- Comparative cost of woolly mammoths
- The going rate for fake SAT/ACT test-taking
- JC Penney turnaround strategy
- General retail (apparel) pricing strategy
Let's get started. Due to the demand for elephant tusk (mostly from Asia, where it is seen as a critical ingredient in medicine and health supplements), elephant tusk is currently averaging about $900/kg in China's wholesale market. Which is interesting. More interesting? A cheaper type of tusk comes from extinct woolly mammoths, which are periodically excavated from Siberia's tundra. Who would have ever thought that extinct animals would be cheaper than existing animals?
Ahhh, and then there's standardized testing. After a slew of fraud cases recently, the SAT and the ACT have decided to crack down on the security around testing to ensure that students aren't paying other students to sit for tests for them. In the Nassau County district last fall, 5 students were charging $500 to $3600 to test for 15 other students. What this tells me is that kids these days have wayyy too much discretionary spending. Just sayin'. Getting some prep books would probably be cheaper. To heighten security, SAT and ACT will be requiring that students upload photos of themselves when registering, scores will be automatically sent to their high schools afterward, they will eliminate the option for standby or "same-day" testing which doesn't require pre-registration and are even considering potentially giving these photos to colleges as well (this last one is under discussion as there is concern that pictures might unduly sway the admissions process). My response is, if the kids are paying that much to fake it, I'm sure they're going to find ways to get around this process too. It's really only a matter of when and how.
Finally, in a world where "showrooming" has become commonplace in the discussion of things we use our mobile phones for (not as scandalous as "sexting" I know, but when you live in the nerd world I do, "showrooming" is just as bad), the consumer has become king. Showrooming occurs when a consumer walks into a store and performs price comparison on their mobile phone while in the store. Because of the competitive prices that eBay and Amazon.com offer, this usually results in the consumer walking out after trying out the product (touching, feeling, weighing, testing) in the store and then buying it online. This has inspired some retailers like JC Penney to try kind of radical ideas in terms of straight-forward pricing, or "everyday low prices", including extending their "deals" to be monthly instead of weekly and introducing clearance items on the first and third Friday of every month (conveniently matching up with paychecks). Good in theory, but it seems to be confusing customers and sales associates are struggling to explain it. When American Airlines attempted a similar system in 1992, they abandoned it after 6 months because competitors were savagely undercutting their pricing.
The average markup for apparel at a department store begins at around 65%. Over 10 weeks, the stores will go to 25-30% off, then 50, 60 and 70% or more, which results in (sometimes) discounts so deep that the stores will sometimes sell below cost. I can't help but wonder, for large department retailers like Macy's or JC Penney how they can survive. Granted, they probably can distribute their loss and risk over the number of stores they have (since they have so many) but for every one Herald's Square Macy's, you have three Macy's in Chicago that are struggling. How much longer can they survive?
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