Radhika (Radhi) Sharma's Blog

In the world of a college student, life soon becomes work, eat, and stream. Almost everyone I know, in some way, has a method to watch tv shows or movies. Whether it’s Apple TV, Amazon Prime, HBO, or my favorite, Netflix. Over the past year, Netflix has been the fastest growing “FANG” (Facebook, Amazon, Netflix, and Google) stock, up 64%. However, they have been slowing down due to some changes in the streaming world.

The elephant in the room in terms of streaming seems to be Disney pulling out of selling their movies to Netflix and instead, begin their own service to host their own films. This direct-to-consumer streaming service is said to be coming in 2020, and Disney will actually be pulling movies from Netflix in 2019. Even Netflix’s relationship with Marvel will stay intact, as their shows including “The Defenders” and “Marvel’s Inhumans” will remain on the service, as well as the larger Marvel films. Disney is reportedly planning on making their own streaming service cheaper, just due to the lack of volume. Disney also plans on launching an ESPN streaming service. This will include over 10,000 events previously only available for cable users.

As Bob Iger, CEO of The Walt Disney Company states, “I can say that our plan on the Disney side is to price this substantially below where Netflix is. That is in part reflective of the fact that it will have substantially less volume. It’ll have a lot of high quality because of the brands and the franchises that will be on it that we’ve talked about. But it’ll simply launch with less volume, and the price will reflect that.”

In response to this, stocks for Netflix went down by 5%, demonstrating investors’ worry for the future of Netflix. However, this change begs the question: Is this an actual problem for Netflix? In my opinion, we should be looking at Disney’s departure as an expanded, yet similar future in streaming services. It’s not necessarily the case that Disney will ultimately dissolve Netflix into being obsolete or redundant or any other service such as Hulu or HBO. It is known that each of these different streaming services offer similar products, but the content itself is what differentiates each one. Amazon Prime offers “American Gods” while Netflix has it’s “Stranger Things”, and so with Disney’s service for content created by Lucas Films and Pixar, it seems as though streaming services are like cable “channels”. As Netflix becomes less involved in their licensed content, we are moving into a future where in order to watch some things, we have to pay for everything. Is this what we encounter with cable tv, yet with more convenient means?

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E-commerce is changing, rebuilding, and revolutionizing the way we buy and sell. There is a lot to say about E-commerce, but what I’ve found particularly interesting is how we, as consumers, play a part in it. Of course, we’re taken back to when it would be hard to find a particular item we were searching for. Now, type in some key search words and it AND its alternatives are presented to you. In many ways, technology has made the consumer decision harder, but the actual purchase incredibly easy. We have the likes of Amazon leading the way to make consumers be more likely to spend, along with their partnerships and sponsors.

I can search up for some jewelry on my phone but have ads appear on my facebook newsfeed on my laptop only hours later. They are the products I don’t ask to see, which give me a little anxiety. Below are actual “suggested posts” from my newsfeed on Facebook.

But do targeted ads work? According to Adam Ruins Everything, as platforms such as Google and Facebook allow you to search for things or like pages, you are essentially inputting information. That information is sold to different advertisers, and in return, they will send out targeted advertisements. The information on your age, gender, political affiliations, and income are all extremely valuable to help advertisers make the “selection” of products and services.

As well as that, the consumer experience has psychologically been affected by e-commerce. As we buy more and more online, we are first, being tracked and shown alternatives that are possible which is a simplified version of the paradox of choice. This generally brings the “buyer’s remorse” into the online shopping world refreshed and different. In brick and mortar situations, we aren’t able to tell the pitfalls with the product until we actually try it, whereas a one-star review on Amazon is likely to deter us. The online experience reduces our actual value and personal connection to the good, with an anonymous delivery at our service as well. We feel the buyer’s remorse later on when we see our credit statement afterward.

To businesses, this information is excessively important, and without it, they would fail. In my eyes, the e-commerce world is going to keep growing and expanding. This is best exemplified in Jennifer Wu’s blog on Rent A Runway. However, that is regarding the blue ocean, where businesses are able to show that they fulfill consumer needs. Yet how do we become aware of the implicit and subtle ways that businesses expose us to buy? They use tools such as reinforcement and guilt as a part of our online shopping experience which doesn’t make much of a positive impact for us, but a profitable impact for them. For one, a better bet of creating an ad-free space is to use extensions such as AdBlock or even go on incognito.

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I recently learned that Uniqlo, a Japanese clothing brand, had set up shop in Metrotown here in Vancouver. I wasn’t actually shocked – I knew that Uniqlo was extremely popular in Asia and wasn’t surprised that they reached out to North America too. Uniqlo was founded in 1984 in Hiroshima, and now has more than 1,900 stores around the world. It’s owner, Fast Retailing, earned 176.4 billion yen at the end of their year in August, indicating that Uniqlo’s global growth was worth the expansion (Fortune).  

Uniqlo has a value proposition of being fashionable, technologically made, and functional clothing for everyone. The clothing is accessible and relatively inexpensive for anyone regardless of age, gender, ethnicity, etc. As well as that, they engage in a partnership with the UNHCR which delivers 20.3 million clothing items to refugees and others in need (Fortune).

Their recent opening in Vancouver was preceded by two in Toronto. Sales during this opening were said to be “way above expectations”. Yasu Hayashi, chief operating officer for Uniqlo Canada, emphasized the importance for a store in the Uniqlo brand.

He states,  “However much you do on a smartphone, it’s a phone. In a store, you hear the music, feel the customer service, the way we fold — the Japanese-ness cannot be displayed on a phone.” (Bloomberg)

To Hayashi, the “brick-and-mortar” store is key (Bloomberg). With the rise of e-commerce represented by Amazon or Asos, businesses are being pushed out of the market. The outdated value propositions of companies such as Sears, who recently filed for liquidation for their stores in Canada, is being replaced with the convenience and efficiency of online shopping.

How can Uniqlo compete in this market? According to the head of Fast Retailing, Tadashi Yanai, every business faces the challenges of “globalization and digitalization”. Right now, we see that Uniqlo is definitely conquering the challenge of globalization, with 798 international stores (CNBC). However, digitalization doesn’t seem to be a priority at the moment. Yanai comments that the ultimate goal would be achieving what seems to be the Amazon standard of purchasing and delivering in one day (CNBC).

Uniqlo’s value proposition is relatively unseen in the Canadian market. However, the level of convenience and comfort that this type of market is used to comes from having different ways of purchasing. Stores can be very important within the Japanese culture, but preferably sooner than later, in order to stay afloat, Uniqlo should reach towards the digital market. Their value proposition even allows more of a reason to shop online. Going out to Metrotown for the basics or the necessities, in which they offer, is possibly the last resort that customers may want to go for.

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With fashion week up and running this year in the largest cities in the world, one might wonder the actual purpose fashion week serves to the industry. These events were designed as a showcase of ideas of the greatest minds in fashion. Fashion week represented the glamour and magic of fashion, and the elite of the elite would join designers in order to witness their talents.

However, the world is changing. We now see that fashion week is witnessed by heiresses and celebrities, but also content creators who show us what the events are really like. Before the age of social media, we got a glimpse of fashion week from magazines and newspapers. Now, I could have watched the London Tommy Hilfiger show through Instagram stories and Snapchat from my dorm in Vancouver.

The logistical reason for fashion week was for the retailer’s sake. The wholesale method requires a middle-man and in the age where fashion shows were necessary, manufacturing would take anywhere from four to six months. Now, brands are attempting to abandon the wholesale method to an increasingly direct-to-consumer model (DTC). In the DTC model, brands utilize e-commerce (smartphone apps or websites) in order to make profits. In general, the DTC model is said to better consumer experience, cut prices by eliminating middleman costs, build brand relationships, but especially is a motive for brands to cut out the middleman of retailers. In this way, consumers are able to buy at the click of a button, have more efficient purchasing, and also designers can collect data in order to produce according to demand. An important point to consider is that manufacturing can be done within days in our age.

To keep fashion week alive and still embrace the DTC model, designers have attempted to use a see-now-buy-now method of selling pieces after shows. However, fashion’s fickleness has proved this attempt unsuccessful. The pieces in those collections are very much out of season, and to consumers, it is too early to begin purchasing.

Another negative aspect is the cost. Brands, such as Tom Ford and Vera Wang have pulled out of Fashion Week this year because of this reason. A show itself can cost over half a million USD. Now, other methods of marketing and showcasing collections have come up, such as social media campaigns, films, and cheaper presentations throughout the year. This not only lowers cost structures, but also allows for a larger reach and audience, and a somewhat more permanent statement. Fashion week is no longer necessary in the industry, and as social media and e-commerce become more prevalent, more brands should shift into accommodating the times.

As Hurricane Irma passed through the southern United States, the idea of evacuation was on many minds. Irma has already caused devastation in the Caribbean islands along with Puerto Rico. For those who were ready to evacuate responsibly in the state of Florida, flights were one of the only ways to escape as Irma traveled west. Although airlines are notorious for their randomly inflated prices, The New York Times reported on a heavy increase in prices coming from Delta Airlines for those flying out of Miami, Florida. The tweet claiming price gouging as reported by The New York Times is shown here.

Shame on you @delta. Jacking from $547 to over $3200 for people trying to evacute responsibly? #IrmaHurricane pic.twitter.com/O2nfPHQUAh

— Leigh (@LeighDow) September 5, 2017

In the tweet, the price for a Delta Airlines flight from Miami, Florida to Phoenix, Arizona went from 547.70 USD to 3258.50 USD. This resulted in Delta Airlines to be the target of outrage by many who criticised the airline of gouging prices.

Among the critics were Senators Richard Blumenthal and Edward J. Markey, who wrote in a letter to the Transportation Secretary Elaine L. Chao,

“Airlines certainly have a right to a reasonable return for services rendered and vagaries in pricing are to be expected; but airlines have no right to impose exorbitant, unfair prices on Americans simply trying to get out of harm’s way. It would certainly be offensive if airlines – who rely on publicly supported infrastructure and have been bolstered by American taxpayers for nearly a century – used this opportunity to impose unconscionable costs on consumers.”

This letter asks of Secretary Chao to investigate reports of price gouging. Senators Blumenthal and Markey reflect the outrage and views of the people: It is simply immoral and unethical to expect the citizens of Florida and the devastated populations of these island nations to pay prices such as these. The price reported by The New York Times is three times the fare of a flight from Vancouver back to my home in Malaysia at the moment, which is almost a 20-hour flight across the Pacific.

Businesses should not be responsible for handling every complaint against their product unless there is a government-wide regulation against that issue. However, when that issue is that an individual must make a choice to pay for their life or pay with their life, businesses must recognize they hold a certain responsibility towards mending it. Delta Airlines has responded by saying that the increase in price is due to the programming that increases prices the week of the flight. Delta has capped the fares out of South Florida at 399 USD, along with other airlines such as Jetblue capping theirs at 99 USD. Purposeful or not, acts by businesses that threaten livelihoods can be corrected without the loss of profit.

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Sources:  

1. Sablich, J. (2017, September 09). Airlines Face Criticism Amid Irma Price-Gouging Complaints. Retrieved September 13, 2017, from https://www.nytimes.com/2017/09/09/travel/airlines-face-criticism-amid-irma-price-gouging-charges.html
2. As Hurricane Irma Makes Landfall, Blumenthal and Markey Call on Department of Transportation to Investigate Skyrocketing Airline Prices for Evacuees. (2017, September 06). Retrieved September 13, 2017, from https://www.blumenthal.senate.gov/newsroom/press/release/as-hurricane-irma-makes-landfall-blumenthal-and-markey-call-on-department-of-transportation-to-investigate-skyrocketing-airline-prices-for-evacuees