Minimalism: Retailers Unleash the Power of Scarcity

Quartz: “Shoppers are rewarding nimble digital-first brands, such as Everlane, which practices ‘radical transparency’ in product manufacturing and pricing. They clearly explain how the supply chain works to their customers and where margins are made. Another example is the seasonal Shoe Park in New York City, where customers trade their shoes at the door for a pair from the new collection … These new models are showing traditional retailers that a physical store should be an extension of the brand story, not a warehouse. In this way, the in-store experience isn’t dead; it’s just returning to its roots as retail theater.”

“Nike and Adidas have learned that creating an event around selling fewer shoes as ‘limited edition’ items means more revenue … Successfully selling a smaller line of products rather than letting a larger line linger into discount obscurity is the new way of doing business. Limited product availability also creates an experience for the consumer, as the process of securing the product becomes part of the item’s story and increases the buyer’s connection with it.”

“In order to create a more sustainable business model for modern merchandise, retailers need to unlock the power of scarcity. The model of throwing more stores, products, and discounts into the market with the hope that shoppers will keep buying is no longer working. Minimalism is here to stay. But rather then fight the trend, retailers can use it to their advantage and craft organizations that create more value, more loyalty, and ultimately more revenue.”

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Robo-Shop: Not an Automatic Win

The Economist: “The idea is that a combination of smart gadgets and predictive data analytics could decide exactly what goods are delivered when, to which household. The most advanced version might resemble Spotify, a music-streaming service, but for stuff. This future is inching closer, thanks to initiatives from Amazon, lots of startup firms and also from big consumer companies such as Procter & Gamble.”

“Buying experiments so far fall into two categories. The first is exploratory. A service helps a shopper try new things, choosing products on his or her behalf … The second category of automated consumption is more functional. A service automates the purchase of an item that is bought frequently … If a shopper automates the delivery of a particular item, the theory is that he is likely to be more loyal.”

“But neither Amazon nor the big product brands should celebrate a new era of shopping just yet … One problem may be the e-commerce giant’s prices, which fluctuate often. Another report … found that far more British consumers would prefer a smart device that ordered the cheapest item in a category to one that summoned up the same brand each time. That suggests that automated shopping, as it expands, might make life harder for big brands, not prop them up.”

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Ikea Keeps Getting Cheaper & Cheaper

FiveThirtyEight: “In many cases, Ikea’s famously affordable pieces get dramatically cheaper year after year. In others, prices creep up. In some cases, products disappear entirely. The result is an ever-evolving, survival-of-the-fittest catalog that wields an enormous amount of influence over residential interiors. As we tour Ikea’s unique economics, you may want to have a seat in the company’s Poäng chair, 1.5 million of which are sold each year.”

“Furniture has generally gotten cheaper relative to other goods over the years — likely due to effects of globalization — but this chair’s trend stands out. In the early 1990s, the chair couldn’t be had for less than $300, adjusted for inflation. Today, it’s $79 … Other Ikea mainstays have followed Poäng’s path, plummeting in price as the years pass. The warhorse Lack table, for example, sold for $25 in 1985 ($56 in current dollars) but goes for just $10 today. Iterations of the Billy bookcases have seen big drops, as well.”

“More generally, there is another common pattern in Ikea pricing.” Boston University economist Marianne Baxter comments: “If they’re going to increase the price, they do it by little bits all the time. But if they’re going to decrease the price, those decreases tend to be big and noticeable, and they get advertised.” Ikea’s Marty Marston explains: “On average, the prices would go down, from year to year, 1 percent overall.Some prices could go down with a huge jump. Other prices may increase slightly. But overall, year on year on year on year, we’re trying to reduce prices.”

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REI-mania: Flagship Store Was Beatles Arena

The Washington Post: “The vaulted, concrete-domed Uline Arena in Northeast Washington” is now the “East Coast’s largest REI store, a popular outdoor specialty chain that hopes to become a destination in the nation’s capital … Ice distributor Miguel Uline opened the eponymous arena in 1941 as a hockey rink and repurposed it into housing for service members during World War II. After the war, it was restored as a hockey and basketball arena … it was 1964 when the arena … made its biggest headline: The Beatles performed their first U.S. concert there shortly after their famed ‘Ed Sullivan Show’ appearance.”

‘Throughout the 1990s, the arena served as a trash-transfer station until Douglas Development purchased the property in 2004 … The 51,000-square-foot REI store now joins a changing NoMa landscape filled with luxury condos, office buildings and retail shops.” Norman Jemal of Douglas Development comments: “This is transformative. We looked at it as a game-changer for the community. You’re talking about a lot of history here. A lot of Washington, D.C., here. It touched a lot of people.”

“As an ode to the arena’s history, columns throughout the store are covered with concert posters of the Beatles, go-go bands and artists who performed there. One wall contains rows of seats from the original basketball arena … The store has event rooms, a courtyard and a La Colombe Coffee cafe. The National Park Service also has a kiosk inside, where an employee from the federal agency will be on hand to recommend outdoor travel destinations to customers.”

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Chick-fil-A & Arby’s: With Sugar on Top

Business Insider: “Chick-fil-A leads the industry in customer satisfaction, regularly topping the American Customer Service Index’s annual ranking. Compared to employees at 15 chains, employees at Chick-fil-A are the most likely to say ‘please’ and ‘thank you,’ and to smile at drive-thru customers, according to QSR Magazine’s annual drive-thru report.”

“In this area, Chick-fil-A has a leg up on the competition due to its structure. Each franchisee operates just one location, allowing for more hands-on training. Typically, franchised chains like Arby’s, KFC, and McDonald’s don’t have a set limit on how many locations a franchisee can open, with franchisees operating up to hundreds of restaurants.”

“Realizing the difficulties in achieving consistent quality across 3,300 locations worldwide, Arby’s began prioritizing customer service a few years ago in an effort to catch up to chains like Chick-fil-A. In 2014, the chain began requiring all employees to attend an annual Brand Champ training. The training attempts to both help employees understand why Arby’s operates the way it does and assist workers in achieving their own goals, in and out of Arby’s.”

“One of the biggest distinguishing points between the chains that are thriving and those that are struggling is customer service. Customers return to and become loyal to chains where they can expect accuracy, friendliness, and a simple ‘please’ and ‘thank you’.”

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Secret Sauce: From Condiment to Cliché

Ben Zimmer: “These days, ‘special sauce’ (or sometimes ‘secret sauce’) inevitably comes up whenever someone is describing a closely guarded feature that is regarded as crucial to the success of a product or service … But ‘special sauce’ didn’t become truly special until McDonald’s added the Big Mac to its national menu in 1968, after months of secret experiments in its food labs and extensive field testing … Those who came of age in the 1970s can still recite the Big Mac ingredient list by heart: ‘two all-beef patties, special sauce, lettuce, cheese, pickles, onions, on a sesame-seed bun’.”

“As a mnemonic and earworm, the jingle was extremely effective, and it also helped launch a more figurative meaning of ‘special sauce,’ for key ingredients beyond the world of burgers … Meanwhile, it turns out that the Big Mac special sauce isn’t such a closely guarded secret after all: A 2012 YouTube video by a McDonald’s executive chef revealed that the sauce could be made at home with mayonnaise, pickle relish, mustard and a few other condiments.”

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Bite Back: The Unintended Cost of Innovation

The Wall Street Journal: “Innovation has been a relentless source of human betterment, yet it commonly brings grim and often unanticipated side effects. ‘It is inconceivable to think of any innovation that doesn’t bite back,’ says Joel Mokyr, a technology historian and economist at Northwestern University. Bite-back, as Mr. Mokyr calls it, may help explain why today’s advances in technology, transport, energy and medicine don’t seem to translate into rising standards of living.”

“The explosion in social media and connectivity made possible by the internet and smartphones has, with a lag, also brought viruses, hacking, and identity theft, not to mention cyber bullying by mean teenagers and terrorist recruitment by Islamic State. Every office loses productivity to web surfing … Videogames today are magnitudes more sophisticated and immersive than those of 20 years ago, but that has a dark side: They may make jobs less appealing.”

“Today, seven of the top 10 problems … most in need of innovative solutions are instances of bite-back. They include global warming, antibiotic resistance, obesity and information overload. Nonetheless … for every unintended consequence one innovation brings, another innovation will find the answer. Fluoridation cured tooth decay, and automotive engineers found alternatives to leaded gasoline. And distracted driving? Driverless cars may take care of that plague before long.”

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Attention Merchants: The Audience is the Product

The Wall Street Journal: In The Attention Merchants, Tim Wu … identifies us as victims of a slow-motion crime, a more-than-century-long hijacking of our inner lives by commercial interests that began in 1833. That was when a 23-year-old printer named Benjamin Day invented the modern newspaper by using low prices and salacious content to build circulation—then packaging his audience to advertisers. That business model has adapted to every technological advance since the printing press: radio, television and, most devastatingly, the internet.”

“Mr. Wu unveils an online rogue’s gallery that includes Steve Case, Larry Page, Mark Zuckerberg and Jonah Peretti, co-founder of the Huffington Post and his Frankenstein monster of clickbait, BuzzFeed. Mr. Wu is best when analyzing how the internet has taken the attention wars to a new level of sophistication, with machine-learning algorithms, tracking cookies and listicles … Mr. Wu is particularly harsh on the Huffington Post, which, he concludes, was never meant to be a business, ‘just a giant vacuum sucking up human attention’.”

“More recently, viewers are choosing to watch television on Netflix and other services that eschew advertisements. Yet those reversals seem only temporary, because, to Mr. Wu’s dismay, advertising remains the default business model. Internet moguls are perpetuators of Benjamin Day’s original sin—a business whose product is not the content but the audience.”

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Glenn Gould, Steve Jobs & Perfection

Macleans: Glenn Gould, a Canadian musician who died 34 years ago, is “featured in a recurring presentation delivered by professor Joshua Cohen to senior managers at Apple University … Most at Apple aren’t familiar with Gould … But the more they learn about his lofty vision of creating a transcendent experience for listeners and his ultra-perfectionist ways, the more they realize Gould wasn’t all that different from the late Steve Jobs … Cohen says they also quickly come to appreciate Gould’s whole-hearted embrace of technology, as demonstrated by his controversial decision in the 1960s to focus exclusively on studio recording.”

“But perhaps the biggest lesson Gould holds … was his belief in creating something that’s not only new and different, but eminently worthwhile. ‘There’s this really large human purpose that guides the work,’ says Cohen. ‘It’s not innovation for innovation’s sake’ … Cohen’s presentation on Gould is just one of several he gives at the university … It’s part of a series called ‘The Best Things’—a reference to a remark that Jobs once made about ‘trying to expose yourself to the best things that humans have done, and then try to bring those things into what you’re doing’.”

“Equally as compelling for Apple employees is Gould’s forward-thinking attitude about technology. Gould once told an interviewer in 1966 that live audiences were a ‘force of evil’ because pleasing them took precedence over his pursuit of perfection. ‘I really thank God that I’m able to sit in a studio with enormous concentration and do things many times, if necessary,’ he said … At its core, Cohen says Apple’s mission is indeed to develop products that should be built, not finding a way to shoehorn every piece of new technology into people’s lives, wanted or not.”

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Being Nice Wins at Work & in Life

Arthur C. Brooks: “Notwithstanding the prominent examples today in political and popular culture, the best available research still clearly shows that in everyday life the nice people, not the creeps, do the best at work, in love and in happiness … In one 2015 study … in addition to being seen as natural leaders by co-workers, nice employees performed significantly better than others in performance reviews … For those who make it to leadership … a 2015 NBC poll found that most people would take a nicer boss over a 10% pay increase.”

“On the other hand … In 2012, research published in the Journal of Personality and Social Psychology found that while those with high levels of ‘agreeableness’ were less likely to be fired, they didn’t make the most money. It is important to note that these researchers’ definition of agreeableness included ‘compliance’ with the will of others. In many cases, however, compliance is not niceness; it is weakness. To be truly nice is not to comply when you disagree, but rather to disagree without being disagreeable. It isn’t to please at any cost, but rather to avoid being unpleasant even while standing up for what is right.”

“Niceness certainly is not a substitute for more active virtues like generosity and courage. But it’s a good start, and perhaps the easiest way to improve our lives. These days it is also a countercultural statement. To be nice is to subvert a pop culture that celebrates tactical nastiness—and instead choose a long-term personal strategy to build a happier life in a better world.”

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