Does Good Service Mean Slow Growth?

The Wall Street Journal: “Economists seeking to explain slowing productivity growth have pointed to a downturn in global innovation. Overlooked in that debate is how hard it is to innovate in services, which are lapping up a growing share of consumers’ budgets as goods prices fall.”

“Growth in productivity—the goods and services a worker produces in an hour, a key determinant of wages and living standards—has petered out along with a slowdown in technological advances, which typically reduce the time spent to build a laptop or car … It has been even more stubborn, though, on the services front. People want their hairdressers and therapists—and even their accountants and lawyers—to take their time, often the definition of good service.”

“American economist William Baumol dug into this phenomenon decades ago, exploring how an expanding service sector can hobble productivity growth. He illustrated his thesis with the extreme example of the performing arts. ‘It’s fairly difficult to reduce the number of actors necessary for a performance of Henry IV,’ Mr. Baumol, now a New York University professor, wrote in his landmark 1965 article.”

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Millennials Shun The Grocery Store

The Wall Street Journal: “Grocers are struggling to lure e-commerce-loving millennials into their aisles amid what experts say is a permanent shift in shopping patterns among consumers. Baby boomers used to bring long grocery lists to supermarkets and club stores. Now shoppers in their 20s and 30s are visiting supermarkets less frequently than their parents … They are spreading purchases across new options, including online grocery services such as AmazonFresh, beefed-up convenience stores and stronger food offerings from omnibus retailers like Wal-Mart Stores Inc. and Target Corp.”

“Consumers between 25 and 34 years of age last year spent an average of $3,539 on groceries, about $1,000 less in inflation-adjusted dollars than people that age spent in 1990, federal data shows … The shift away from big grocery bills wasn’t as obvious before the financial crisis saddled millennials with student debt and weak job prospects, and placed a lasting drag on consumer spending.”

“The more than 75 million Americans born in the 1980s and 1990s are also delaying marriage and childbearing, milestones that traditionally lead people to start making big trips to the grocery store … To win over the key young consumer group, some supermarkets are testing smartphone apps that customers can use to place their orders in advance, and introducing new product lines.”

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Campbell’s ‘Habit’ Fuses Food & Technology

Philadelphia Business Journal: “Campbell’s Soup Co. has become the sole investor of a San Francisco-based company that combines nutrition, technology and food delivery into one bundle. The Camden-based food company is investing $32 million in Habit, a personalized nutrition company that will launch in 2017. The company develops nutrition recommendations based on a person’s biology, metabolism and personal goals, and it creates a so-called personal blueprint.”

“Habit then delivers customized meals to the person’s doorstep, and offers one-on-one wellness and nutrition coaching as well … Habit users are given an at-home test kit that measures more than 60 different biomarkers, including nutrition-related blood markers and genetic variations in DNA. Users also provide body metrics like body weight and height, as well as health goals. Habit then synthesizes the data to determine food and nutrients best suited for each individual.”

Campbell’s CEO Denise Morrison comments: “The entire food industry is being transformed by the fusion of food, well-being and technology … Campbell’s investment is part of our broader efforts to define the future of food, which requires fresh thinking, new models of innovation, smart external development and venture investing to create an ecosystem of innovative partners.”

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Veggie Tots: The Future of Frozen Food?

Bloomberg Businessweek: “Big Food is betting that frozen food, a relic of Sputnik and the Mickey Mouse Club, can stir the hearts and palates of the quinoa generation even as sales figures have fallen each year since 2009. The products need to overcome a reputation, some of it earned and some not, that the meals found in your grocer’s freezer, often packed with sodium and preservatives, taste meh.”

“B&G is wooing millennials with frozen ‘veggie tots’ with broccoli and cauliflower. Kraft Heinz’s Devour line includes recipes like white cheddar mac and cheese with bacon, pulled-chicken burrito bowls and pesto ravioli with spicy Italian sausage … Conagra Foods Inc., the maker of leading brands Marie Callender’s and Banquet, is trying to bring some foodie prestige with its Wicked Kitchen line, which the company says was inspired by food trucks.”

“B&G is approaching the future with a little bit of the past. The pickle and snack company’s purchase of Green Giant nearly doubled its size and marked its first foray into the freezer case. It’s betting the Jolly Green Giant will tap into the nostalgia of parents looking to put vegetables on the dinner table while finding a new audience with millennials.”

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30,000 Feet: The Ascent of Bad Behavior

The Wall Street Journal: “A lot of things happen on airplanes that don’t regularly occur at the mall, theater, ballpark or neighbor’s house. The thin air and high stress, plus attitudes toward airlines and their employees, seem to foment rude, even violent behavior—not to mention all the disgusting things your mother told you never to do at home.”

“The International Air Transport Association, a Geneva-based airline trade association, says unruly passenger incidents are growing at a rapid clip world-wide. Airlines reported 10,854 unruly passenger incidents to IATA in 2015, up nearly 17% from the prior year. That’s about 30 incidents a day … “’t does seem the issue is getting worse,’ says Chris Goater, IATA spokesman in Geneva.”

“Asked whether air-travel conditions—high load factors, cramped seating, baggage fees and space shortages, delays and long lines—play a role, Mr. Goater of the IATA says airlines don’t think there’s evidence.”

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Animalis: Beauty & The Beast Within

The New York Times: “Maybe it’s the desire of millennials to reclaim their beastly odors in an age of technological detachment, but fragrance buyers are newly excited to smell as if they come from an elegant zoo … A new line capitalizing on this trend is Eris Parfums, a collection from Barbara Herman.”

“Ms. Herman found that many of her favorite vintage perfumes relied on a base accord called Animalis … an unctuous golden liquid comprised civet, castoreum, costus and musk, and smelled a bit like body odor, dirty scalp, perspiration, butter and a horse stable. Though it sounds unappealing on its own, when combined with other materials, consumers couldn’t resist it. Animalis found its way into popular scents like Robert Piguet Visa and YSL Kouros.”

Stephen Dirkes, a self-taught perfumer, comments: “I like to think about how fashion is often elevated as an expression of personal style, like art you can wear, but it’s also an expression of self-loathing. Grasse, in France, where great perfumery came from, was also a tannery town. The smell of death and the smell of flowers went hand in hand.”

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The Content Trap: It’s All About Context

The Wall Street Journal: “To be sure, content is important. But what matters more is the connection between that content and the rest of the master plan … Information wants to be shared: Indeed, it is hard to find an area of news or entertainment where the real consumer value arises independent of a social element. If you believe you are in the business of information, you are blind to the fact that you are in the more lucrative business of socialization.”

The Content Trap is a book filled with stories of businesses, from music companies to magazine publishers, that missed connections and could never escape the narrow views that had brought them past success. But it is also filled with stories of those who made strategic choices to strengthen the links between content and returns in their new master plans. The author shows that ‘winning strategies come from recognizing the context you operate in, not the content you make’.”

For example: “Often … books bought were not books read. They were, in part, meant to be displayed in homes or on desks as a signal that the person might have read them. For e-books, the situation is different. That’s why the romance genre flourished under the digital onslaught. Random House, it turned out, had one of its biggest print successes of recent years when it acquired Fifty Shades of Grey, a book that people don’t claim to have read if they haven’t.”

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Donald vs. Hillary = Sales vs. Marketing?

The Wall Street Journal: “Jeremy Brandt, CEO of WeBuyHouses.com, has had to referee between the sales and marketing departments of his Dallas-area company after some incidents this summer, when members of the largely Trump-supporting sales team burst into the marketing department shouting ‘crooked Hillary,’ Mr. Trump’s nickname for his rival. The marketing team, most of whom support Mrs. Clinton, told the CEO they were fed up.”

“Conflicts aside, productivity is taking a hit as discussions of the latest campaign twists consume working hours … WeBuyHouses.com’s Mr. Brandt said he expects a return to normal once the election is over—but not right away. It may take three or four weeks, he said.”

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Study: Is Happiness Bad for Creativity?

Quartz: “Computational scientist Anna Jordanous at Kent University and linguist Bill Keller of Sussex University in England dug through through over half century of study on the creative process in various fields, and isolated 14 components of creativity. Happiness wasn’t one of them … rigor is the key to overcoming obstacles and completing tasks—and good mood doesn’t improve problem-solving, which involves judgments that almost by necessity won’t feel good: critique and evaluation, experimentation and failure … In other words, negative emotions are actually beneficial to the creative process.”

“Likewise, Rice University psychology professors Jennifer George and Jing Zhou have found that challenges don’t necessarily make us happy, but they do yield good creative work. That’s because, their work found, when bad moods or feelings are expressed they signal problems—which then inspires fixes and improvements.”

“Over 160 employees reported on manager support and personal moods during a week while their bosses assessed them on their creativity. The workers who were rated most creative reported experiencing both strong negative and positive moods and felt they had supportive managers. Happier workers with good bosses, however, were rated significantly less creative than those with mixed emotions. Employees with mixed feels and bad bosses rated least creative.”

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The Nightmare Machine: Scary or Not?

Quartz: “A series of algorithms dubbed the Nightmare Machine is an effort to find the root of horror by generating ghoulish faces, and then relying on user feedback to see which approach makes the freakiest images … Each “scary” or “not scary” vote in MIT’s game pulls the best fit line slightly in some direction: more teeth, paler skin, darker background. With enough information, the AI could theoretically generate the sum of human fears.”

“While it’s a fun game around Halloween, the project also shows how quickly AI research is progressing. The two main techniques used in the project, style transfer and generative adversarial networks, were published in papers only last year. Now the technology is easy enough to implement in a novelty project made by just three computer scientists.” Here’s a link to the project.

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