Vegas Shuffle: Invasion of the Drink Bots

The Wall Street Journal: “As Las Vegas has transformed into one of the world’s most-visited tourist destinations, casino operators are re-examining the perks that historically lured gamblers. Over the past year, casinos have started charging for parking at resorts on the Strip … Now operators have started scrutinizing complimentary drinks, introducing new technology at bars that track how much someone has gambled—and rewards them accordingly with alcohol.”

“It’s a shift from decades of more-informal interplay between bartenders and gamblers … On a recent night at a bar inside the Paris Las Vegas casino, Jamie Balazs and her father were getting used to the new drink-monitoring system. They had just been instructed on how much they needed to put into the machine to allow booze to flow. A bartender told her to push the “max bet” button four times, she said. She said she understood the desire to weed out freeloaders who aren’t gambling but found the instructions off-putting.”

“Her father, Jim Fletcher, was in town with a group to celebrate his 70th birthday. As a top-tier member in Caesars Entertainment Corp.’s rewards program, he felt the new system was ‘insulting’ … Bartender James Tanner said the system has made his job easier because he can avoid awkward debates with customers who were lingering at machines but not really playing.”


How To Kick Out Your Customers

The Wall Street Journal: “Letting guests linger as long they please could cost an extra $30,000 a year. Getting folks out is a tricky task for nearly every type of businesses. Jonathan Greenstein, owner of J. Greenstein & Co., a Cedarhurst, N.Y., auction house for antique Judaica, says some people linger past viewing hours at the pre-auction exhibition, but never appear at the auction itself … Still, it’s impossible to identify the big spenders, so he gives everyone the benefit of the doubt.”

“The bigger the venue, the more massive the operation, of course. At the Brooklyn Botanic Garden, an army of guards warn guests 45 minutes before closing, starting in the center of the 52-acre spread to ensure visitors farthest from the exits reach the gates in time. At Macy’s in Manhattan’s Herald Square, about 15 minutes before the posted closing time clerks fan through all 1.2 million square feet of retail space, offering help with final transactions and checking all 850 fitting rooms.”

“Of course, if patrons really want to stay, why not let them? The American Museum of Natural History in Manhattan, which warns guests of closing time in several different languages, gave in to demand a few years ago and started offering adult sleepovers. For $350, patrons can camp overnight under the famous blue whale. Such events have sold out within a day, the museum says.”


Must to Avoid: Loser Experience Design

Matt LeMay: “Yes, in the short-term, people may engage with a product for an abstract reward such as ‘points’ or ‘coins.’ But watch what happens as your users see themselves fall to the bottom of that ‘leaderboard’ or fail to get any real value out of the time they’ve invested in earning those shiny trinkets. Competing for something only to realize that it’s worthless is embarrassing, frustrating, and makes you feel like a huge loser. Gratuitous ‘gamification’ is one of the most odious and lazy patterns of bad loser experience design — and in the long term, it doesn’t work.”

“While bad loser experience design can significantly harm a product, good loser experience design can help foster a broad, engaged, and self-sustaining user base … When platforms focus on shared interests and social bonds over ‘likes’ and ‘favorites,’ they help everybody find a place where they belong. Instagram has done a great job doing this with their discovery features, consistently surfacing people who are adjacent to your people, not people with the most likes or followers.”

“Finally … break out of the design and testing patterns that lead to equating ‘power users’ with ‘good users.’ Over-reliance on internal ‘dogfooding,’ where new products and features are tested primarily with a company’s own employees, is a one-way ticket to bad loser experience design. Dismissing user testing candidates who are not over the moon for your product is another surefire road to bad loser experience design. Think through the needs and behaviors of casual users as extensively as you think through those of power users — and ask yourself, ‘if I only use this product a few times a week, will it make me feel like a loser?'”


Facebook Chatbots Test ‘Conversational Commerce’

The Washington Post: Mastercard “has partnered with Subway and two other major merchants to launch ‘chatbots,’ which are robots that simulate human conversation. The Subway iteration allows you to order a custom sandwich for pickup, something of a digital version of walking down the chain’s sandwich assembly line.” Cheesecake Factory “allows shoppers to purchase and send out gift cards.” FreshDirect lets shoppers “place orders for groceries and meal kits. The bots will be found within Facebook’s popular Messenger app, and will be powered by Masterpass, the credit card giant’s digital wallet.”

“The debut of the bots will provide a fresh test of shoppers’ appetite for what the industry has dubbed ‘conversational commerce,’ the idea of making a purchase or other customer service transaction through A.I.-powered messaging … Consumers are spending more time online, and yet they are concentrating those minutes in a very limited number of apps. Retailers … are realizing that the best way to snare your interest online might not be with a killer app of their own, but by creating bots that live in the apps that you already use.”

“Facebook has said that more than 33,000 bots have been created for its Messenger app so far. This latest batch demonstrates how differently businesses are approaching the technology at this early stage of the game.”


Where Does Coke Taste So Good?

The New York Times: “The latest television commercials for McDonald’s, featuring the actress Mindy Kaling, do not appear on the company’s YouTube channel, Facebook page or Twitter account. In fact, they don’t mention McDonald’s at all — though they do mention Coca-Cola and Google.”

“The ads are part of the chain’s first unbranded marketing campaign, in which it is coyly asking people to search Google for ‘that place where Coke tastes so good.’ The query, meant to capitalize on millions of search engine results that favor the fast-food chain, is central to the ads where association with the brand is limited to placing Ms. Kaling in a bright yellow dress against a red backdrop.”

“The notion that Coke tastes differently at McDonald’s has been a topic of fascination for some time. The New York Times, as part of a 2014 article on the business relationship between McDonald’s and Coke, which dates back to 1955, reported that Coke has a special system for transporting and producing the beverage at the fast-food chain. Part of that includes delivering its syrup in stainless steel tanks versus plastic bags. McDonald’s also says it pre-chills the water and the syrup before it enters its fountain dispensers, and offers a slightly wider straw.”


Whole Foods: Now Just Another Big Box?

The Wall Street Journal: “Whole Foods Market Inc. wants to cut prices without sacrificing the local products that define its healthy image … Some smaller suppliers and industry consultants say the shift to a more centralized distribution structure and other changes risk compromising Whole Foods’ ability to keep stocked with the latest foodie trends and hot local brands.”

“Many of the changes are being spearheaded by Don Clark, a former Target Corp. executive … The data analytics, centralized purchasing and strict shelf management he brought from Target could save money that Whole Foods can use to lower its relatively high prices … Whole Foods has long divided its 462 stores into 11 regions, each with distinct product offerings like local maple syrup and gourmet pickles. A quarter of Whole Foods shoppers that visited the chain in the past month did so for items they couldn’t find elsewhere, according to a survey by Kantar Retail.”

“Whole Foods co-founder and Chief Executive John Mackey said … his new strategy strikes a balance between the remaining autonomy of regional executives and an easier process for national brands to pitch their products just once at Whole Foods’ Austin, Texas, headquarters. That streamlining will lead to lower prices, he said … But smaller brands and people who work with them say they have less incentive to put up with a more impersonal Whole Foods … And some big brands say Whole Foods’ regionalized approach made it tough to negotiate a nationwide strategy for their brands.”


Neiman Markups: Out of Fashion

The Wall Street Journal: “Once upon a time, all Neiman needed to do to lift profits was raise prices. That model has since fallen out of fashion … competition from startups like and are forcing more discounts. Over a recent 24 hours, Farfetch’s prices averaged 2% lower and Matchesfashion’s 15% lower than’s prices on 32 identical items, according to price-tracking firm Market Track LLC.”

“While brands still exert control, particularly over the newest and most popular items, it is harder for them to police prices that change rapidly across websites and fluctuate with shifting exchange rates, industry executives said … The explosion of discount chains, led by T.J. Maxx , that sell designer brands at cut-rate prices also made consumers rethink the need to pay full price. To compete, high-end department stores rushed in with their own off-price chains—Neiman’s Last Call, Saks Off 5th and Nordstrom Rack.”

“Neiman’s Chief Executive Karen Katz … championed a line of specialty stores called Cusp, which Neiman opened a decade ago, that feature lower-priced clothing and accessories. Neiman stores also have added relatively less expensive goods, such as $700 Prada handbags … Ms. Katz reduced snob appeal by allowing Neiman shoppers to use Visa and Mastercard … Neiman has invested heavily in e-commerce … Not all the moves have worked. After building six Cusp stores, Neiman closed two and stopped development of the chain in 2012.”


Did United’s ‘Rules’ Beget Unruliness?

The Wall Street Journal: “Like most other airlines, United Continental Holdings Inc. follows strict rules on every aspect of handling its passengers, from how to care for unaccompanied minors to whether someone gets a whole can of Coke … Deviating from the rules is frowned upon; employees can face termination for a foul-up, according to people familiar with the matter. At United, this has helped create a rules-based culture where its 85,000 employees are reluctant to make choices not in the ‘book,’ according to former airline executives, current employees and people close to United.”

“The incident at United last week, in which Chicago Department of Aviation police dragged a screaming passenger, David Dao, down the aisle and off a United Express regional flight, started as a mere scheduling issue … At least some decisions that led to the crisis were fueled by employees following rules, which are endemic to big, long-lived airlines and amount to giant manuals.”


Farfetch: An Operating System for Retailers

Quartz: Farfetch, the wildly successful e-commerce platform that allows luxury-fashion boutiques around the world to sell online without maintaining their own costly digital operations, is … unveiling a demo of what it has modestly dubbed the Store of the Future.”

“The ‘store’ … isn’t actually a store. Rather, it’s a retail platform with a suite of different technology products the company intends for partner shops to mix and match to create their own unique experience.” These include:
“Clothing racks enabled with RFID that detect what the customer is browsing and can populate a wish list. Digital mirrors that let the customer view their wish list and request the items in the desired sizes or colors. A mobile payment system for easy checkouts.”

“Farfetch, which doesn’t have its own stores, sees its platform as an ‘operating system’ for retailers, and hopes third parties will build their own applications on it the way developers build their own apps for iOS or Android. What Farfetch will maintain control over is the customer data that allows the physical store and any digital product to remain synched up.”