EWOT Goggles #9

I subscribe to a magazine called the Sports Business Journal. The content of the magazine includes exactly what the title says- business from the sporting world.

I enjoy reading the magazine because it allows me to apply a lot of my economic learnings from class to sports, which is my biggest passion in life.

San Francisco Giants Pillow Pet

Yesterday, I read an article about a new fad in the sports merchandise world called "Pillow Pets" (see picture to the right). Basically, they are stuffed animals that can be "un-velcrowed" from the stomach to transformed from a cute and cuddly friend into a pillow.

Apparently, Pillow Pets have been making record sales since they came into creation. Their sale has boomed even more since the company who initially produced Pillow Pets recently licensed the product to another company, Fabrique, to begin putting sports logos on the pets.

Take a look at Pillow Pets revenue generation since its inception in 2007 (Pillow Pets sell anywhere between $15-$30 apiece):

• 2007- $300,000
• 2008- $3 million
• 2009- $7 million
• 2010- more than $300 million

I was absolutely astonished at these figures. When I read how much money these pillows were generating, I thought to myself how ridiculous it was. I initially thought to myself- "who needs such a pillow? They are so useless! I can buy a more than sufficient pillow for much cheaper than $15 to $30. What a waste of money!"

But I continued reading the article and this is what Brian Jennings, NHL executive VP of marketing, had to say about the item's success: "They hit a great combination of the right emotional chord and the correct price point."

Bryan Swallow, VP of marketing and sales at FootballFanatics.com, said that "Adults like them because they're a connection to their favorite team. Kids need pillows for car rides, nap time or whatever, so they won't be dropped in the toy chest and forgotten."

These quotes brought me back to what we learned leading up to the first midterm. Although they may seem to be, these pillows are not at all useless and are well worth the money because people VALUE them. As we learned with the Jibbitz fad Prof. Rizzo loves to refer to: no matter how useless an item might seem, it cannot actually be referred to as useless if there are a significant amount of people who value it and are willing to pay for it.

This led me to reconsider my initial thoughts. I now realize that the Pillow Pet fad is not a useless fad but rather a useful fad. For one, it allows parents and children to connect with each other through a parent's favorite team being the pillow for a child. Thus the child gets to become a fan of the same team the parent likes by being exposed to a stuffed animal/pillow with a sports team logo on it.

Perhaps some day I will buy a Pillow Pet for my own children. After all, I do want my own children to get sufficient rest- and be a Philadelphia Phillies fan just like me!