Drinkfinity: A Portable Soda Fountain

Fast Company: Pepsi’s “newest venture is centered on a 20-ounce reusable water bottle that comes with sets of flavor pods … The new product line, called Drinkfinity, is a clear reaction to consumers drinking less soda … The name is meant to indicate that there are infinite combinations of drinks you could make with the bottle and the flavor pods. The Drinkfinity team’s ultimate aspiration is that consumers go online, choose all the ingredients they want, and have personalized pods shipped to their door–a vision that reacts to several consumer trends, including on-demand services and healthy living.”

“For now, the brand … is debuting 12 different types of pods … To make yourself a White Peach Chill or a Mandarin Orange Charge, you fill up your Drinkfinity water bottle, unpeel a pod’s label, remove your bottle’s cap, and push the cap of the lid through a pointed plastic structure. This ruptures the dry storage area in the pod and releases the concentrated liquid, which pours into the container. Then you shake and drink. The bottle itself has a magnetic spot on its side to hold down the cap so it doesn’t hit you in the face as you guzzle.”

“To create Drinkfinity, PepsiCo had to rethink the supply chain, manufacturing, shipping, and even recycling. That resulted in the full life cycle of a single pod producing 40% fewer carbon emissions than the typical 20-ounce drink housed in a plastic bottle you’d buy at the supermarket. The pods also use 65% less plastic than these 20-ounce bottles … The Drinkfinity team likens the product to the new soda fountain: a platform for people to choose what they want to drink, except you can carry it in your bag.”

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Nordstrom Doubles Down on Bricks

The Wall Street Journal: “Many retailers, beset by online competition and shifting consumer tastes, are slashing costs and closing hundreds of stores. Nordstrom Inc. is doing the opposite … It is revamping some of its 122 department stores and spending more than $500 million to gain a toehold in Manhattan. It has snapped up e-commerce companies including flash-sale website HauteLook and subscription service Trunk Club. And it has launched new concepts, including a store in Los Angeles called Nordstrom Local that doesn’t stock any clothes. So far, those efforts have failed to pay off in rising profits.”

“Nordstrom says it is different from its peers. It has fewer locations than rivals, and most are in the nation’s top malls, which continue to draw shoppers … While other department stores are retrenching, Nordstrom has shown a willingness to take risks. It is jumping into the competitive New York City market with a men’s store opening in April followed by a women’s store next year … At a store in Irvine, Calif., Nordstrom recently completed a test of a showroom that carried samples of 19 brands such as Rag & Bone and Veronica Beard in every size and color; they could be tried on but had to be ordered online. For shoppers, it solved the problem of visiting a store only to find their size sold out.”

“Other changes meant to appeal to customers are smaller. In November, the company unlocked the fitting rooms in its department stores … Although theft has increased slightly since Nordstrom made the change, executives say, the retailer is sticking with the new policy. ‘Analysts don’t like it,’ Jamie Nordstrom said. ‘But I’m thinking about the next 50 years, not the next quarter’.”

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Word of the Day: Convenience

Tim Wu: “Convenience is the most underestimated and least understood force in the world today … In the developed nations of the 21st century, convenience — that is, more efficient and easier ways of doing personal tasks — has emerged as perhaps the most powerful force shaping our individual lives and our economies. This is particularly true in America, where, despite all the paeans to freedom and individuality, one sometimes wonders whether convenience is in fact the supreme value.”

“Convenience has the ability to make other options unthinkable. Once you have used a washing machine, laundering clothes by hand seems irrational, even if it might be cheaper. After you have experienced streaming television, waiting to see a show at a prescribed hour seems silly, even a little undignified. To resist convenience — not to own a cellphone, not to use Google — has come to require a special kind of dedication that is often taken for eccentricity, if not fanaticism.”

“For all its influence as a shaper of individual decisions, the greater power of convenience may arise from decisions made in aggregate, where it is doing so much to structure the modern economy. Particularly in tech-related industries, the battle for convenience is the battle for industry dominance … The easier it is to use Amazon, the more powerful Amazon becomes — and thus the easier it becomes to use Amazon. Convenience and monopoly seem to be natural bedfellows.”

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Is Gucci Today’s Most Innovative Brand?

From a Wall Street Journal interview with Imran Amed, founder of Business of Fashion: “Without a doubt, the single most innovative brand of the moment is Gucci … Gucci has completely overhauled their e-commerce strategy and changed the way they communicate about the brand. They’ve embraced new channels like Instagram but also done beautiful events and interesting advertising campaigns.”

“They’re not doing any discounting on their main runway collection … We’ve kind of trained the consumer to wait for things to go on sale. Gucci’s stopped that. Fifty percent of their customers are millennials. Millennials are the drivers of success for the fashion industry now. Without engaging them, you can’t really operate a successful business today. Gucci has found ways of engaging with that consumer.”

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Efficiency Is No Cure for Phony Baloney

The Wall Street Journal: “Over the past 2½ years, thousands of workers lost their jobs, and iconic Kraft buildings, including the original Oscar Mayer headquarters in Madison, Wis., have been shuttered and sold. The cost-cutting project is now wrapping up, giving Kraft Heinz Co. the highest operating profit margin among its peers in the U.S. food industry.”

Troy Shannan, Kraft Heinz’s head of North America supply chain, comments: “We look at pretty much any opportunity we have to drive efficiency. And we use the savings from those efficiencies to reinvest in our brands and our businesses and back into our supply chain.”

“Still, Kraft Heinz is grappling with a problem that can’t be solved by increasing efficiency: U.S. sales of cold cuts and other processed meats slipped to $21.3 billion last year, from $21.9 billion in 2015. Oscar Mayer’s market share dropped to 17.5% from 18% five years ago, according to Euromonitor. Natural and organic brands, as well as small labels buying from local farms, have nibbled away at sales. ‘Consumers are looking for something they think is handmade or looks handmade,’ said Chris Fuller, a consultant to meat processors.”

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Unilever to Weed Out ‘Fake News’ Ad Support

The Wall Street Journal: “Unilever PLC is threatening to pull back its advertising from popular tech platforms, including YouTube and Facebook Inc., if they don’t do more to combat the spread of fake news, hate speech and divisive content.” In prepared remarks, Chief Marketing Officer Keith Weed said: “Unilever will not invest in platforms or environments that do not protect our children or which create division in society, and promote anger or hate … We will prioritize investing only in responsible platforms that are committed to creating a positive impact in society.”

“Unilever has been among the more outspoken advertisers pushing for the online ad industry to clean up the ad fraud that exists on the web and offer up stronger measurement standards to ensure that advertisers are buying ads that can be seen by real people. While the company continues to push for those initiatives, Mr. Weed said that consumers don’t care about online advertising measurement issues. They do care about ‘fake news’ and ‘Russians influencing the U.S. election,’ he added. Rather than issue a public list of demands, Mr. Weed said he wants to work privately with the tech companies to come up with solutions.”

“Mr. Weed said that advertisers need to be outspoken about issues on tech platforms, since they are almost entirely supported by billions of ad dollars. ‘One can start by not putting ads on content we do not want to encourage,’ he said.”

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Bad Apples Spoil Bean’s Return Policy

Business Wire: “It used to be that customers could bring back items bought at L.L. Bean’s stores and online any time they felt it didn’t live up to their expectations. The guarantee covered the item’s full lifetime. Now, the policy extends for one year only. After that, customers can only return an item if it proves defective. In another change to the policy, customers will also now need to provide a proof of purchase for a return or exchange.”

“L.L. Bean relayed the news to customers in the form of an emailed letter from Shawn O. Gorman, the company’s executive chairman and great-grandson of founder L.L. Bean. In the letter, Gorman wrote that it was people who took advantage of the generous return policy that forced the company’s hand.”

He wrote: “Increasingly, a small, but growing number of customers has been interpreting our guarantee well beyond its original intent. Some view it as a lifetime product replacement program, expecting refunds for heavily worn products used over many years. Others seek refunds for products that have been purchased through third parties, such as at yard sales. Based on these experiences, we have updated our policy.”

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Sportsneakers: Performance Shoes Trip Up

Quartz: “As sneakers have grown into the everyday footwear of choice—even in the office—for millions of Americans, performance shoes have been pushed aside by styles that co-opt their looks and comfort but shed their athletic intent … In 2017, sales of performance shoes dropped 10% to $7.4 billion, while sales of sport leisure sneakers grew 17%, reaching $9.6 billion.”

“Some brands have capitalized better than others. While Nike is by far still the king of the US sneaker market, Adidas has made significant gains in the US by delivering the fashionable, athletic-inspired shoes shoppers want. Nike has a deep roster of these styles, but its newer shoes, such as the Epic React Flyknit, still emphasize performance.”

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Purchase Brands vs. Usage Brands

Harvard Business Review: “Where traditional brands focus on positioning their brands in the minds of their customers, digital brands focus on positioning their brands in the lives of their customers. Furthermore, they engage customers more as users than as buyers, shifting their investments from pre-purchase promotion and sales to post-purchase renewal and advocacy.”

“Purchase brands focus on creating demand to buy the product, while usage brands focus on creating demand for the use of the product … Purchase brands emphasize promotion; usage brands emphasize advocacy … Purchase brands worry about what they say to customers; usage brands worry about what customers say to each other … Purchase brands try to shape what people think about the brand along the path to purchase; usage brands influence how people experience the brand at every touchpoint.”

“The simple view would be that traditional brands are purchase brands and digital brands are usage brands. But there are exceptions, including brands like Visa, FedEx, Lego, and Costco, which exhibit many of the characteristics of usage brands … They think of customers less as one-time buyers and more as users or members with an ongoing relationship … Purchase brands focus on the ‘moments of truth’ that happen before the transaction, such as researching, shopping, and buying the product. By contrast, usage brands focus on the moments of truth that happen after the transaction, whether in delivery, service, education, or sharing.”

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