This week in the news, Coca-cola ends American Idol sponsorship, online fashion companies are making a push into the “real world” by opening brick-and-mortal stores, and frustrations grow after a computer glitch on Amazon U.K. saw thousands of items sold for just a penny.
Coca-Cola Ends American Idol Sponsorship
Coca-Cola is ending its 13-year sponsorship of the American singing competition show American Idol. The beverage giant and other advertisers have reduced spending on the show as its audience, while still large, has declined in recent years. Coca-Cola is said to have spent about $16.3 million on the show this year, compared to about $49.1 million in 2012. Last year, the show also lost longtime sponsor AT&T, although automaker Ford has said it will return next year. Coca-cola said that it felt the time was right to pursue other opportunities to “connect with teens and leverage music as a passion point.” (MediaPost)
More Online Companies Open “Real World” Stores
In recent years, many online fashion companies are scrambling to launch brick-and-mortar stores, allowing their customers to touch and feel their products. Once such retailer is Rent the Runway, a primarily online fashion service that rents out designer clothes at prices considerably lower than retail prices. The company said it plans to open four or five new stores in major metropolitan areas next year. “We’ve seen that physical retail works for us,” said co-founder and chief executive Jennfier Hyman as quoted by the Huffington Post. “When you see some of this inventory in person, it’s on a whole other level. You see the fabric, you see the quality.” Other companies that have opened “showrooms” for their online operations are menswear seller Bonobos, eyewear company Warby Parker, and online beauty subscription service Birchbox. (The Huffington Post)
Retail Stores in China Are Losing To E-commerce
As online shopping continues to grow in China, big retailers will have to revamp their marketing strategy to attract more customers to their traditional stores. It took China’s biggest retail chain Suning all of last year to generate sales of about $17 billion. In comparison, last month, e-commerce giant Alibaba saw sales worth more than half that amount pass through its websites in just one day.” The trend is definitely towards e-commerce because that’s where the consumers are,” said Frank Lavin, CEO of Export Now, which helps global firms launch their business in China. “The ‘big box’ model here is already crowded. You need to invest a lot and be here on a large scale to make it work.” (Business Insider)
Frustrations Grow after Amazon One Penny Glitch
E-store owners fear that they may soon be out of business after a glitch on Amazon U.K. resulted in thousands of their products selling for just one penny. The error, blamed on a software glitch by third-party firm Repricer Express, occurred between 7pm and 8pm last Friday, and wiped thousands of pounds off the value of many independent businesses. Amazon said it would cancel outstanding affected orders. However, sellers are angry that they can’t stop the orders that have already been processed for dispatch. Amazon issued a statement last weekend saying that it would review any orders that were processed and would reach out to affected sellers directly. (The Telegraph)
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