Snuggle Up with a Crowd- The Story of the Snuggie, a Blanket with Sleeves
A fleece blanket is nothing new. A sweater is old hat. But combine them, and you have created a pop culture icon, the Snuggie. The Snuggie is a blanket with sleeves that swept through American pop culture in 2008 and 2009. In 2008 alone, over 4 million units were sold (http://www.chacha.com/question/how-much-of-a-profit-has-snuggie-(the-blanket)-made) . The Snuggie was featured in news stories, written about in articles, and parodied in hundreds of Youtube videos. Today though, the predominance of the Snuggie as a gag gift, or a real purchase, has declined tremendously. What led to this explosive popularity? In this post we explore the information and buying cascade of a new product, as well as network effects on value.
The Snuggie was not the first blanket with sleeves to enter the market. The Slanket, an extremely similar product, has existed for years. The Snuggie reached its level of popularity due, in part, to its extensive advertising and marketing. The company behind Snuggie, Allstar Marketing, explains that marketing and consumer outreach was a major part of its plan to promote its product (http://www.time.com/time/magazine/article/0,9171,1873112,00.html). The Snuggie was first sold through a Direct TV Marketing campaign- a sales technique using TV ads to entice viewers to make impulse buys for new products. With the Snuggie, as with many DRTV marketing campaigns, the goal is to start a buying cascade for a new product. A buying cascade begins when a company persuades an initial set of people to adopt the new product. Those who make later purchasing decisions may adopt the product even if it is no better than existing products. This strategy becomes even more effective when later consumers can see the decisions to purchase, but not how satisfied the early consumers were.
For consumers of the Snuggie, the product has both individual value and population-level values. At the most basic level, a blanket has an intrinsic value. If you’re cold but want to use your arms, a Snuggie is actually a decent solution. A person would have value for the product on its own. Without network effects, the Snuggie would have only reached a small group of people that really wanted it. However, in order to make the leap from this small audience to a broader set of people, the Snuggie had to have network value. This is where the ads for Snuggies played a huge role. Snuggie commercials were ridiculous. People wearing it looked like, as one blogger stated, members of a “laid-back satanic cult” (http://www.time.com/time/magazine/article/0,9171,1873112,00.html). The absurdity of the product and its commercials caught the attention of bloggers, Youtube members, comedians, and even major news sites. Bloggers ridiculed it, hundreds of video parodies were made, and the Snuggie was discussed on TV networks like ESPN, Comedy Central, and CNN (http://www.time.com/time/magazine/article/0,9171,1873112,00.html). It became publicly accepted that this product would cause a laugh. And here the network value arose. If a gift is given as a joke, or if a product is used ironically, the consumer gets more value if more people are “in” on the joke. If you were using a Snuggie ironically, but people didn’t know this, you wouldn’t get the positive payoff of being seen as witty and funny, but rather a negative payoff of being perceived as a little strange. Thus, the more people that knew about the Snuggie, the more valuable it became. Consumers saw that other consumers were buying the product and presumably getting positive payoffs in the form of laughs and enjoyment. These customers wanted that positive payoff, and would buy the product themselves. A cascade of information-the Snuggie is a funny blanket- and a cascade of buying began. It is important to note that the potential buyer has no way of confirming that the Snuggie has the intended effect of being funny and enjoyable. All he or she knows is that other people (bloggers, comedians, news anchors) are purchasing the item.
But what about today? Why hasn’t the Snuggie become a staple in the American household? We can assume that this product, ultimately, had a negative payoff. As with any product that has an overall negative payoff, a cascade may start with it being adopted, but eventually, the product will be abandoned. The Snuggie had an explosive start. However, complaints about the material quality and the exposure of one’s entire backside lead us to believe that for most people, purchasing the Snuggie did not have a positive payoff. As this information became known, the individual value of the Snuggie became more well known. Also, as the funniness of the product declined, the increase in value due to network effects disappeared. Paying $19.99 for a so-so blanket became less and less appealing. And so we reach today’s state. The Snuggie is no longer an incredibly popular, funny product. But it will always be remembered for its brief, glorious, and snuggly moment of fame.