Retail Club Sites

Tim's Foundry site (I still can't find that one) reminded me of my very favorite eCommerce model that is getting very popular...club sales sites. They pretty much work like Costco, you become a member and get access to great deals (usually 50% off retail, or more). Unlike Costco, you don't have to pay to join. Usually, you have to be invited by a current member. Or just send in your email and they sit on it for a few days before you get "approved". they're trying to create EXCLUSIVITY here, folks. This is a CLUB, not just a regular internet retail store, right? Right.

Another great part about this, is that these clubs usually reward their evangelists. If someone signs up through you, you get store credit towards purchases. So, if you know a bunch of people interested in similar stuff, you can end up with some really big discounts.

Here are a few of my faves:
TheClymb.com - Outdoor Stuff
LeftLaneSports.com - Sports Stuff
Ideeli.com - Designer Clothes, Travel
Fab.com - Design-forward home stuff and clothing
MyHabit.com - Hip clothes

These sites are an interesting way for brands to clear out excess inventory without devaluing their product on the open market. They also use social media really aggressively in pushing their stores, which is a smart, cheap way to find loyal customers. You won't see any of these deals show up on Google shopping, they're "private events". For the consumer, it's a fun way to get great deals on cool stuff.

Full disclosure: A few of those links are will put me down as a reference for membership, so use them!

Got more? Feel free to share in your comments....

Effect of Internet on Trademark Law

Article: Trademarks Take On New Importance in Internet Era

Related Class Topic - Please refer to the notes from week 2 regarding web privacy/trademarks and chapter 14 reading on search engine optimization.

Overview of Article - This article is not a legal-heavy review of online trademark law but rather an illustration of how the internet has had an effect on trademark enforcement.  This article tells the story of a small snack-food entrepreneur, Warren Wilson, who got engaged in a major trademark battle with Frito-Lay (owned by Pepsi) when he tried to register the trademark for a new product he created called Pretzel Crisps (flat pretzel snacks). Frito Lay has biggest market share in pretzel segment with Rold Gold and a similar product called Stacy's pita chips.


“This fight is about a big company that wants to dominate the snack food category by crushing a little company like ours rather than by competing with us.”

Frito-Lay contends that Pretzel Crisps cannot be registered as a trademark because it is a generic term.  Meaning the combination of ‘pretzel’ and ‘crisp’ gains no meaning as a phrase over and above the generic meaning of its constituent terms.

"Brand experts and trademark lawyers say the value of simple, easily understood brand names has escalated in the Internet era because consumers are more likely to find such products while doing searches on the Web." 

Key point: Trademark is associated with search engine optimization.  The reason you trademark a word or symbol is because you believe it has value.  Frito Lay was focused less on the pretzel crisp product than on the words "pretzel crisp" because in this new digital era words are part of search engine value optimization.

Discussion Question 1:  Do you think Apple should be able to trademark the term "app store"? That is another example of a trademark battle ongoing with Microsoft and Amazon.

Web's  knowledge management capabilities have empowered society to discover violations of trademark law much more easily.  Trademark has always been enforced but now by simply typing a few keystrokes you can see everything and anything related to the brand or trademark in question.

Result has been difficult on small entrepreneurs because cost of fighting trademark battles is high and due to the raised stakes big firms are on the attack looking to silence any perceived competitors. In the Pretzel Crisps example, Warren Wilson expended $1 million on legal fees. 

Discussion Question 2: Should a company that loses a trademark dispute have to remunerate the affected company for their legal losses?

Warren Wilson has to prove that their is a secondary meaning to the term "pretzel crisps" beyond just the idea of a thin pretzels that are crispy.  A lot at stake as retail sales of Pretzel Crisps exceeded $100 million. 

Discussion Question 3: Is it easier or harder to manage a brand's value in the current digital world  than it was 20 years ago?  What are pros and cons of user generated content related to your brand?