Tuesday, December 2, 2003

Accelerating Acceleration One of the greatest benefits of weblogs is that I can continue to learn long after I've finished my schooling. We studied market penetration in our Consumer Behavior class, and I've often wondered if the bell curve for production adoption isn't skewed for some classes of products. VentureBlog thinks so, excerpts below: Many authors, from Everett Rogers to Geoffrey Moore to Malcom Gladwell, have studied the diffusion patterns and mechanisms of new product adoption. The classic representation of this pattern is the bell curve with equal sized early adopters and laggards on either side and the big mass in the middle. But numerous recent data points suggest the slope and overall size of the curve is changing in fundamental ways that will be meaningful to product developers and marketers going forward: The product uptake curve is accelerating The laggard market is disappearing -- Look for a rising class of never adopters. I would say his argument is that the laggard market is getting longer, not shorter! New products will either open big or get killed early -- Expect the consumer electronics business to look more and more like the movie business. It's not about technology any more -- Marketers who understand how to sell into a certain market trend will have increasingly more say than technologists who understand what can be developed. Early adopters will become a big enough group to serve on their own Consumers will be the real winners [VentureBlog] 3:54:09 PM    trackback []

We are shopping ourselves out of jobs This is a story about Vlasic selling gallon sized pickle jars at Walmart for under $3. A very interesting read: And so Vlasic's gallon jar of pickles went into every Wal-Mart, some 3,000 stores, at $2.97, a price so low that Vlasic and Wal-Mart were making only a penny or two on a jar, if that. It was showcased on big pallets near the front of stores. It was an abundance of abundance. "It was selling 80 jars a week, on average, in every store," says Young. Doesn't sound like much, until you do the math: That's 240,000 gallons of pickles, just in gallon jars, just at Wal-Mart, every week. Whole fields of cucumbers were heading out the door. For Vlasic, the gallon jar of pickles became what might be called a devastating success. "Quickly, it started cannibalizing our non-Wal-Mart business," says Young. "We saw consumers who used to buy the spears and the chips in supermarkets buying the Wal-Mart gallons. They'd eat a quarter of a jar and throw the thing away when they got moldy. A family can't eat them fast enough." The gallon jar reshaped Vlasic's pickle business: It chewed up the profit margin of the business with Wal-Mart, and of pickles generally. Procurement had to scramble to find enough pickles to fill the gallons, but the volume gave Vlasic strong sales numbers, strong growth numbers, and a powerful place in the world of pickles at Wal-Mart. Which accounted for 30% of Vlasic's business. But the company's profits from pickles had shriveled 25% or more, Young says--millions of dollars. The kicker of all this is that Walmart is turning more and more to overseas markets to finder cheaper goods: "People ask, 'How can it be bad for things to come into the U.S. cheaply? How can it be bad to have a bargain at Wal-Mart?' Sure, it's held inflation down, and it's great to have bargains," says Dobbins. "But you can't buy anything if you're not employed. We are shopping ourselves out of jobs." Thanks to Chris Denend for the pointer! You need a weblog, dude! 2:17:43 PM    trackback []