Tuesday, January 30, 2007

Coolhunting for Computer Risks – a COIN of sorts

In the past, hackers trying to discover potential security breaches and computer vulnerabilities did it for fame. Not anymore! A lively market has sprung up, where according to today’s New York Times, companies like iDefense Lab, a subsidiary of Verisign, pay $4000 to $8000 for each new discovery of a vulnerability. Russian hackers make enough money that way to pay for their tuition. In online forums and bulletin boards, COINs of hackers are discussing and exchanging ways of breaking into computer systems, and then selling their insights to the likes of iDefense Lab. They have converted from glory seekers to cash seekers. That’s not how COINs usually operate!

Coolhunting and Coolfarming at Costco

While shoppers might go to buy a jumbo pack of toilet paper and laundry detergent at Costco, the world’s largest wholesale retailer, they are more likely to also walk out with a pair of fashion jeans, an iPod, or a large plasma TV – in addition to the toilet paper and laundry detergent. While a Wal-Mart stocks 100,000 items, a Costco makes 58 billion of annual revenue with just 4,000 items. It has become a terrific coolhunter, enticing its shoppers who came for daily necessities to also walk away with the latest and coolest gadgets, usually spending a couple of hundred dollars at every shopping expedition.

According to its own words, Costco is “..trying to figure out what customers really want.” For that Costco only stocks the most well-liked, trendy, and fast-moving items. It also gets it known that each of its items which is usually offered at a very attractive price is only available in very limited supply. This way, Costco combines its coolhunting efforts for the trendiest products with creating its own culture of cool. By having new items every time a customer comes to its store, it even tries to create a “treasure-hunt atmosphere”. By discovering items at a deep discount right before they get off the shelves, customers experience an emotional thrill.
But besides offering an emotional shopping experience, Costco also treats its workers well: a typical cashier, after having worked for four years at Costco, according to an article at last Sunday’s New York Times makes about $40,000 plus benefits. Costco even has created a community of shoppers by countering conventional wisdom and charging its customers $50 per year to be allowed to shop at Costco. So far 24 million shoppers have signed on. Coolhunting and coolfarming combined!