchandise at a price that could not be found at the designer's sale rack, but limit the offer for a short period of time, as a means to create incentive within the members to invest in the product before the opportunity is lost. Also, the amount of inventory is limited, and many experienced RueLala members know that products sell out way before the sale has ended. By limiting the amount of merchandise as well as the amount of time that the fixed promotionally discounted prices are available, RueLala is creating a limited supply, high-demand environment which increases the likelihood of consumers purchasing the product.

Designer sunglasses+over 50% off+only one pair left= MUST. BUY. NOW.

Considering that this company is considerably green in the online retail industry, actual figures are not readily accessible. Regardless, its pricing plan seems to be effective in that there has been lots of consumer response, whether it be through blogs, the increasing amount of membership, and the attention of the media. They are, in a sense, doing designers and their clients a favor by taking unprofitable merchandise of their hands for a small price and then marking it at a price that is profitable for them, and incredibly appealing to consumers. That way, everybody wins. Considering the success of this business model and the increasing amount of companies utilizing it, I'm sure that RueLala won't be shutting down anytime soon. What I am curious about, however, is how the saturation of this type of online business will effect companies such as Gilt and RueLala's profits in the long term. It will be interesting to see if there is room in the webisphere for all of them, or will they have to stomp each other down with their 70% markoff Christian Louboutin heels. Only time will tell...

Thursday, April 2, 2009

I Love Pandora.

One website that I swear by that is responsible for a good percentage of my music collection is is a pureplay website that acts as an online radio station, however it is very different in an important way. With Pandora, the user types in a favorite music artist or song, and creates a "station" consisting of songs similar to and based around aspects of the user's entry. Pandora utilizes the technology known as the Music Genome Project, which is explained by Pandora as:

"the most sophisticated taxonomy of musical information ever collected. It represents over eight years of analysis by our trained team of musicologists, and spans everything from this past Tuesday's new releases all the way back to the Renaissance and Classical music.

Each song in the Music Genome Project is analyzed using up to 400 distinct musical characteristics by a trained music analyst. These attributes capture not only the musical identity of a song, but also the many significant qualities that are relevant to understanding the musical preferences of listeners. The typical music analyst working on the Music Genome Project has a four-year degree in music theory, composition or performance, has passed through a selective screening process and has completed intensive training in the Music Genome's rigorous and precise methodology. To qualify for the work, analysts must have a firm grounding in music theory, including familiarity with a wide range of styles and sounds. All analysis is done on location."

This technology is incredible in its accuracy and its ability to span the breadth of genres and artist repertiore. I am a big fan of obscure music and artists, and somehow no matter how "hole-in-the-wall" my entry is, they always find a way to find related work that I have never heard of.
Moreover, if there is a song that a user doesn't like, one can press the thumbs-down, "I don't like this" button and the playlist will move forward to the next song. Due to copyright and licensing laws, however, the user can only skip approximately three songs within an hour. But, one can get around this by creating another channel based on another favorite song or artist. And, one can create an unlimited amount of music channels. Amazing.

Also, if you like a song or an artist, they will save it on the playlist to be played repeatedly. There is also a menu under the song that is playing with a plethora of options: "don't play this song for a month," "why was this song selected?", "Move song to another location,"Bookmark the song/artist, and "Buy song from iTunes/Amazon CD/Amazon mp3."

As if that's not enough, since the last time I have visited the site (which has been no longer than three days), there are options to alter the channel, such as "add variety" by adding another favorite song/artist to further narrow down the song selection pool, "find other fans of this song/artist," or "share this station with a friend."

It is obvious that Pandora is at the forefront of online music technology and continue to maintain their reputation. I will remain to be a loyal and consistently intrigued customer.

Thursday, March 19, 2009

This Website Has Me Feelin' Less Gilt-y About My Addiction

I wish I could quit you.

Two years ago, I was invited by my fellow fashion devotee to a website that further fuels the shopping addict inside of me. is a pure play retail website that sells high-end designer clothing and luxury labels at “sample sale” prices (up to 70% of retail price). The site is invite-only; current members invite friends by sending them e-vites with a link to to activate their membership. Members receive emails every Monday summarizing the sales that will occur throughout the week, and what dates and times they will be commencing. The company works with over 200 women’s, men’s, children’s and home brands and labels, and each day features a couple brands’ merchandise for sale for a limited time of 36 hours, or occasionally, until the merchandise runs out. Members are able to purchase up to 10 items at a time, and returns are given store credit, much like any other store’s policies, and if you ship it outside of New York State there is no sales tax! I digress on the minute details of that make me all warm and fuzzy inside, but anyway...

The formal business name of the company is Gilt Groupe, which was founded by college friends Alexis Maybank, whose past accomplishments include serving as General Manager and business Development Director for AOL's ecommerce businesses, and also was one of the driving forces behing eBay’s expansion; and Alexandra Wilkis Wilson, who has worked for multiple luxury brands including Bulgari and Louis Vuitton. Based in the Chelsea neighborhood of New York City, Gilt Groupe, with the help of venture capitalist firm Matrix Partners, launched in 2007, and has had and continues to see a steady increase in membership and publicity since its inception.

Ignore the blue line: is another luxury discount retail website that is on the rise--but that is neither here nor there.

Gilt Groupe has capitalized on a concept that is somewhat lacking in the webosphere; luxury and designer companies have steered away from selling merchandise online due to the possibility of destroying the quintessential allure of luxury goods; exclusivity. However, by not utilizing the online market, luxury brands were missing a grand opportunity to rid them of their less successful merchandise inventory. As told to, Maybank explains, “Existing online channels weren't protective of the fashion and luxury brands, resulting in a bit of a heartburn for those companies.” strategically accomplished this uncharted e-territory by using business models that maintain the prestige of the brands while allowing consumers to purchase luxury items at sample sale prices. uses both subscription and virtual merchant business models. Through using the subscription business model, more particularly invitation-only, allows the website to have exclusivity by using established members to recruit people whom they think will appreciate the website. Therefore, the membership community itself expands the consumer base with people fitting the target demographic the company looks to reach, meanwhile spreading word-of-mouth through the “right crowds” about the website and increasing people’s desire to become a part of it.

Gilt Groupe’s use of the virtual merchant model is also quite strategic and plays upon the company’s strengths; the established reputations of the people that make up Gilt Groupe make for a prime breeding ground of building strong, loyal relationships with luxury companies and designers and they’re willingness to sell their inventory directly to Gilt Groupe without revenue sharing that would be present in an affiliate model. Gilt Groupe has also defeated the notion that with online retailing comes the death of luxury boutiques. Retail anaylist Marshal Cohen reassures that “ten years ago they said the Internet would replace traditional brick-and-mortar. It didn't quite turn out that way, and both have learned to coexist.” It hasn’t fazed designers and companies to want to do business with Gilt Groupe; co-founder Wilkis Wilson admits that “I have so many brands banging down our door that I have to say no.”

In terms of measuring Gilt Groupe's performance, there are two very vital elements that create Gilt Groupe's success; membership rate, and the amount of revenue. When looking at the unique visitors chart shown above, it seems as if although membership is increasing, other similar websites to jump on the bandwagon are seeing higher numbers. This is where I see the whole "luxury" marketing and business tactics as a hinderance to success in numbers; the whole idea of exclusivity through their lack of use of traditional advertising and focusing more on word-of-Chanel lip gloss shelacked mouth may be a cause in their lagging behind their competitors in terms of accumulating memberships. However, the amount of revenue that the company is accumulating from retail is the true telling of the success of the actual purpose of the website: selling goods. Window shopping doesn't count in the real world, where it's "all about the Benjamins."

=more Benjamins than I will be making as a college graduate next year.

Wednesday, February 25, 2009

Holy Illusions of Privilege!

"Not cool, France. Not cool."

While updating and educating myself on who is stealing what from whom these days, I found out that even national governments cannot even get away with misusing and violating us lowly common folk’s creative materia
l. Last week, Brooklyn-based indie rock band MGMT decided to take legal action against the French political party Union pour un Mouvement Populaire, or UMP, claiming copyright infringement.

Allegedly, the French equivalent to the U.S.’s Republican Party has been using the song “Kids,”a popular song off of MGMT’s most recent album, during their campaign without permission. The current president of France, Nicolas Sarkozy, represents the UMP party, and condoned the usage of the song during party meetings including its national congress in January, during a field trip by
the President himself, and in two official political videos on the UMP website. The UMP holds the majority of seats in the French government, not to mention the presidency as well. What is most ironic about this case is that the UMP is known for its strict views on filesharing and is at the forefront for prohibiting the infringement of creative copyright. Considering their stance on this public issue, it came as a shock to the MGMT camp that although the UMP’s public relations representative willingly admitted to using the song without permission, they stated that it was “unintentional” and offered the band nominal damages of one euro. MGMT’s camp rejected this ludicrous offer, and the band’s lawyer, Isabelle Wekstein, expressed their disgust to American Free Press: "This offer is disrespectful of the rights of artists and authors. It is insulting...we are dealing with acts of counterfeiting, an infringement of intellectual property."

Also, in the most unfortunate of timing, the UMP has planned to present an anti-filesharing bill to tighten the laws regarding the usage of peer-to-peer software, among other things, to the national assembly in early March. Wekstein addressed this irony to French newspaper Le Monde: "It seems that those who led the charge against internet users are not the most respectful of copyright." Interesting.

What does the center-right-winged party have to say for itself? The General Secretary of the UMP, Xavier Bertrand, has issued a response to MGMT’s charges, saying "The UMP is very respectful of copyright. Compensation has to be expected... and we are presently looking at whether the band was fairly compensated." What Bertrand is referring to is the review of the band’s relationship with SACEM, which is a French creative rights agency, its main purpose being "to collect payments of authors’ rights and redistribute them to the original authors and composers and the publishers." The notion is that the usage of the song was arranged with SACEM, and MGMT is to be awarded their royalties through the organization itself. Wekstein does recognize that the UMP paid the standard fee of 53 euros to the organization, however, she stated that the payment does not cover the continual use of the song in multiple situations and multiple channels following the initial use of the song. Ergo, the MGMT camp will continue pursuing the case.

Taking a step back and looking at this situation from a legal and ethical standpoint, whether the content is digital or not, MGMT’s material is not an invention nor is it a term or image that represents the band for
marketing purposes, but is an issue of creative expression. Therefore, MGMT’s songs could not be patented nor trademarked, but are copyrighted. Under copyright law established by the Copyright Act of 1976, sound recordings are considered a form of expression and therefore obtain protection of copyright legislation. Also, materials of creative expression do not necessarily have to be officially registered in order for them to be protected under copyright laws. Once the creative material is finished, the creators become the owners of the material, and therefore obtain the rights to reproduce, distribute, perform, and create derivate versions of the material. Other parties even have to receive permission from the owner of the creative material in order to “remix” (to take the essence of the material and alter it to create another product) the original work.

The defense that a party can utilize to justify the usage another’s creative material is fair use. If the case is settled out of court, the French government will have to prove that the use of MGMT’s song, “Kids,” was within the boundaries of fair use.
Fair use constitutes using creative materials for criticism, comment, news reporting, teaching, scholarship, and research. Also, there are many factors that considered when determining fair use defense; the purpose of use (whether it is for commercial gain or non-profit), the nature of the copyrighted work (whether it is factual or fiction), the amount of the copyrighted work that is used (whether it is partial or whole), and the effect on the owner’s market share (whether or not it has caused the owners to lose revenue).

The UMP party could make the weak argument in court that they didn’t technically use the song for commercial gain (although it is noted that the song is one of the most popular songs amongst the young adult population, which may give them a non-monetary gain of reputation amongst that particular market) and that it hasn’t been proven that it has caused MGMT to lose any revenue. However, the fact that they used the song for a purpose that can’t be categorized under the bases of fair use, let alone that they used the song in its entirety multiple times without paying the amount deserved to owners of the material, could be enough to make their argument moot. Regardless of the case’s outcome (which, in my opinion, seems like it will end in favor of the MGMT camp), the UMP is dug itself into an embarrassing public relations ditch, has done more harm than good in its efforts to attract the young adult’s favor, and has damaged the party’s reputation and whatever image of honor and legitimacy that they have.

Guess you’re not that cool with the “Kids,” Sarkozy.

Friday, January 30, 2009

Plus, Mongolian Shoe BBQ sounds like it tastes better.

After wasting countless amounts of hours using NikeID as a means of entertainment (and sadly, procrastination), I now have to look at one of my used-to-be favorite things to do online in a completely different way; not as a consumer, but as a marketing whiz. I used to mess around with NikeID all the time in its first stages, although I will admit that I have never visited Puma’s Mongolian Shoe BBQ website. However, once I heard the name for the site, it definitely intrigued me and got me interested to see what the website was all about. 

From a marketing perspective, naming Puma’s custom shoe brand Mongolian Shoe BBQ was definitely an interesting marketing tactic; it’s a unique name that doesn’t have any relation to or any resemblance of any other brand name in the market and therefore establishes themselves as something unique, different, and edgy. Not only does the brand name contribute a differentiating quality to the brand, it also is a brand name that is very difficult to forget when a consumer hears it for the first time, therefore upping the likelihood for good brand recall amongst potential customers. Puma also made the interesting decision to almost completely disassociate their customized shoe brand from that of the parent company; the brand image and marketing approaches do not resemble that of the parent company’s in the least besides the products having the same logo and brand name on the actual products themselves. Also, the company’s brand image and marketing tactics are more abstract, alternative, and modern in terms of its artistic approach, which is good in that it is progressive and keeping up with the trends of not only their target market of young adults, but also keeping up with the trends of online businesses and their websites as well. Their adoption of the Mongolian BBQ as their identity seems to carry over a little too strong however; the presence of the  concept seems to cloud the actual purpose of the website as marketing, which is to educate the consumer about the products and not to confuse them to actually believe that it is a website for a Mongolian BBQ restaurant. However, for those that are keen enough to get over that millisecond of confusion, I think that Puma’s approach to their customized shoe sub-brand is quite fresh, progressive, and most importantly (in my opinion), quite creative.

Nike, on the other hand, incorporates their own company identity into their customized shoe brand, NikeID. NikeID incorporates a very similar brand image, website design, and marketing as the parent company. This could be a beneficial move for Nike in that the company is very widely known and has a strong, stable reputation that has been successful throughout its lifetime; everything that has Nike’s swoop stamp on it, or is even associated with the brand (i.e. Nike and Apple’s partnership in the Nike+ product line) seems to be an immediate success. Also, NikeID’s marketing and brand image concepts, like that of its parent company, are a little more mainstream and more appealing to the general population than Mongolian Shoe BBQ’s abstract, unique brand image; the look is sleek and seemingly simple, which may seem more approachable to consumers. Also, Nike creates products for almost any type of lifestyle and interest; they have established a reputation of providing shoes for almost every type of consumer need when it comes to athletic wear, whereas Puma is seen as being in the niche of European fashion footwear, or specializing in soccer and tennis shoes. By Nike using the strategy of branding their customized shoe line as a branch of their own existing brand, they are simultaneously attaching the company’s established reputation as well as its brand image. 

In terms of the actual experience of both of the companies’ online shoe customization companies, they both offer the same service in that any person can go onto the website, freely design the shoe of their choice through a step-by-step process, and purchase them to be sent to wherever the customer chooses. However, there are differences in the products, the price, and the design of the customization process that causes the customer’s experience to be different on one site than the other. 

Mongolian Shoe BBQ’s website starts off with a Flash intro that may be confusing, but it then goes on to the actual website where the customer is shown the options available to him or her, and is guided through the step-by-step process of customizing one’s own shoe. Simple windows are displayed with basic questions and with simple ways to answer them. For example, the first window that pops up to customize a shoe displays the three models of shoe the customer has to choose from in a blank, almost blueprint format, and the customer clicks a check in the box of the shoe of their choice. A downside that consumers might find in Mongolian Shoe BBQ is that they only have three shoe canvasses to choose from, however I believe that all three shoe canvasses have something for any consumer and are equally as stylish, therefore I do not have a problem with the amount of choices available. In the customization process, the actions and options are all displayed and marked accordingly, allowing for little to no confusion as to where to go to do any sort of customization. There are displays of the views the consumer can have by simply clicking on the display of the view of their choice, and there are always written messages to consumers alerting them about which step of the process they are in and what will be coming next. In terms of customization options, Puma has many different types of materials and patterns that are unique to its brand and the market itself. Once a customer is done, there are multiple options displayed at the bottom of the page; a customer can either create an account on the website (which is an easy, two-step, email and password system), save his or her design and move on to the next one, buy the customized shoe in an actual Puma store, add to an online “shopping cart” and make another, or buy the shoe immediately. Quite importantly, the graphics of the products are animated, however they look incredibly realistic so that the consumer has a better sense of how the actual product will turn out.  Mongolian Shoe BBQ’s most expensive shoe is $130 and the cheapest $100, and are delivered within 5-7 weeks. I believe that for the amount of customization a customer is able to do with the products, that the price and delivery timeframe are quite reasonable. 

Nike has a similar process in that it is step-by-step starting from the customer choosing the model and ending with a customized model of it, however, their website and the actual technology involved in it isn’t necessarily more advanced than that of Mongolian Shoe BBQ’s, it is just laid out in a more complicated way. Since my days of playing around the NikeID website, I have returned to find it quite cluttered and dysfunctional. The amount of choices available to the consumer is overwhelming, and are displayed in funky, crazy, customized colors instead of canvasses, which I believe is distracting from the shoe’s design. Once a customer has chosen their shoe model, they are taken to a customization page with overly simplistic buttons that have no indicators of which button means what and where to go to next. After stumbling around to find out how to customize, it only goes on to more complicated and hard-to navigate steps. NikeID also doesn’t display the shoe model prices upfront, which may be disconcerting to a price-sensitive customer who has no idea how much their design would cost if they decided to make one in the first place. I, for one, could not even customize one because whenever I chose a model, a window would pop up saying that the product was unavailable and would direct me to a page where ALL available products were displayed--mens, womens, kids, and apparel--which all ended up “not being available as well. NikeID also takes much more time to upload onto every page and to do anything for that matter, and customers may have to stop and reload to get to some pages. All in all, I feel that considering Nike’s reputation, NikeID’s clumsy layout and customer experience does not represent the company well. 

In summary, I believe that the analogy of Mongolian Shoe BBQ as Facebook and NikeID as MySpace is quite fitting. Mongolian Shoe BBQ, like Facebook, might not necessarily be the first of its kind in online shoe customization, however, seems to have created the more modern and effective way of developing their product. NikeID, like Myspace, may have been the first of its kind, but has gone overboard with the amount available to the customer and isn’t laid out in a customer-friendly way, almost as if they have lost control of their own product. I am actually very pleased with my experience on Mongolian Shoe BBQ’s website, and plan on purchasing my customized model of shoe, when I have enough expendable income that is...