1916: When Department Stores Featured Hospitals

The New York Times: “Lord & Taylor, New York’s oldest luxury department store, founded in 1826, boasted ‘one of the most attractive and completely equipped of the small hospitals in New York City,’ according to an article in The Modern Hospital magazine in 1916. The store operated the hospital when it was located on Broadway and East 20th Street before moving to its new building on Fifth Avenue between 38th and 39th Streets in 1914. On Fifth Avenue, the entire 11th floor was devoted to employee health and welfare, from the hospital to various medical and dental clinics, a roof garden, gymnasium, a schoolroom for boys and girls and an employee restaurant.”

“B. Altman, between Fifth and Madison Avenues and 34th and 35th Streets, operated a 12th-floor emergency hospital that by 1916 was handling as many as 18,000 cases a year, according to Hospital Management magazine. A 1914 brochure celebrating the store’s expansion said, ‘The 12th floor of the new addition has been given over in its entirety to the use of the employees.’ Separate dining rooms served men and women, and a physician and two nurses oversaw a large medical suite and surgery. Also, in a sign of those times, there was a men’s smoking room.”

“Welfare services for department store workers began with John Wanamaker … He wanted to keep his workers healthy and happy, and so in an era of rapacious capitalism, child labor and male privilege he introduced half-day-Saturdays off, medical benefits and a retirement system … His competitors soon followed with medical facilities, employee exercise and lunchrooms, educational training, vacation programs and medical clinics. When Macy’s on West 34th Street expanded in 1924, the new 16th floor included an employee dental clinic with chairs for six dentists.”


How The Cubs Recruit Free Agents

The Wall Street Journal: “Tyler Chatwood thought he knew what to expect when he met with the Chicago Cubs … He assumed he would hear plenty about the Cubs’ recent on-field success, their plan for him in the starting rotation and, of course, the boatload of money they could offer to lure him. Instead, president of baseball operations Theo Epstein and general manager Jed Hoyer took the conversation in a direction that surprised and disarmed him: They recommended the best physicians and hospitals in the area for his pregnant wife … He signed a three-year, $38 million contract with the Cubs shortly thereafter.”

“Granted, the Cubs routinely have one of the largest payrolls in baseball, giving them an undeniable financial advantage over a large portion of the league. They can simply outbid the competition much of the time … ‘If the Yankees offer $130 [million] and the Red Sox offer $130 and the Cubs offer $125, most guys would pick the Cubs’,” one agent said.

“This is the secret weapon that enables the Cubs to practically hand-select talent: a compelling personal touch that goes beyond players’ value on the field. In many cases, that means appealing to the people most important in their lives—their families … This approach has helped transform the Cubs into the most attractive free-agent destination in the sport, an organization that players in its sights rarely turn down … More often than not, players buy it, rushing to join an organization where they believe they’ll be happy.”


The Grand Hotel in Kosovo: World’s Worst?

The New York Times: “The Grand Hotel in the Kosovar capital of Pristina is regularly reviled in internet reviews. Here’s a sample: ‘disgusting,’ ‘a ruin’ and ‘an absolute horror. Probably the worst I have ever been at.’ But the managers seem unfazed by the online abuse. They do not take web bookings and barely offer access to the internet; their hotel has no email account … even Kosovo’s president, Hashim Thaci, usually an eager booster of everything his country has to offer, struggles to find anything nice to say about it … ‘I don’t think it is the worst hotel in the world, but that is because the world is very big,’ the president said.”

“With 13 stories and three adjoining concrete blocks in a prime location, the hotel accommodates flocks of pigeons on the upper floors and has rented out its basement, once used as a prison by Serbian paramilitary thugs, to a health club. But it is otherwise deserted, a maze of dimly lit corridors that are littered with pigeon feathers, strung with cobwebs, lined with doors of dark wood and haunted by even darker memories of Kosovo’s past. Two floors have been reduced to rubble, the remnants of a remodeling program that ran out of money.”

Service is minimal to nonexistent, the marble lobby stinks of cigarette smoke and the green carpeting that covers most of the floors is stained and scarred. And then there are the cockroaches … The president, who has only bad memories of the hotel in the past and despairs at its current condition, harbors big plans for its future. ‘Perhaps we could build a Trump Tower there,’ Mr. Thaci suggested.”


Supermarket Future? Not Plastics!

The New York Times: “A supermarket in the Netherlands wants to make it easier on the planet and easier for its customers to avoid adding to the mountains of plastic waste generated every day … the supermarket, Ekoplaza, an upmarket chain, introduced what it billed as the world’s first plastic-free aisle in a store in Amsterdam. There, shoppers found groceries, snacks and other sundries — but not an ounce of plastic. The items are packaged in compostable materials or in glass, metal or cardboard.”

“Sian Sutherland, co-founder of A Plastic Planet, an advocacy group that has pushed the concept, said the initiative was ‘a landmark moment for the global fight against plastic pollution.’ The plastic-free aisle contains about 700 items, including meats, sauces, cereals, yogurt and chocolate. The opening of the supermarket aisle comes as the idea of banning plastic, or at least making more of it recyclable, gains supporters around the world.”

“In the Netherlands, free plastic bags were banned two years ago, after a European Union directive was passed in 2015 to phase them out. At the time, the country of about 17 million used around three billion bags each year, most of which ended up in the trash. Ekoplaza has promised to expand the plastic-free idea to all of its 74 stores by the end of the year.” Ms. Sutherland comments: “There is absolutely no logic in wrapping something as fleeting as food in something as indestructible as plastic.”


Alexa Challenges Brand Loyalty

The Wall Street Journal: “For decades, the makers of packaged-food, personal and home-care brands have bought shelf space at retailers like Walmart Inc. and Costco Wholesale Corp. that guarantee them nationwide exposure. They have poured billions into branding to make their products instantly recognizable. Selling on websites offers some of those same advantages: Brands can pay for placement on a webpage and display their packaging and logos. Voice shopping, which currently offers customers just one or two product options, could chip away at that tried-and-tested model.”

“In a test conducted in October, Bain & Co. found that for customers making a first-time purchase without specifying a brand, over half of the time Alexa’s first recommendation was a product from the ‘Amazon’s Choice’ algorithm, which implies a well-rated, well-priced item that ships with Prime. Bain also found that in categories in which Amazon has a private brand, 17% of the time Alexa recommends the private-label product first even though such products make up just 2% of volume sold.”

“For now, brands can’t pay Amazon to offer their products to customers in response to a generic request for a product, like detergent or paper towels …Without that paid-search option, P&G has been tinkering with ways to get noticed by shoppers using voice assistants, such as a Tide-branded Alexa app that doles out advice on how to clean over 200 stains but doesn’t suggest Tide products … Unilever, owner of Hellmann’s mayonnaise and Domestos toilet cleaner, has developed Alexa apps that give free recipes and cleaning tips that may or may not incorporate Unilever brands. Unilever sees the apps as a way to market its products by offering customers useful information when they need it most.”


Craft Brew Biz is Stout in Minneapolis

The New York Times: “Across the country, in once-bustling manufacturing centers, breweries are giving new fizz to sleepy commercial districts. If alcohol-based businesses were blamed for a breakdown of society in the Prohibition era and beyond, breweries are now being seen as a force for good. In 2016, there were 5,301 mom-and-pop beer makers, which are typically known as craft breweries. That figure rose from 4,548 in 2015, when the country surpassed its historic high-water mark of 4,131 breweries, set way back in 1873, according to the Brewers Association, a trade group.”

“Although they are small, those breweries pack an economic jolt. In 2016, they contributed about $68 billion to the national economy, the association said … In searching for places to make specialty beverages like sour beers and stouts, breweries seemed to adhere to a formula. They like early-20th-century buildings with up to 10,000 square feet and lofty ceilings, said Sandy A. Barin, a vice president with the commercial real estate firm CBRE based in Minneapolis who counts brewers among his clients.”

“Usually renters instead of owners, breweries in Minneapolis typically sign five-year leases and pay $4.50 a square foot annually … Breweries also seek up-and-coming locations that are within walking distance of houses and apartments … Over all, breweries, usually with tap rooms, occupy about 624,000 square feet in the Minneapolis-St. Paul metro region, up from 507,000 square feet in 2016. And in 2017, 11 new breweries opened in that area, according to CBRE, with 11 more expected this year.”


70% Organic: Close Enough for Goldfish?

The New York Times: “The organic movement started out in the last century as an alternative to industrial agriculture, a vision of family farms, green fields and co-ops, and has now led us to 70 percent organic Goldfish … While regulators give out a ‘U.S.D.A. Organic’ label, Goldfish don’t qualify. Still, you are allowed to say a product features an organic ingredient as long as it “contains at least 70 percent organically produced ingredients (excluding salt and water).”

“The Campbell Soup Company, which owns the Goldfish brand, started selling three kinds of Goldfish with organic ingredients in 2016 … The advent of 70 percent organic Goldfish almost certainly has something to do with the rise of Cheddar Bunnies, made by Annie’s Homegrown, which General Mills acquired in 2014. One blog for moms declared Cheddar Bunnies ‘the Goldfish of this generation’ in 2015, the kind of sentiment that probably didn’t sit well at Campbell.”

“While organic crops are not pesticide free, peer-reviewed studies have found they have fewer pesticide residues than conventional crops. Still, the Environmental Protection Agency has found that the pesticide residues found on almost all crops are within acceptable tolerances. But debate on the topic continues.”


Building Belonging: Community & Customers

Fast Company: “The Rapha Cycle Club (RCC), a membership organization grown around Rapha’s cycle apparel business. The RCC has all the hallmarks of traditional community groups: rituals, local organizers, chapters and clubhouses around the world, symbols, shared identity, and social activities. There’s also a code of conduct that creates the conditions for respect and decency between diverse members … This is not the light ‘community’ that brands often speak of when referring to their customers or social media following–this is real, in-person commitment and engagement. And this is not a sideshow to Rapha’s business. It’s core to its business strategy–its spaces are clubhouses not stores, and people are members not customers.”

“Thinking beyond ‘customers,’ ‘fans,’ or ‘followers,’ the next frontier for great brands is stepping into the cultural need and market opportunity for deeper, real-world person-to-person connection … Those companies that help us forge meaningful connections will win deep loyalty. And this needs to go beyond premium brands. If belonging can be built around apparel and technology companies, surely it can also be built around learning, parenthood, food, and health.”

“Although there are some examples of highly engaged communities being developed via technology (e.g., Peloton riders), when it comes to belonging, real connection will most likely come from in-person interaction in real life. But having physical space is not enough: Brands should create spaces, experiences, products, and services that deliberately foster the conditions for diverse people coming together in respectful environments for shared experiences.”


Airplane Economics: Nickels & Dimes

The Wall Street Journal: “Profit per passenger at the seven largest U.S. airlines averaged $19.65 over the past four years—record-setting profitable years for airlines. In 2017, it stood at $17.75, based on airline earnings reports. In truth, airlines now cover their costs with tickets and get their profits from baggage fees, seat fees, reservation-change fees and just about all the other nickel-and-diming that aggravates customers. You might also call those extra 12 to 15 passengers now crammed onto each flight ‘Andrew Jackson’ for the profit they bring.”

“Given the $20-per-passenger haul ($40 round-trip), it’s easy to see why airlines are so intent on cramming in more seats, even when they know travelers hate the lack of space and complain bitterly about shrunken bathrooms, slim seat padding and skinny rows … Low-fare passengers shoehorned into the back of the plane may not even be covering what it costs to transport them. But they scored a low fare because the airline was concerned it might not fill all the seats on a particular flight, and some fare is better than no fare.”

“Among the big U.S. airlines, Southwest had the largest net profit margin last year, at 16.5%. Southwest continues to defy conventional airline wisdom. It doesn’t charge baggage fees; instead, it believes it attracts more passengers to each flight because many want to avoid the baggage fees charged by competitors.”


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.”