In a week where Tesla ruled the news cycle, we noticed some innovative things happening in the retail space, as well as some chest thumping. Lots of smile-inducing stories too. Enjoy!
Tesla 325K “Problem”
Tesla Motors, Elon Musk’s trendy electric car company owned the news cycle with its highly-anticipated Model 3 announcement. Based on a purely PR play with a strong grass roots effort, there were 325,000 pre-orders ($1000 deposit required) for this $35,000 “mainstream” car in the first week. And that was purely a PR “grass effort” by the Tesla team. You can read more here and here.
Our favorite car reviewer, The Wall Street Journal’s Dan Neil declared:
Yes, it is lovely, with an uncommon grace of line and a body shape—a four-door fastback—that has long been under-represented in the American market. It dares to be modern, and frankly electric—note the absence of an air-breathing grille, a bit like the car has tape over its mouth—but it delivers what to my eye is the most agreeable, most romantic shape in the small-car class.
[Source: For Tesla’s Model 3, the architecture enables the impressive aesthetics]
Neil’s Notables:
- The Model 3’s lithium-ion batteries, promising at least 215 miles range, are concealed within a remarkably thin floor pan structure.
- The rear-situated electric motor is the size of a bathroom trash can (high-performance versions will get a second motor on the front axle).
- Thanks to Tesla’s embrace of complex glass forming for windshields and rear glass, the Model 3 offers nearly polished surface to the wind..
- It will have the largest interior volume of any car in its class—that is, when it comes to the market late next year.
We can see why the Tesla Model 3 is compelling, especially since tax credits take that $35,000 price and drop it to $27,500. But why the rush to lay down a deposit when the delivery is anticipated take place in late 2017?
Tesla Model 3 web page.
>> It’s the Tax Credit, Silly:
Here’s the deal — there’s a cap on the number of those $7,500 federal tax credits available. Wired had a nice write-up to explain:
The sub-$30,000 price point is based on a $7,500 federal tax credit (some states offer additional incentives, but nothing nearly so generous). That discount is designed to foster adoption by subsidizing the cost of what remains a fairly expensive technology without dinging automakers. Everyone from General Motors to Nissan relies upon tax credits to help move cars by keeping the cost of cars like the Model 3, the Chevrolet Bolt, and the Nissan Leaf below $30,000, a number consumers find palatable.
That federal tax credit won’t be around forever. It was designed to get automakers started, and applies to the first 200,000 electric vehicles a manufacturer sells in the US. Once an automaker hits that benchmark, the credit phases out incrementally over the following 12 months.
Furthermore, since Tesla having success with its other electric cars (Model S and Model X), there’s a possibility that most of the company’s federal tax breaks will be gone before the first Model 3 rolls off the line.
Financial Impact:
After the first 200,000 units are sold, the tax credit drops to half its value ($3,750) for six months, then a quarter ($1,875) for another six months. Then it’s gone. Yikes!
Tesla would be smart NOT to crank up production to meet the huge pre-order number. A lot of those folks most-likely will drop out when the financial incentive goes away.
Ready to shift gears? Next up… from innovator (Elon Musk) to innovative.
Innovate or die…
To start, we found it very interesting that big box retailer Staples is reducing its storefront, office supply footprint while creating rentable office space on-site.
This piece in SeekingAlpha mentioned how Staples is expected to unveil a new partnership with startup Workbar to open communal workspace at three Boston-area stores.
We think that’s a brilliant idea. Optimizing the usage of space while creating a predictable revenue stream (depending on the financial model used).
Check it out here.
The story we saw about Samsung’s effort to gain customer loyalty via the 40,000-square foot flagship “unstore” they just opened in Manhattan has us curious. Their branding with all the Galaxy products can be confusing.
Notable quotable:
“People know how to purchase on e-commerce and very often get the product the next day. They don’t need another store. They need a place where they can have a deep dive into the brand.” — Zach Overton, VP and general manager of the new space, called Samsung 837.
If Samsung ratchets up the cool factor — beyond their anti-Apple campaigns which worked for a while — they might garner some sales. However, at 40K square feet, that’s a lot of square footage in a pricey location.
You can read more about it here and here.
Speaking of unusual moves by retailers, in our “catch-up” reading, we skimmed through what Lululemon’s CEO , Laurent Potdevin told the company’s investors during a webcast.
“Our vision is to design and nurture a digital ecosystem that amplifies human experiences, relationships and connection. Digital is a critical platform for us to tap into the power of our collections, both online and offline, allowing us to continue engaging with our guests in an authentic and personalized way.”
Whaaaaat??? They sell yoga-wear / athleisure clothing. This quote seems like it could be applied to any retailer trying to make a go of it in the current economic environment.
He went on to tell the investors he expects digital to account for more than 25% of sales by 2020 “with the introduction of innovative digital experiences, leveraging CRM capabilities and the expansion of more sophisticated digital marketing strategies.”
Man, that sounds like a lot of gobbledygook / marketing weasel speak.
The article mentions a “Lab concept” that opening in New York City’s NoHo. It will be the first in the U.S. They have one in their hometown of Vancouver. So the deal apparently is that the “lab” is a place to try out concepts — small batches of clothing produced by Lululemon’s in-house production team. If the response is good, perhaps they’ll commit to volume production.
Okay, that’s interesting. But again, the “speak” is bugging us. Check out the concept’s tag line:
Inventing things that don’t yet exist.
Uh… isn’t that what inventors do?
Tommie seems to think so. Dossie and Frannie believe Lululemon needs to revisit the wording of this initiative if they want success. Of course, once they succeed in getting visitors to their “Lab,” Lululemon needs to “deliver” — make the trip worthwhile. Yeah, this is definitely a “to be continued” story much like the ones mentioned so far in this NVC post.
Smile Inducing 1.0: Powderpuff Girls are Back…
Cute & adorable and ready to do battle in this millennium.
Per the NY Times, eleven years after their television series ended, the Powerpuff Girls — Blossom, Bubbles and Buttercup — made a return to the Cartoon Network on Monday April 4. We checked out the first few episodes which are stocked with updated references and a delight. Fun times!
Maybe Animaniacs will come back next. One can only hope.
Note: Doc wants readers to know that older episodes of Animaniacs are now available on Netflix.
Smile Inducing 2.0: Shout out to John Scott
Cute & adorable – John Scott & Family.
This week, John Scott got called up to play a game on the Canadiens home ice. According to Canadiens coach Michel Therrien, this was a “thank you for being a professional.”
“That’s just what this organization’s all about; it’s a class organization,” said Scott. “I don’t deserve any of this.”
But it was clear the Canadiens felt he did.
In his curtain call — much like he had throughout the season — Scott offered a valuable message for sports fans and media members to consider.
“I think it’s always important to realize that we are just normal people,” he said. “People put us up on these pedestals and they expect us to be like perfect humans, but I go home to my family just like everyone else in this locker-room. And we all have feelings and stuff like that. You know, it’s a good lesson.”
Doc suggested the “Song of the Week” for this NVC post with its bubble up theme of innovation and re-imagination. He came upon a dance mix version of Samuel Barber’s “Adagio for Strings” (1936) by Dutch DJ Tiësto.
What’s interesting is how Barber’s version has earned the label of the “saddest song.”
The dance mix certainly blows up that notion.
That’s a wrap!
Thanks for reading / listening and, as always, #SCMF.
–The Gang
P.S. Seems like YouTube is going overboard with forcing you to pay a toll before listening / watching videos. This is way annoying and does the advertiser no good because it fosters ill-will (you’re blocking me… my time is valuable and you are wasting it).
We highly recommend that NVC /AWSI readers keep viewing devices on mute for the first 15 seconds for the sake of continuity (the flow from words to multi-media).
>> To YouTube and others trying to earn advertising revenue, please (please, please) stick to “on the side” placement and with enough creative and relevancy to make it earn a click-through. Thank YOU!!
Trying to stay relevant. Staples launches breakroom makeover contest with $40K payoff.
http://www.mediapost.com/publications/article/275246/staples-wants-to-give-breakrooms-a-makeover.html
Quick update: Wired story states “ELON MUSK MOVED his desk. He now sits at the end of the production line at http://wired.com/tag/tesla-motors factory in Fremont, California, and he’s stashed a sleeping bag in a nearby conference room.
He’s done this, he said during a conference call with investors, to emphasize how seriously he takes the epic task ahead of him: Building hundreds of thousands of Model 3 sedans each year and selling them at a price the masses will pay, while turning a profit.
http://www.wired.com/2016/05/tesla-just-made-huge-model-3-challenge-even-huger/?mbid=nl_5516