Consumer Electronics and Misc
31 Dec 2005 11:46 am
The Disposable Consumer
Yesterday, I replaced my electric toothbrush with an Oral-B Pulsar - a high quality electric toothbrush that is completely disposable. It is sleek, compact and could easily pass for a regular toothbrush. On the back of the box it clearly states: “Fully disposable - no need to change parts.” And if that isn’t clear enough, it goes on to reinforce its disposability: “Includes 1 non-replaceable Duracell battery. Product is not designed to be opened.” Oral B doesn’t want you to change the battery or the brush - they want you to use it like you do a regular toothbrush and throw it away when it’s time to replace it. I used it this morning and experienced the best brush of my life - no exaggeration - and all for $5.99.
I bring this up because auction culture will necessarily cause consumers to choose between buying something that has resale value and something that they will eventually just throw away. There will be a flight to quality on one end of the consumer spectrum and a flight to disposability on the other end. This phenomenon will cause two things to happen. It will squeeze manufacturers that produce lower quality, non-branded and non-disposable products. Additionally, as the quality of disposable versions get better, manufacturers of non-disposable versions will have to offer more in their products to stay in the game.
We have been making the choice between permanent and disposable products in our everyday lives for years. Do you use a fancy, gold plated razor or a Gillette? A Bic Pen or a Montblanc? A Dunhill Lighter or a .99 cent special? Can you remember when disposable diapers didn’t exist? Twenty years ago you might not have believed that cameras would be available in a disposable version. And while the economics of an inexpensive cell phone makes it technically disposable, we haven’t officially embraced cell phones that way yet. What happens when the economics of buying something used makes an otherwise permanent acquisition technically disposable - will you treat the product that way?
The disposable electric toothbrush has officially arrived. The cell phone is just around the corner. The computer is close behind. What’s next?
And how will the permanent versions of these products evolve to compete?
Fashion and Cars
29 Dec 2005 04:03 pm
Making Room for the New Models
In the car rental industry, companies regularly sell off their year-old fleets to make room for the newest model cars. It looks like Bag Borrow or Steal, a handbag rental company, is following their lead. They are having a sale to purge their inventory of “gingerly” used handbags. Click here for the details. And if you are interested in learning more about buying a used rental car, click here.
The Economics of Gifting
Today I was quoted on the front page of the Financial Times in an article that discussed ‘regifting’, a term used to describe the behavior of giving someone a gift that one received as a gift from someone else. There were a flurry of similar articles in leading papers across the country. FutureShop was extensively excerpted in the FT article. I also appeared on CNBC to discuss the same topic this evening.
The general interest in the topic stems from the belief that people are starting to sell unwanted gifts on eBay rather than regifting them - a newsworthy topic for the week after Christmas.
Gifting is generally an economically inefficient behavior (unless you are giving cash, of course). Think about it for a moment. You are buying something for someone, yet you don’t really know the value that person will place on the item. In fact, it’s more than likely they will value the item at less than what you paid for it. Why? Because, if the recipient valued it as much, they would have likely bought it themselves (assuming they knew the item existed). And if they did buy it (and already own it) your duplicative gift is certainly worth a lot less to them than the first one they bought for themselves. (For example, how much would you pay for an identical shirt to the one you already own?) .
Fortunately, there are new and evolving practices that are helping make gift giving more efficient. The gift registry allows the recipient to tell its would-be gifters exactly what he or she wants. But gift registries are traditionally used for weddings (and more recently for baby showers). It is not yet culturally acceptable to register for birthdays, anniversaries, bar mitzvahs etc. Problem solved with the advent of the wish list, an Internet innovation that allows users of sites offering this feature to keep a running list online that lets the world know exactly what they want.
If you dont like to be told what to give - after all, a certain component of gifting is self serving…like getting the satisfaction of delivering a surprise to a friend or loved one, or deriving pleasure from making someone feel good - you can make the process more efficient by including a gift receipt with your gift. Gift receipts allow the recipient to exchange the gift hassle-free with something they prefer. Think back to the time when the only alternative would have been to include the actual receipt which revealed the cost - too tacky to ever have become mainstream. There is also the gift card, which like the gift receipt, allows you to control the venue of the purchase but not the actual item. There is an interesting secondary market for gift cards developing online as discussed in FutureShop as well as in this article.
If the gifts you received for the holidays this year didn’t come off your wish list or didn’t include a gift receipt, there are always the dropshops who are ready, willing and available to sell your unwanted gifts for you on eBay. They’ll even sell your gift cards if you don’t like the stores they came from!
24 Dec 2005 12:30 pm
This month I stumbled across an interesting service that complements auction culture. It’s called Cierge and the best way to understand it is to think of a concierge service for consumer electronics. Cierge is a division of Sony and provides its members with VIP access to their product line. Specifically, Cierge gets a special allocation of Sony products before they are released to the general public. As a member, you get the latest, greatest cameras, computers, game consoles and other goodies months before they are readily available in stores.
The price for access - a cool $1500 a year (you get free membership if you are an American Express Black Card cardholder). Given the cost, membership tends to be made up of people that are either tech junkies (like me) or tech-challenged (those that require special hand-holding when buying technology - Cierge will actually come to your home to install anything you buy if needed).
So why am I writing about this service? Simple. By being able to buy the newest gadgets in advance of broad public availability, you can enjoy owning these products for less. How? Because you get to own the newest gadgets depreciation free for several months. Typically, during the first few months of a new product’s life, it isn’t easy for people to get their hands on it. During that period, these products trade at a premium because people are willing to pay more to own the newest things (for example, the Xbox 360 is currently trading on eBay at almost 2X MSRP in its second month).
So by joining Cierge, you technically can amortize your cost for electronics over a much longer period than the average person. When it comes time to upgrading to the next best model, you can flip the old model to someone on eBay during a period when 1) it is still a current model and 2) you already got a lot of use out of it.
You can also use Cierge a different way - to try out the latest products for free! How? Buy the item, try it for a month or so, and if you are unhappy with the purchase, you can probably sell it online at cost (and sometimes at a profit) since there are always people willing to pay a premium for the newest hard-to-get models.
If you are interested in joining, call 877-295-7669 - They are so exclusive that they don’t have a website. But you can view Sony’s latest products at www.sonystyle.com.
For a list of the 50 greatest gadgets of all time, click here.
Welcome to the Auction Culture Blog!
So you’ve read FutureShop and want to keep up with the new auction culture revolution. Well then, you’ve come to the right place.
Check in frequently for real world updates on how people and businesses are embracing this new paradigm. And when you visit, look for tips, advice, strategies and other information that will help you understand and benefit from our rapidly changing world of buying and selling.