ETD: 923 Specialized retailing; Who built the Internet?;
Retail Stationery Market
E-Tailer's Digest
etd_post at gapent.com
Mon Oct 3 19:56:43 GMT 2005
E-Tailer's Digest --- Everything for the Retailer
Issue #0923 October 4, 2005
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] Specialized retailing
[3] Who built the Internet?
[4] Retail Stationery Market
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[1] Greetings.
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Hi All:
Thanks to all who sent me the well-wishes on my marriage renewal this
past Sunday. I really appreciate your thoughts. It was a wonderful
celebration, and I am happy to be married to my bride.
This will be an early digest. Tonight starts Rosh Hashanah the
Jewish New Year. It is also the start of Ramdan, the Muslim
holiday. So best wishes to all who celebrate these holidays.
Speaking of holidays, it surprises me that retailers don't take
advantage of the specialized needs of communities in their
area. Some of can be quite lucrative.
The group who built the Internet (no, it wasn't really Al Gore) are
at it again. BBN Technologies built the forerunner of today's
Internet, and employed the @ sign to send the first e-mail. Now they
are into a new venture, where they hope to make money.
Pam Danziger has an interesting piece on the stationery market. Is it
stationary or moving?
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com
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[2] Specialized retailing
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Lately I have been observing retailers and how they fail to exploit
opportunities in their area. October is a month of holidays -
religious and not so. Orthodox Jews celebrate Rosh Hashanah, Yom
Kippur and Succos. Muslims celebrate Ramdan. Kids celebrate Halloween.
With Orthodox Jews they need to build a sukkah which is a place where
Jews live during the 7-day Succos period. There are restrictions on
building it, i.e., size, composition, roof, walls, etc. A "kosher"
Sukkah needs at least two complete walls and a small part of a third
wall. The walls can be of any material, as long as they are sturdy
enough to withstand a normal wind. The walls should be at least 38
inches high (96 cm), but not higher than 30 feet (9.6 m).
The roof must be made from material that grows from the ground --
i.e. branches or leaves (but not metal, or any food). If you're using
unfinished boards, they cannot be wider than 15 inches.
So, why doesn't some enterprising home decorating store develop
prefabricated Sukkahs to be installed easily by the home owner? Yes,
these communities are together in specific areas, i.e., Brooklyn,
Passaic/Clifton, NJ, Baltimore, Chicago, Dallas, Atlanta, Houston,
etc. So a Home Depot can sure develop something easily. They sell
for $800 to $2,500.
Other groups have similar things that need to be used during specific
periods, It would behove enterprising retailers to check out their
local communities to see what they can do to help (and make money -
special items like this mean high prices and full profit).
George
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[3] Who built the Internet?
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BBN Technologies built the forerunner of today's Internet , employed
the @ sign to send the first e-mail, and even designed the acoustics
for the UN General Assembly Hall in Manhattan. But the company didn't
get rich off of any of those milestones.
Now a recapitalized BBN is scrambling to make sure history doesn't
repeat itself.
With new ownership and a new strategy, BBN wants to profit off the
new century's next big thing: the war on terror. The company hopes to
benefit financially from the speech recognition , network security ,
and wireless mobile technologies it is pioneering for use in Iraq
and elsewhere.
Making the Transition
To do that, the 57-year-old company originally known as Bolt, Beranek
& Newman must make the transition from a contract research house
still heavily dependent on Pentagon contracts to a nimbler and more
entrepreneurial concern focused on turning out rapid prototypes,
spinning off businesses, and broadening its customer base.
The company is growing its core research operations faster than it
had previously, said Robert G. "Tad" Elmer, the president and chief
executive of BBN. At the same time, it is moving to line up more work
for U.S. intelligence agencies and to tap new revenue sources by
licensing more of its technology to corporations and start-ups.
"We believe there is great applicability in commercial areas for some
of the things we're really good at," Elmer said. "Right now these
commercial areas are not that big a part of our revenue. However, if
we do it right, they could be a very profitable part of our business.
And unlike the go-go days of the late '90s, profit really matters now."
That's been especially so since March 2004, when a team of senior
executives and private equity investors purchased the BBN research
business from Verizon Communications (NYSE: VZ) for an undisclosed
sum. The new owners, led by General Catalyst Partners of Cambridge,
Mass. and Accel Partners of Palo Alto, Calif., reconstituted the
once-public BBN as an independent company after seven years under the
corporate umbrella first of GTE, then Bell Atlantic, and finally Verizon.
While the strategy is set, the chase after civilian business won't be easy.
Stiff Competition
BBN has excellent technology in the speech and language fields, said
Bill Meisel, president of TMA Associates, a speech technology
consulting firm in Los Angeles. But he said it faces stiff
competition in those areas from rivals such as Microsoft (Nasdaq:
MSFT) , IBM (NYSE: IBM) , and ScanSoft (Nasdaq: SSFT) , all with more
marketing experience.
"The history of BBN is it's been very inventive, yet it's never been
a commercial marketing organization," he said. "Now that it has
outside investors, it's trying to reach the commercial markets."
Indeed, there have been many chapters in BBN's storied history, but
few have involved technologies that landed in consumers' hands.
In addition to the company's acoustics work in 1949 at the UN, BBN
also invented the Arpanet, precursor to the Internet, in 1969. Two
years later, BBN engineer Ray Tomlinson employed the @ sign to send
the first e-mail message. In 1978, its chief scientist, James Barger,
analyzed the tapes of the John F. Kennedy assassination and suggested
the possibility there were two shooters.
Banking on Speech Research
The speech processing research it began in the mid-1970s is one key
to the future of BBN and its 650 employees. Next month the company
expects to land a contract from the Pentagon's research arm, the
Defense Advanced Research Projects Agency, to lead an effort to
develop technology that immediately translates spoken languages, such
as Arabic or Mandarin Chinese, into searchable English text.
That contract will be for a Darpa program known as GALE, for global
autonomous language exploitation. Valued at more than US$15 million
for its first year, it will be one of BBN's largest contracts ever.
At the same time, company representatives have been marketing related
technologies --speech recognition, search-to-text, and media search
-- to Silicon Valley search and Internet companies, though they have
yet to announce a deal. "We need to be continually moving into new
areas, which feeds the vitality of the organization," said Stephen D.
Milligan, BBN vice president and chief technologist.
But military research still represents more than 80 percent of BBN's
revenue, and most of the cutting-edge technologies coming out of its
labs today, from distributed software to artificial intelligence ,
are focused on aiding the US armed forces fighting in Iraq and Afghanistan.
"Over the past five years, because of what's going on in the world,
their technologies have become ever more relevant," said David
Fialkow, the General Catalyst managing director who sits on the BBN board.
Simulated Training
One research effort is dubbed Ambush, a multiplayer military training
program for personal computers that simulates a convoy moving on a
desert highway.
The software and artificial intelligence agents create a series of
virtual scenarios (sniper fire, improvised explosive devices, car
bombs, rocket-propelled grenades) requiring quick decision-making by
troops in the convoy.
"It throws you into situations," said Bruce Roberts, scientist at
BBN's distributed systems and logistics division. "The goal is to
make day one like day three, to make sure that when you go on a
convoy you're up to speed with the environment and the skills you need."
The program, part of the computer-based training initiative funded by
Darpa, was tested at the Pentagon's Joint Readiness Training Center
in Louisiana as a supplement to physical training. It was fielded by
the Army's 1st Stryker Brigade, 25th Infantry Division, which was
deployed to Iraq from Fort Lewis, Wash.
Another program is Boomerang, a detection system featuring multiple
microphones mounted on armored vehicles that can quickly identify the
direction of mobile shooters and enable soldiers to respond. Like
Ambush, Boomerang became a "rapid development" program after the
Defense Department approached the company in November 2003.
"We were given 60 days to build the system from scratch," said
program manager David Schmitt. Ambush, meanwhile, began in March
2004; BBN readied a prototype by June and it was deployed in September.
Creating on the Fly
Elmer said the company is becoming adept at the kind of rapid
prototyping required in wartime, and that skill has become an
important part of BBN's new culture.
Bringing products to market quickly will also be critical as BBN
officials peddle their technologies to Internet, consumer
electronics, and life sciences companies.
"We need to preserve and build on BBN's exceptional long-term
technical culture while at the same time taking some of its best
technology into high-growth commercial markets," said Jim Breyer, an
Accel Partners managing partner and a director of BBN.
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[4] Retail Stationery Market
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Greeting Card Marketers and Retailers Struggle, While Consumers
Purchase More Memory and Paper Expression Goods
For many consumers greeting cards are just not relevant to their
lifestyles anymore
The stationery goods market, including greeting cards, social
stationery, gift wrap and partyware, paper crafting and other
stationery, reached $36 billion in 2004, up 6.3 percent over industry
sales of $33.9 billion in 2002. While greeting cards account for the
largest share of industry sales, or $10.3 billion in 2004, sales of
greeting cards declined 3.9 percent from 2002, according to a new
research study from Unity Marketing.
As a result of the decline in greeting card sales, growth in the
stationery goods market is coming from increasing consumer demand for
other memory and paper expression products, including gifting and
party goods, such as gift wrap, ribbons and partyware, social and
computer stationery and paper crafting supplies for scrapbooking and
make-your-own cards.
Greeting cards offer little growth for marketers without new
ideas. The greeting card market is mature, with little opportunity
for significant growth. Nearly 80 percent of adult Americans bought
a greeting card in the past year (78 percent) with the typical
consumer purchasing an average of about 10 greeting cards in the past
year, the research study revealed.
Even more challenging for existing greeting card marketers is that
about half of the greeting card market today is turned off to the
traditional idea of greeting cards. These consumers are ready, eager
and willing to accept a new alternative.
A psychographic analysis of 'why people buy' greeting cards found
that half of the total greeting card market buys greeting cards
largely because that is what is expected of them. They are not
motivated by any deep-seated desire to communicate through a
carefully chosen greeting card, rather they are looking for an
alternative to the greeting card routine. Greeting cards are just
not connecting or relevant to many consumers' lives as they once were.
Marketers battle increasing commoditization in greeting card market,
all the while they exacerbate the problem through mass distribution
and discount pricing. Even for those consumers who are more or less
'into' the traditional greeting card marketing paradigm, they are
looking at cards more like commodities. One key factor is that more
greeting cards, even those from the premium marketers like Hallmark
and American Greetings, are readily available in mass channels, the
number one shopping source for all categories of stationery goods in
the Unity survey.
As greeting cards become less differentiated and sold more like
commodities, shoppers increasingly look for a card that will work for
the specific occasion and is priced right. When a shopper perceives
virtually no meaningful difference between a $3.50 premium card and a
50 cent one, then they will inevitably go for the lowest price point.
Consumer sensitivity to price point is growing in the greeting card
market. More consumers view the price paid for the card and the
wrapping paper as part of the overall price of a gift. So $5.00
extra for the card and wrapping extras adds to the overall perceived
price of the gift. And many people today would rather put that extra
$5 toward the gift itself and keep the extras to a bare minimum.
Consumer Insights on Greeting Card, Stationery, Gifting and Paper
Goods and Paper Crafting Markets
Unity Marketing's latest study of the greeting card, stationery, gift
wrap and party goods and paper crafting markets includes findings
from qualitative/focus group research among serious category users
and a survey among a representative sample of 1,644 U.S. consumers
focused on their purchases of stationery goods and the motivations
that drove those purchase (i.e. why people buy).
The 160+ page research study is available here...
http://www.unitymarketingonline.com/reports2/cards/
Pam Danziger,
President
Unity Markeing, Inc.
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