THE CEO’s BLOG


What Happens When Everyone Has Everything? Part One.

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I recall starting the company and deciding that I needed a computer to help beat the competition. I worked with a company called Computerland and bought an IBM 386, dot printer, monitor and installation for $5,000. It was amazing. Every invoice was printed on an Okidata 186 printer with pin feed paper. So it took 2 minutes to print, it was a marvel. The rest is history, PC’s could not be made fast enough.

Then in 1989 I decided I had to have the first fax machine to help beat the competition. It was the size of a couch and cost $2000. But who cared, I could now fax orders to vendors instead of calling them in. The only problem was that I had to convince the vendors to buy a fax machine too. The rest is history, fax machines could not be made fast enough.

Then in 1995 I decided I had to be the first to have an Internet website to help beat the competition. Routers, servers, cables, IP address, it cost a fortune. But who cared, I could now sell products to customers without them calling our 800 number. The only problem was that I had to convince our customers to get online. The rest is history, especially the dot.com bust in 2001. Remember modem speed and Internet speed? Now LTE 5 is coming.

Then in 1996 I decided I had to have the first truly cool cell phone to help beat the competition. The Motorola Startak was just the trick. I never liked pagers and now I could call customers and vendors anywhere. It was so cool. The rest is history, cell phones could not be made fast enough.

Then in 2007 I decided I had to have the first Apple iPhone to help beat the competition. My designers were all on Mac’s but I was a Microsoft guy. Now with the new iPhone I could do just about everything anytime. It made the Startak obsolete overnight along with everything else. It was so cool. The rest is history, iPhones could not be made fast enough.

Fast forward to 2016. I haven’t needed to buy a single electronic device to help beat the competition. PC’s are dead. Fax machines are gone. Everyone is online and has a smartphone. Heck even my 4-year old grandson has an iPad and is connected. Everyone has everything. No wonder Apple sales plunged for the first time since 2007 last quarter. I mean really, what is the iPhone 7 going to do for me that the iPhone 6 doesn’t already?

This phenomenon is hitting every industry. It’s no wonder the economy is tepid at best. Where is the innovation to make us buy something? Right now the only electronic device we want to buy is Amazon’s Echo. But that certainly is not going to help anyone in business to be more competitive. At least the device makes it users talk.

It was only six years ago that CND launched Shellac, the first gel polish. I remember the launch well, only six shades. Why only six shades I asked? Formulation issues, bottle design, yadda-yadda-yadda. Plus we need to make sure there is a market for it. OK, I ordered 5000 bottles of each shade. And like innovative products of years past, it sold out. Hmm, this is good. I’ll take 5000 more of each color please.

Then they launched six new shades. I’ll take 7500 of each please.

But then the competition caught on. As more colors were launched, open quantities would diminish to 3000, then 2000 and then 1000 and less. Now there are more than 100 colors plus add the competition to the mix, there are more than 1000 colors. Walk into any nail salon and witness at least 300 colors sitting on the shelf, most collecting dust. What happens when every salon has every color they need?

Nail polish is no different. Oh I can talk about when Essie was $1.00 a bottle and nail techs would go to trade shows and buy 100-200 bottles at a crack. We sold Peau de Peche nail polish at one of our trade shows and sold more than 5,000 bottles in a day. OPI at one time had four booths at the Chicago show to keep up with demand. But now every salon has every color they need. What happens next?

Hair dryers, flat irons, clippers all equal one giant yawn. Dyson thinks they have the answer and are launching their first hair dryer for $399.95 this fall exclusively at Sephora.  Unlike a smartphone, I don’t think this will connect to the Internet and place an order on Amazon. But at least one company is trying to spur innovation and get consumers to buy a new product.

Part Two will focus on where the growth is (are you hungry?) and what the future looks like (sorry but VR is not going to help me beat the competition).

Happy Tuesday!

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