The 'Shock Of The Newest' In Coin-Op

Posted On: 11/22/2017

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As I prepared this column the business pages were filled with news of seemingly solid, high-profile companies failing while the most unlikely offbeat and eccentric enterprises are prospering beyond all expectation. This is not just a matter of "bricks-and-mortar" businesses falling prey to the Internet, though there is certainly some of that in the current listing of financial fatalities. What really seems to be at work are market forces that many businesses have chosen to ignore out of corporate hubris or the aggressive indifference by lower-level line employees.

The real challenge for businesses today isn't simply reducing costs and seeking efficiencies, but that far more nebulous goal of keeping the offerings fresh. While it is true that consumers favor the familiar, they are also seeking the unique experience. This is particularly true for those much-valued young consumers. A store employee recently complained to me that management mandated doubling the number of times window displays changed per year. Located in a heavily trafficked part of the city, there was a fear that the window display would become unseen if it remained in place for too long.

Skill crane and bulk vending operators have picked up on this strategy. Several have related how they are changing out merchandise with increased frequency. This trend, which began several years ago, has accelerated. As some have noted, they are not even necessarily offering recently released merchandise with each change they are simply offering a new product. These changes, they say, instill a sense of urgency to play and anticipation to see what is offered next. It should be noted that the changeup in merchandise is not timed to a dramatic dropoff in sales. Very often, they take place just as the merchandise has passed its peak sales level and is beginning to decline or level off.

Just as with merchandise, the same theory can be applied to promotions. The constant changeup in promotions by FECs keeps visits to a location fresh.

This strategy is more than just slapping the word "new" on an established product. Today's consumers are too savvy to fall for that old marketing ploy. Marketing the "new" requires a new perspective on potential consumers. Not long ago, I watched a television commercial with an ad agency person in which the actual product advertised barely made an appearance. No doubt, it was a compelling commercial, but where was the product? "It's not about the product, it's about the consumer," the executive said. "They either are the woman in the spot (commercial) or want to be that woman." Presumably, buying the product on a regular basis will help them achieve that goal.

More proof of the value of "new" and its presentation can be seen in the popularity of so-called "barcades." Typically boasting an assortment of classic videogames, longtime coin-op amusement operators may look at the phenomenon and see a longing for nostalgia when it comes to out-of-home entertainment. However, if they look more closely at these establishments, they'll also almost always see a wide assortment of seasonal craft beers and niche wines for sale. An offering of 20 beers or more in such establishments is not unusual. The millennials may frequent these establishments for a taste of past technology, but they are also expecting the latest and greatest when it comes to their choice of adult beverage.

To state it in a glib manner, you could say, "new is the newest new." The trick, as always, is how to sell it to consumers. This means some older dogs will need to learn some new tricks.