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Weiden+Kennedy and P&G take home first Olympic Gold

In their new TV spot for P&G, It takes someone strong to make someone strong, Weiden+Kennedy has pulled off an impressive Mother’s Day tribute to the moms who’ve stood behind us all. It’s a powerful, emotional tour de force that will bring tears to even the most jaded among us.

Watching the spot makes me long for the days I spent working with Weiden+Kennedy when I was at Target and definitely makes me miss the years I spent working in the agency world.

And even though I’m not an Olympic athlete, their terrific spot makes me feel especially grateful to my own mom!

Amazon is primed for a price increase


In last week’s analyst call, Amazon executives noted they were considering a price increase of up to 50% for their popular Amazon Prime subscription service. This paid “loyalty program” offers subscribers:

  • Free two-day shipping on millions of items
  • Unlimited instant streaming of 41,000 movies and TV episodes
  • Over 350,000 Kindle titles to borrow for free

It’s been a hot news item in the popular press and in the retail industry, but is it a big deal?

The price elasticity of a Prime membership will be based on customers’ perceived value, of course. At $79/year this seems like a relatively simple decision for someone who buys a handful of times per year, uses Prime Instant Video and maybe borrows a few Kindle titles. The emotional arithmetic goes like this: 80 bucks divided by 12 months is just under 7 bucks per month seems like a good deal for free shipping and videos (BTW, nobody seems to talk about the Kindle book borrowing; I guess we don’t care about this one very much).

At around $7/mo, that’s less expensive than Netflix, so it’s a no-brainer if you’re a light-to-moderate viewer of streaming video. I believe if the price rises to exceed the monthly Netflix charge, people will reconsider. They may not leave Amazon, but they will pause to compare whether it’s still the good deal they were getting before a price hike.

I believe Amazon could soften the impact by letting all us subscribers know how much value we’re getting from our Prime subscriptions. At least, they could personalize and let those customers who are receiving “high value” know what a deal they’re getting:

  • Your subscription costs $79/year
  • You’ve received $68 in free shipping + 12 months of streaming video (compare to Netflix or Hulu Plus at $96/year) + 4 Kindle books borrowed for a savings of $54 (compared to their purchase price)
  • Amazon Prime gave you $218 in value for just $79.

Reinforce that value-received message a few times and most folks won’t balk at a modest rate increase.

A few more recommendations for Amazon:

  • Do a phased increase rather than a 50% rate hike overnight
  • Test various rates to get an accurate measure of elasticity — easily done with all the customer behavioral data at Amazon’s disposal
  • Test a monthly rate rather than an annual one to emphasize the value compared with Netflix and Hulu Plus (and to lower the perception of being “locked in” for a year)
  • Consider personalized pricing based on the value customers are already receiving people who order frequently may find a higher price to be a good deal while infrequent buyers may be more sensitive to a rate hike
  • Validate whether the payment of a Prime subscription increases customer propensity to buy from Amazon so they can maximize the value of the subscription fee — then weigh the elasticity risk against this increased purchase propensity. That calculus could help find the ideal sweet spot where Prime subscription cost balances perfectly with increased purchase volume.

See my comments and others from the RetailWire Brain Trust on

Black Friday Turns Into Black Eye for Target — Thanks to Sophisticated Hackers

This morning CNN reported that Target fell victim to a massive and very sophisticated hacking scheme. Target and credit card issuers say as many as 40 million credit cards may have been compromised in this attack, which began on Black Friday.


What’s fascinating about this is that the attack was NOT aimed at, but was instead focused on the brick-and-mortar stores — a place we usually consider to be more secure because major retailers have implemented thorough security measures in the form of PCI.

PCI is The Payment Card Industry Data Security Standard (PCI DSS), a proprietary information security standard for organizations that handle cardholder information for the major debit, credit, prepaid, e-purse, ATM, and POS cards. The standard began in 2004, but it really took hold after the massive credit card security breach at TJX Companies (TJ Maxx and Marshalls) during the Christmas shopping season in 2006. That attack affected 94 million accounts, more than double the number affected by the recent Target attack, and according to Visa it resulted in at least $68 million in fraud-related losses.

In a less PCI-compliant environment, the hack might have worked as shown in this YouTube video, “Hacking your credit card as you shop”. What makes this recent Target attack especially interesting (and a bit scary) is that thieves apparently figured out a way to jump in at the very front of the security chain and steal mag stripe information BEFORE hitting any of the PCI measures were designed to prevent theft. Target’s security is top-notch and their PCI implementation quite rigorous, so how did the hackers do it? According to reports, the sophisticated hack may have been in the firmware or software of the credit card swipe devices, so the hackers were able to bypass all the normal PCI-compliant security measures and get to the card data BEFORE it was ever encrypted.

Over the coming weeks and months Target, the Secret Service, and credit issuers will undoubtedly revise security protocols and work to overcome this latest hack. In the meantime, consumer vigilance continues to be our best last defense. If you’ve shopped Target recently, you may want to call a special hotline Target has established for people who suspect unauthorized usage of their card information: 866-852-8680. And it’s a good idea for all of us to do these four things to ensure your credit information is secure.

This may not be all bad: I’ll use this as an excuse to explain any gifts I may have forgotten to buy.

The Real Cost of Brand Infringement

There has been quite a social media storm on the leading edge of the cycling industry.  To quickly recap, bicycle giant Specialized threatened to sue the owner of a small bike shop called Cafe Roubaix Bicycle Studio for trademark infringement over his use of the name “Roubaix”.  Specialized claims the name for one of their bicycles.

The owner, Dan Richter, opened his shop after being medically discharged from the Canadian military after over 20 years of service, suffering PTSD after serving in Kandahar, Afghanistan.  He took his savings and various military payments he received, and expanded his operations from a wheel building business he ran from his garage, to a storefront.

The story hit a week ago Saturday, in the Calgary Herald, and a firestorm of outrage poured from social media with such intensity that it created and continues to sustain an active revulsion of the Specialized brand.

To be fair, it is expected that trademark owners should diligently protect their trademarks from infringement and other misuse.  Specialized would do well to take a cue from another industry’s giant, Jack Daniel’s.  When they discovered an author who had designed his book cover in such a way that it too closely mimicked the brands famous whiskey label, they sent the most polite cease and desist letter.  So much so (and here we go again with social media…), that it was sent all over the world and covered by publications with massive readerships: The Atlantic, Forbes, The Huffington Post, and finally, and The Telegraph in the UK, both of which I cite here, just to name just a few.

I, being a passionate single malt scotch whiskey drinker, will certainly give Jack Daniels another look the next time I’m in the mood for a fine whiskey – I am now a fan, a swooning fan at that.  Jack Daniels embraces and radiates class. In reference to the above incident, their Chief Trademark Counsel, David Gooder was quoted as, “There is no point using a sledgehammer to crack a nut.” I’m now a huge fan of David Gooder, too.


“We are certainly flattered by your affection for the brand, but while we can appreciate the pop culture appeal of Jack Daniel’s, we also have to be diligent to ensure that the Jack Daniel’s trademarks are used correctly. Given the brand’s popularity, it will probably come as no surprise that we come across designs like this on a regular basis. What may not be so apparent, however, is that if we allow uses like this one, we run the very real risk that our trademark will be weakened. As a fan of the brand, I’m sure that is not something you intended or would want to see happen.

“As an author, you can certainly understand our position and the need to contact you. You may even have run into similar problems with your own intellectual property.

“In order to resolve this matter, because you are both a Louisville “neighbor” and a fan of the brand, we simply request that you change the over design when the book is re-printed. If you would be willing to change the design sooner than that (including on the digital version), we would be willing to contribute a reasonable amount towards the costs of doing so. By taking this step, you will help us to ensure that the Jack Daniel’s brand will mean as much to future generations as it does today.”

Did we all not learn in college during our public speaking classes that the testimonial is one of, if not THE most powerful tool, of influence and persuasion?  Social media is the instant and the ultimate in testimonial.  In these high tech, highly connected times, brands should never forget nor take for granted that a news story can travel around the globe in seconds – and the court of public opinion has more sway and staying power than an actual court proceeding.  Just look at Paula Deen: cleared of wrong doing in court, but has lost public favor and nearly all of her sponsored cooking and cookware relationships. Consider “The Juice”, Mr. Simpson, won in court but completely lost the public’s faith and adoration.

Now, let’s kick that social media influence into reverse.  It spawned the Arab Spring, Occupy Wall Street and was credited with having won President Obama’s campaign for him on many levels.

It’s a big, red flashing warning, brands: Do NOT under estimate the power of social media.  We live in a world where perception is everything, and people who understand the power of social networking are using Facebook, Tumblr, Twitter, Path, YouTube, SnapChat, Digg, Google and many others to shape perceptions and win others over to their points of view – regardless of the facts.

Specialized exists in the passionate niche and very tight community of cycling, stalwart fans of everything two-wheeled. Their current customer is highly connected to the industry and industry news.  But the emerging customer base, the millennials, live on and live by social media on level unmatched by any other demographic.  I found posted on Website Magazine, a recent study of the millennial mindset conducted by Edelman Worldwide, the exhaustive study makes one thing abundantly clear: Brands Matter.

•    More than 80 percent of Millennials regularly discuss brands online

•    70 percent will share a favorite brand with friends and family

•    70 percent will keep coming back to a brand they like

•    54 percent will warn friends and family about a brand they don’t trust

•    41 percent will boycott a brand if disappointed

•    32 percent will rant on a social network if disappointed by a brand

•    29 percent will join a community of others who dislike a brand

As is trending for brands in all categories all over the world, the millennial generation are the new purveyors of cool. They love small, quirky, authentic brands – ones with heart and soul.  Don’t be surprised when the best of the small brands take over the category, think: Salsa, Foundry, Niner, Yeti…

It was posted on the Cochrane Eagle on December 12th, that Mike Sinyard, CEO of Specialized, and Dan Richter have sat face-to-face and came to terms with everything. Mr. Sinyard apologized and Mr. Richter graciously accepted that apology.  I’m glad for Dan.  However, Mike needs to go a step further – a giant step forward.  He needs to apologize to Specialized fans and customers in a big way.  Surely, Specialized’s CMO knows it is much easier to keep the brand fans that you already have than it is to acquire new ones.  Not embracing that will be a deeply regretful and painful lesson.

There are posts by fans so outraged, that they won’t even ride their Specialized bikes in public now, too ashamed to have an association with the brand.  Folks have declared that they have thrown out all of their Specialized equipment or that they will forevermore abstain from purchasing anything Specialized or have any association with the brand whatsoever.  And ironically, on the flip side, Richter’s Facebook followers for Cafe Roubaix Bicycle Studio have jumped from just 500 to over 12,000 in a single week and Cafe Roubaix has sold out of T-shirts. Perhaps best of all, the accidental “advertising” he has garnered from this whole situation is priceless and indelible.

I found the Urban Dictionary’s definition of “Epic Fail” wholly appropriate here: A complete and total failure when success should have been reasonably easy to attain.  So what will the ultimate cost of brand infringement cost be to Specialized?

Well, they could have gone the utterly gracious Jack Daniels route and leased the Roubaix for a pittance, for example.  Perhaps even given this war-torn gentleman several of their top-of-line Roubaix bikes and embraced what they could have alternatively perceived as total flattery – his use of “their” trademark name?  It could have been a great brand building venture and a shining PR move.  They could still try to do something… though the longer it goes, it’s doubtful that it would be perceived as authentic. They should have been posting their apologies and detailing the leasing agreement they made with Mr. Richter on their Facebook page or on their site or, at least, responded to the media requests for contact.  It’s fundamental Mr. Sinyard. We all learned it from storybooks as children – all those people blasting their distain through their mobile devices – if you are the giant, you don’t squash the little guy!  Noblesse oblige, Specialized, noblesse oblige.

The ultimate cost to Specialized will be known in a few months.  But for all the outrage and revolt, it would have been much cheaper for Specialized to handle Mr. Richter, in a more dashing Jack Daniels style.  Lease the name to Mr. Richter for a dollar a year along with an expedient, decorous and noble note wishing him well and continued success with his shop.  It seems fitting and hardly cliché, to say that Specialized is, most regretfully, days late and a dollar short.

– Heather

Amazon Goes Down – Score One for the Little Guys

Yesterday the little guys in retail—by that I mean everyone smaller than Amazon (in other words, everyone)—got a brief reprieve from the e-commerce juggernaut that is According to, the site was down for something like 41 minutes. Across the U.S., would be Amazon shoppers received errors starting around 2:50 pm EDT. I received a few incredulous calls from friends and family assuming the problem must be with their ISP and asking if I was experiencing the same outage.


Since I’d recently reposted an infographic about what happens in 60 seconds online, I had the one-minute sales figure for Amazon in mind. A quick calculation says Amazon’s outage cost them about $3.4 million (41 minutes X $83,000/minute). Ouch, that’s more than most of us make in a week!

As soon as I realized Amazon was unreachable, I looked out my window and was reassured to see that local brick-and-mortar retailers were still up and running. The good news: brick-and-mortar retailers tend not to go down except in case of 7.3 earthquakes or other natural disasters, which are pretty rare, thank goodness.  The bad news: their other major threat, Amazon, is ever present — well, except for yesterday’s brief outage.

Retailers are racing to reinvent themselves to stay relevant in the face of the ongoing weak economy, rapid technological change, and the threat of show rooming—where their stores become the de facto showroom for online retailers, who frequently end up getting the sale because of their lower prices. The pressure is intense, and Amazon’s outage didn’t even last long enough to let retailers catch their breath. But maybe, if you just HAD to buy something during that 40-minute outage, your local electronics store, bookseller, or apparel shop might have gotten your business. It’s a nice thought, anyway.

Amazon has been mum about what happened, although they say they were NOT hacked, so apparently this was not a malicious outage. Malice or not, there may be a few IT folks in the Seattle area soon looking for new jobs. If you’re a mid-sized specialty retailer looking for experienced eComm IT hotshots to help you nail your omni-channel tech, now’s your chance.


p.s. If you’d like to do your part to help Amazon make up for yesterday’s lost revenues, you can start with my “Gift Ideas for Lance” wish list. Don’t delay. Amazon needs you!

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