Why Is Airline Pricing SOOOO Different?

Posted on July 1, 2013 by bermanevansretail
As we know, in recent years, the airlines have made an already complicated pricing system even more complex. Their pricing model is quite different from other retailers.
Consider this observation from an article by Scott McCartney for the Wall Street Journal: “Imagine if airlines ran restaurants. We’d live in a world where a half sandwich, the equivalent of a one-way ticket, might cost two times as much as a whole sandwich. The airline way of doing business is unique — few other businesses have as many rules and restrictions, taxes and fees, frustrations, and disruptions. Not many other businesses have such varied and ever-changing pricing for their products. And rare is the business that hits its customers with penalties of hundreds of dollars. Why so different? Airlines face a unique set of challenges, including easy world-wide comparison shopping, high equipment costs, complicated contract work rules, vulnerability to oil price swings, and heavy government regulation. And most everything happens outdoors, whatever the weather. The business has gotten far more complex in recent years as the joys of flying have diminished. Simplified pricing schemes have been tried and have failed. Fees and penalties that have generated revenue have been pushed higher and higher. The result: a $200 fee to change a domestic reservation.”
Click the image for a WSJ video clip.

 

Art by Michael Witte

 

Posted in Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 3: Targeting Customers and Gathering Information, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing, Video Clips (non-career) | Tagged , , , , , , , , , , | Leave a comment

What Americans Do in a Typical Day

Posted on June 30, 2013 by bermanevansretail
The U.S. Department of Labor regularly publishes data on the lifestyles of Americans, including the amount of time spent on various activities.
Recently, the Wall Street Journal created the graphic shown below out of 2012 data on American adults. From a retailing perspective, note: People average 43 minutes per day on shopping activities — about 5 hours per week.
Click the chart to read more.

 

 

Posted in Part 3: Targeting Customers and Gathering Information, Part 7: Communicating with the Customer | Tagged , , , , , , , | Leave a comment

A Supreme Court Victory for American Express — But Not for Retailers

Posted on June 29, 2013 by bermanevansretail
In a major June 2013 business ruling, the U.S. Supreme Court sided with American Express and against the firms’ retail clients. This is especially significant for smaller retailers.
As reported by Lawrence Hurley and Andrew Longstreth for Reuters:
“The U.S. Supreme Court delivered its latest blow to class-action lawsuits on Thursday when it enforced an arbitration agreement that prevents merchants from banding together to make antitrust claims against American Express. The merchants had challenged the legality of an arbitration clause in a contract with American Express that prevented them from coming together to pursue disputes against the credit card company. Class-action lawsuits typically are filed by individuals or small businesses acting on behalf of large groups.”
“In this case, restaurants and other retailers sued alleging that American Express violated antitrust law by forcing them to accept its credit cards as a condition of accepting its charge cards. Charge cards require their holders to pay the full outstanding balance at the end of a billing cycle; credit cards require payment of only a portion, with the balance subject to interest. The merchants argued that the arbitration clause effectively prevented them from seeking redress because pursuing individual claims against the company would be prohibitively expensive. But American Express argued that the contracts at issue served the dispute-resolution policies established by the Federal Arbitration Act, and the Supreme Court agreed.”
Click the image to read more.

 

Credit: Reuters/Mike Blake

 

Posted in Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing | Tagged , , , , , , , , , | Leave a comment