Fads are hard to miss. Whether it's this summer's craze -- Silly Bandz, the rubber-band bracelets that have become a must-have accessory for children -- Beanie Babies or the Rubik's Cube, they take off like a rocket in popularity and then seem to fizzle out just as quickly. You might think fads are kids' stuff. But adults aren't immune to the fad machine -- remember all those grownups sporting Crocs a few years ago? And while fads present challenges to businesses riding that wave, they can also spell opportunity if managers are smart about taking the cash generated by these crazes and using it to build a sustainable business.
So what is a fad exactly? Bryan Lilly, a marketing professor at the University of Wisconsin, describes fads as a sudden and unpredictable spike in sales in which consumers are buying a product as much because of its popularity as its usefulness. Lilly notes that while fad products eventually experience a rather abrupt decline in sales, revenues don't necessarily fall to zero.
The latest must-have item for a growing number of kids -- and more than a few adults -- are Silly Bandz, brightly colored bracelets shaped like animals, letters, princesses and dinosaurs, among others. A pack of 24 Silly Bandz -- which have spawned numerous imitators -- sells for around $5 and can be found at toy stores, drug stores and even hardware stores. Robert Croak, founder of Silly Bandz maker BCP Imports, told The Wall Street Journal earlier this month that the bracelets have generated more than $100 million in annual sales. A former concert promoter from Toledo, Ohio, Croak began making and selling the bands after seeing a similar product from Japan. Although Croak told the paper that BCP is trying to diversify with other "silly" accessories including buttons and necklaces, and even taking design suggestions from fans via the Internet, many observers warn that history shows the bracelets' popularity is a bubble waiting to burst.
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Author: Knowledge@Wharton
