Archive for October, 2011
Take online jeweler Stauer. It’s offering a $249 amethyst necklace for free — provided customers pay the $24.95 it costs to ship it. Stauer will lose money on the deal, but it hopes to reel in new customers who will buy other jewelry.
“In this economy, you have to be outrageous in your offers,” said Michael Bisceglia, the president of Stauer who found that more than a third of customers who took advantage of a similar deal on a $179 pearl necklace in 2009 bought additional items. “You have to shake up the world a bit.”
Not every retailer will go as far as giving away merchandise during the holidays, but many will offer profit-busting incentives. It’s a critical time of year for merchants, which can make up to 40 percent of their annual revenue in November and December. And they’re so worried that Americans are spooked by the weak economy that they’re willing to sacrifice profit for sales.
Nordstrom, for instance, is one of the first retailers to offer free shipping on most orders, no matter how small, even though it could wind up paying $3 to ship a $7 pair of socks. Furniture chain Raymour & Flanigan is allowing customers to go four years without paying interest on their purchases — the longest period it has ever offered — even though it will have to help cover a chunk of those charges itself. And Sears is not only offering to match the cheapest prices customers find online, but the department store chain is giving them an additional 10 percent off the difference.
“You may be making a $1 profit instead of a $3 profit,” Fiona Dias, chief strategy officer of members-only shopping service ShopRunner.com, said about retailers. “But you’re not losing a sale.”
Retailers are nervous about holiday sales because many Americans are cutting back on spending as they grow increasingly concerned about the stubbornly high unemployment rate, stock market turmoil and an overall fragile U.S. economy. In fact, a recent Gallup poll found that eight of 10 Americans think the country is in a second recession.
“Retailers are now scared because some believe they’re in a second recession,” said C. Britt Beemer, chairman of America’s Research Group. “And the second recession is hitting them in the biggest shopping season of the year.” Read the rest of this entry »
A social network is characterized by a high degree of reciprocity. Take Facebook for example; there will not be anyone on your network that you have not accepted into it. If someone known to you sends you an invite you would most probably accept it. Also not many people who are unknown would actually send you an invite. Also most people in your network on Facebook are actually people you already know.
But Twitter is characterized by a high degree of non-reciprocity. Let me explain with an example. Kim Kardashian the reality show star has 10 million followers on Twitter but she follows only 140 odd people. Similarly Lady Gaga the most followed person on Twitter follows about 140,000 thousand and she has about 14 million followers. An analysis on others on Twitter shows a similar trend. As a matter of fact according to a research, I heard on a Freakonomics podcast 60% of the tweets on twitter come from roughly 20,000 followers, though Twitter has more than 200 million odd accounts.