The Allure Of Being Limited: Part 1/2

Quick Read: Value as a concept to a consumer has 2 key dimensions: perceived benefit and perceived cost (of a product). But the moment a third dimension called ‘availability’ is introduced, the equation becomes intriguing and interesting, especially when the former is limited – in reach or time.

Value is an interesting concept. It can be defined as the consumer’s perceived benefit derived from a product in relation to its perceived cost, and can be represented by the equation:

Value = Benefit / Cost

What generates value? Dial up the benefit and/or dial down the cost of your product for the consumer. Simple. Isn’t it? But that is conventional.

Let’s take the concept of Limited Availability. When something becomes limited in availability, the concept of value can become a bit unconventional and even compelling – almost as intriguing and compelling as the concept of turbulence is for physicists.

Don’t believe me? Let’s take 3 examples.

What if the sun were to become limited edition?

Difficult to imagine, right? But for the 3,300 odd people living in the small Norwegian town of Rjukan they don’t have to. Because sunlight for them is literally limited – to just 6 months in an year. The towering peaks that surround the town rise to almost 2,000 meters above sea level and block out the sunlight for 6 months, meaning Rjukan residents live in a permanent shadow from September to March. Every year.

So in October 2013, the town of Rjukan created history by getting sunlight to shine on the town.

And the day that happened, the town square was reportedly abuzz with cheering families, delighted children, sun loungers doning shades and drinking cocktails while waving Norwegian flags as TV cameras flocked from around the world. It was almost like a spectacle, an epochal moment for the town.

How did they do it?

(Giant mirrors reflecting sun light into the Town Square of Rjukan. Source)

Giant mirrors.

At a cost of 5 million Norwegian kroner, they installed giant mirrors on a mountainside to reflect the sun into the town. Using computer controlled technology, these mirrors, called heliostats are powered to shift every 10 seconds to track the movements of the sun and reflect sunlight into the town square throughout the day.

Regardless of the cost involved per capita for Rjukan, this unique solar project stands out as a sculpture, an installation that makes us think about the value that we attribute to something as fundamental as sun especially when it becomes limited. Limited in reach and time.

An insanely irritating game with bad graphics = a viral hit?

Flappy Bird is a 2013 game developed by Dong Nguyen – a Vietnam based developer. For the uninitiated, the following lines from this Verge article can give you a quick sneak view into the ‘Flappy Bird Phenomenon’:

..the game goes as follows: you tap the screen to propel a tiny, pixelated bird upwards. If you hit any of the green pipes on your way … the game is over. The goal is simply to accumulate the highest score possible. The catch? You’ll very likely spend an hour even reaching a score of five. The app has been downloaded 50 million times, and has accumulated over 47,000 reviews in the App Store — as many as apps like Evernote and Gmail. Mobile games studios generally spend months coding up deliberately addictive and viral titles, but Nguyen did it by spending a few nights coding when he got home from work.

See the video of the game play here:

But for many gaming industry experts Flappy Bird is an enigma. Huffington Post described it as “insanely irritating, difficult and frustrating game which combines a super-steep difficulty curve with bad, boring graphics and jerky movement”. Despite that by early 2014 it was one of the top free games on the App Store and Google Play in the US and the UK and was touted as “the new Angry Birds.” And was reportedly earning around $50,000 a day in revenue through its in game advertising. But that’s not the most interesting part.

On the 8th of Feb, when Flappy Birds was soaring past stratospheric heights in popularity and cult status, Dong Nguyen tweeted the following.

With this single tweet (dutifully reported by the likes of The Wall Street Journal, Guardian, Forbes, Reuters etc. and aided by the existing popularity of his game) Dong was instantly catapulted to a status of cult guru trying to pull an act of ‘Limited Edition’ to his game.

This promnise of limited availability has unleashed an instant panic in the gamers, fuelled debates among gaming experts globally and even invited suspcisions that this could just be a marketing stunt.

Not surprisingly, the game was taken down on App Store and Google Play within the next day while the whole phenomenon has become a viral hit globally. And spectacularly, following the removal, many media outlets reported that several merchants on eBay were offering phones that had the app pre-installed for US$1499 or more, with some receiving bids of over $90,000!! (source 1,2, 3)

As mind blowing as this might prove to be, the story nevertheless tells us two things:

That Flappy Bird is proof that no one really knows what the audience wants. (Do read this article by the same name)
And that the promise of limited availability can sometimes stretch the definition of the word irrationality or insanity (depending upon who you are)

So that’s two examples so far on how compelling the perception of value can turn out to be when driven by a promise of limited availability.

The third example is my personal favorite and deserves a seperate blog post.

To be continued..

Convenience – With Capital ‘C’

Quick Read: Recent innovations across sectors underscore how Convenience is at the core of their offering to the consumers who are happy to pay a premium for the same. While these could have disruptive implications to traditional business formats, they too are not far behind in figuring out the new playing field – otherwise called Convenience with a Capital ‘C’.

Convenience as a core value proposition is getting all pervasive.

And for proof of this, one needs to just look at the vending machines in Japan or the jidohanbaiki as the Japanese call them.

Japan, they say, is like the spiritual hub of the vending machines. In fact according to this CNN report, there are currently around 5.5 million vending machines in Japan, which is one vending machine for every 23 people in the country! You have them across categories spanning every conceivable kind of location.

You have vending machines at street corners, restaurants, coffee shops, toilets, even in trams and on mountain tops selling everything from canned drinks to drinks that are supposed to be a surprise till you buy them, from hallucinogenic herbs to charms, from books peddling porn and erotica to those listing test questions for exams, from footwear to bras and panties. Almost everything and everywhere!

Regardless of the amusement that these jidohanbaiki or the vending machines in Japan evoke from people around the world, the simple grain of human truth that seems to emerge out of all this is the fact that people tend to value convenience over price on many an occasion – irrespective of the category and location. And more so in the recent past.

More recently a Japanese food company Kagome has installed vending machines at the start/finish lines of one of the city’s major running routes to sell fresh red tomatoes to the exhausted runners. The tomatoes are priced at a 280-gram bag for 400 yen ($3.80) and a 180-gram bag for 300 yen ($2.80) which is nearly 270% higher than the price at which you would have gotten it at a supermarket in Tokyo. (as per Tokyo market prices at the time of writing this article). Despite the price premium, reports suggest that these tomatoes are selling well, given that these vending machines are said to be replenished every day.

(Kagome Tomato Vending Machine. Source)

What does the consumer value here? Kagome – it appears – is not actually selling tomatoes through their vending machines, but a natural alternative to energy drinks and bars delivered at your convenience.

Let’s Take Pharmacy

Disrupting the equation that patients traditionally had with their doctors, insurance agents and drug stores, IDEO has recently worked with a startup to design PillPack. This short video explains the concept neatly.

As this FastCompany article says, PillPack is an end-to-end pharmacy and delivery service for pharmaceuticals that is using design to vastly simplify the process of swallowing pills each day. You don’t have to worry about pillboxes, reminders, refills, insurance, co-pay, ad hoc doctors’ prescriptions etc; PillPack takes care of all that for you. All you need to do is tear off the latest M&M Fun Size packet and swallow what’s inside when it tells you to.

Costing $20 per month for the user, PillPack’s service is an interesting example of how – despite several regulatory, legal and FDA challenges that govern drug/drug delivery – selling healthcare in a convenient package could indeed be big business. In fact, the company has now successfully raised $4M in funding from investors and is boldly stepping up its bid to become the top mail-order pharmacy disrupting all existing players in the traditional value chain.

Again, which business is PillPack in? Drug delivery? Or is it Convenience in medication?

Fashion Retailing

Lamoda is an online fashion retailer in Russia. Albeit with a twist. Not only does Lamoda’s uniformed deliveryman bring the clothes that a customer orders, but he also waits for her to try them on, offers fashion advice, takes returns, and processes her payment on the spot.

(Delivering the experience of your local store at your door step, Lamoda. Picture source)

As per this Businessweek report, Lamoda currently employs about 700 couriers and services 1.5 million active users in Russia with sales of more than 6 billion rubles in 2013 despite the logistical challenge of having had to deliver mail orders to the world’s most sprawling nation, spanning nine time zones with an extremely unreliable postal service. The fact that Lamoda looks at it as a serious bet on the business of offering convenience to its customers becomes apparent when you look at its underlying cost structure.

Reports say that despite the cost of delivery for Lamoda accounting for as much as 25 percent of an order totaling less than $1oo, the company doesn’t charge for shipping and keeps prices at the same level as in stores. As a result, its 2013 annual expenses were expected to have exceeded its annual sales. And the interesting part is this. These current losses haven’t stopped investors from betting big on Lamoda’s potential. Over the past two years, Lamoda has raised more than $200 million from billionaire Len Blavatnik, JPMorgan Chase, Kering etc.

Is Lamoda selling clothes? Or Convenience? It appears to be a moot question again.

Retailers not far behind in the new game

Interestingly the underlying theme common in all these 3 examples – Japan’s ubiquitous vending machines, mail order pharmacy business model of PillPack and Lamoda‘s clothing courier with a twist of convenience – is unmissable. The brick and mortar store as it stands today is at threat.

But it appears they are not far behind. For the first time in decades US cities are said to be growing faster than suburbs with customers seeking convenience more than anything else. So, stores like Target and Walmart are embarking on major experiments in scaling down, finding the right locations while ensuring the right formats in order to cater to this convenience seeking urban dweller.

With emerging markets rapidly catching up in spending power, with money value of time increasing for average consumers and an infinite ocean of choice to choose from in virtually every single category, convenience has already become a key differentiating factor.

Probably in a very near future, most products and services will have offerings that sell convenience as their core value proposition. Otherwise they are perhaps in the fitness industry.

(Featured Image: Vending Machine atop Mt Fuji, Japan. Source)

When Sub Cultures Influence Brands

Quick Read: There are several fascinating Sub Cultures and Urban Tribes around the world that could give us insights and compelling perspectives into consumer behaviour by way of their unique shared values and behaviours. In each such instance they exemplify how anthropology can influence advertising and vice versa. The Floggers in Argentina and The Sapeurs in Congo are two cases in point.

As a Youth sub culture, THE FLOGGERS originated in Argentina at the end of 2004 and have become popular through their unique fashion and went on to popularise the concept of picture sharing via photo blogs.

Essentially the floggers have two key characteristics:

They are dressed up in unique style: Floggers wear bright coloured unisex clothing – commonly tight trousers , V-neck T-shirts and canvas trainers and have dyed hair with long emo side fringes which cover their eyes and lip piercings. They have even developed a particular way of dancing to electro/techno music called Electro.
They share their pics on Fotologs: Floggers take photos of themselves and friends and post them on photo blogs. Among Floggers, Fotolog.com is one such popular platform and lists more than 5.5 million users in Argentina, which is one of the two biggest markets for the site (Chile is the other). Here users comment on one another’s photos. The more comments, the more famous the flogger. (source)

(Flogging Frenzy, Source – The Argentina Independent)

As a sub culture, if you come to think of it, the Floggers represent an interesting niche that are at the intersection of fashion, photography, social media, music and dance. Elite members of such a unique urban tribe naturally become trend setters in fashion and are the de facto voice of their generation cutting across class, creed and hierarchy.

Augustina Vivero a.ka. Cumbio is one such Flogger. She has a fotolog site that is said to be the most viewed Internet sites in Argentina logging 36 million visits in a single year alone! She is known to be the most popular and by many accounts the most influential flogger in the world and by age 17 has catapulted herself to stardom and unexpected affluence by transforming her Internet fame into marketing muscle – signing modeling contracts, promoting dance clubs and writing a book about her life. (source)

Not surprisingly Nike enlisted her for a three month campaign including a giant sneaker-shaped slide that the floggers could slide down while posing for pictures.

(Agustina Vivero a.k.a Cumbio holding a NIKE poster featuring her, Source)

Active members of sub cultures like the Floggers being ‘extreme users’, make for a rich minefield of emerging trends, attitudes, values and vibes of a whole generational cohort for the marketers. Thus they make for an interesting case study on how Anthropology influences Advertising (and arguably vice versa).

The Gentlemen of Bacongo

Take the Sapeurs – one of the world’s most exclusive fashion clubs in a city that you least expect – Congo.

SAPE – which loosely translates to The Society of The Elegant Persons of Congo – are a group of people whose life is not defined by occupation or wealth, but by respect, a moral code and an inspirational display of flair and creativity by way of their stylish dressing.

(Of Style and Swagger – The Sapeur. Picture by Daniele Tamagni. Also a cover page of his book)

In the words of Hector Mediavilla – who photographed the Sapeurs in his outstanding project, the SAPE can be considered to be the most interesting anthropological phenomenon for several reasons. Despite being surrounded by poverty and civil war the Sapeurs:

Dream on and survive the harsh reality.
Bring joy to those around them by way of their clothing and
Are required at funerals, parties and other celebrations to bring a touch of stylishness to these events.

Essentially, while everybody knows their elegance is just a façade but nevertheless, they perform an important social function for their fellow citizens. And in journalist Tom Downey’s words “when men dress as Sapeurs they become different people. Their gait, their gestures, and their manner of speaking are all transformed. The clothes are the gateway into a whole other way of being in the world.”

No wonder, the Sapeurs have inspired some fascinating photography projects, books and even music videos. More recently Guinness has brilliantly weaved the sartorial sub culture of the Sapeurs into their latest campaign, as part of which they enlisted Hector Mediavilla to shoot an inspiring documentary and a TVC.

Don’t miss this 5 mins documentary and the TV Spot.

Sapeurs Documentary

Guinness Sapeurs TV Ad, Agency AMV, BBDO London

For me, the connect between Guinness as a brand and Sapeurs as a spirit is a creative masterstroke truly befitting the flair and the flamboyance of ‘The SAPE Spirit’.

Do you know of any other marketing initiative that has sought to tap into a sub culture or an urban tribe?

(Featured Image: Sapeurs of Congo, Hector Mediavilla, Source.)