Game Changer: In-App Purchases

The Wall Street Journal: “In-app purchases are ‘dramatically changing the mobile-entertainment landscape,’ said Andrew Phelps, director of digital media at Rochester Institute of Technology. They ‘engage people in a longer financial discourse than you would have in an upfront sale’ … The secret sauce behind many in-app purchases is the countdown clock—a frustration tax that forces gamers to idle before they can perform duties such as farming crops or replenishing fuel, unless they pay for more turns or items to speed up the action.”

“Converting players into spenders without turning them off is key; gamers have derided free-to-play games as ‘free to play, pay to win’ for years. Developers, though, have gotten savvier about giving players more free things to do to keep them hooked until they start spending. In ‘Pokémon Go,’ players can go weeks capturing dozens of ‘pocket monsters’ without needing to spend money. After investing so much time, players might be more inclined to dole out cash to upgrade their gear so they can carry more items and creatures, for example.”

“Algorithms are playing an increasing part in nudging players to spend. Based on dozens of data points—how often gamers play, what model mobile device they use, location and gender—developers might raise a game’s difficulty level, making no two players’ experiences exactly alike … Data on players’ behavior also are used to strategically tweak prices for virtual goods in real time … Other tactics: tapping into players’ “fear of missing out” through limited-time events, and cultivating relationships between players.”


Dollar Shave & The Digitally Native Vertical Brand

The New York Times: “The same forces that drove Dollar Shave’s rise are altering a wide variety of consumer product categories. Together, they add up to something huge — a new slate of companies that are exploring novel ways of making and marketing some of the most lucrative products we buy today. These firms have become so common that they have acquired a jargony label: the digitally native vertical brand.”

“By cutting out the inefficiencies of retail space and the marketing expense of TV, the new companies can offer better products at lower prices. We will get a wider range of products — if companies don’t have to market a single brand to everyone on TV, they can create a variety of items aimed at blocs of consumers who were previously left behind. And because these companies were born online, where reputations live and die on word of mouth, they are likely to offer friendlier, more responsive customer service than their faceless offline counterparts.”

“It’s striking how few of these online companies could have taken off in the presocial age. At the very least, they would have been sunk by the inability to target ads to the demographics they’re aiming to serve.”


The Sweet Science of Designer Deodorant

The Wall Street Journal: “Brooklyn, N.Y.-based Soapwalla charges $14 for a 2-ounce jar of deodorant cream. It has the consistency of buttercream frosting … male customers have said they prefer it over a waxy stick, which snags and pulls hair. Cream also makes it easier to apply to other places on the body, such as the feet.”

“Prices for these offerings are reaching new heights, well beyond the old standard of two or three dollars a stick. Sprays and stronger stick offerings, known as clinical strength, come with $5 to $10 price tags. Natural deodorant often costs $15 or more. Tom Ford has two sticks, from his Oud Wood and Neroli Portofino fragrance lines, priced at $52 a piece … … A spokeswoman for Tom Ford Beauty … says the brand’s $52-per-stick price tag reflects the effort it takes to translate a complex, premium fragrance into a deodorant.”

Meanwhile: “Thirty percent of women reapply their deodorant during the day, according to Procter & Gamble Co., maker of Secret, Old Spice and Gillette; 20% of women say they keep it in their car, 25% in a purse and 30% at work. It all stems from a sneaking suspicion that deodorant could work better or has failed altogether. Executives at personal-care companies acknowledge that could be the case, but say many times a shopper has bought the wrong product or is mistaking a weak fragrance for an ineffective deodorant.

“Now more women buy Old Spice, a line typically targeting men, because of how strong its scent is … It is especially popular with women headed for the gym.”


Dress Local: Starbucks Fashion in the ‘Hood

The Washington Post: “Starbucks employees will continue to wear the green or black aprons that you’re used to seeing when you hit up their stores. But lots of subtle changes are coming to what workers can wear underneath. Previously, they could only wear black, white and khaki clothing; now, the palette is more varied and includes other subdued colors such as blue, gray and brown. And they are now permitted to wear patterned shirts.”

“By giving employees more flexibility in how they dress, Starbucks is trying to distinguish itself from other employers with comparable schedules and wages … But the dress code for any retailer is not just a talent strategy: It’s also about telegraphing a certain feeling to customers. And by allowing more personalized attire, Starbucks seems to be doing something that is in keeping with a broader strategic trend in retail these days. Mega-chains across a variety of shopping categories are trying to make individual stores reflect their local neighborhoods.”

“Starbucks workers in Brooklyn will likely embrace the dress code differently than those in Miami or in a small, Midwestern college town. And perhaps that can give each of the chain’s outposts a more varied, localized feel.”


The Economic Value of ‘Cool’

Quartz: “Cool doesn’t just explain why people will pay $1,000 for the right sweatshirt. It’s also arguably a factor in why the right logo makes us view some people as more suitable for a job, or worthy of receiving money for charity … Cool is a target that’s constantly shifting. It’s an attitude, a term of approval, and today, as much as any of these things, it’s a game of superficially rebellious status-chasing, centered on consumerism.”

“Steven Quartz and Anette Asp, neuroscience researchers at the California Institute of Technology, have run fMRI studies on the brains of people looking at items that a separate group identified as ‘cool’ or ‘uncool.’ Just viewing these objects activated a part of the subjects’ brains called the medial prefrontal cortex (MPFC). It’s involved in social emotions, such as pride and embarrassment, that center on how we perceive ourselves and believe others perceive us, and it has strong ties to the brain’s reward and disgust circuits.”

They write: “Cool turns out to be a strange kind of economic value that our brains see in products that enhance our social image … This abstract good—social approval, reputation, esteem, or status—plays a central role in our motivation and behavior, and it is the currency that drives much of our economy and our consumption.”


Hotels: All Hospitality Is Local

The New York Timess: “Westin … is finding, as many hotel chains are, that a local clientele can help even out the ups and downs of the lodging business. And locals can even help out-of-towners feel more at home.” The focus is “on getting repeat business from a local following. So the innkeepers are sponsoring running clubs or organizing other attractions like author readings, art shows or musical performances … The theory is that a vibrant group of local patrons can make the hotel more attractive to out-of-town lodgers.”

“To breathe new life into its public spaces, Marriott has experimented with various ways to attract an in-town clientele. Its Renaissance Hotels brand a few years ago created an online concierge service, supplemented by recommendations and insights from local ‘navigators’ … And the company recently completed a five-week test in the Baltimore-Washington area in which local Marriott Rewards members could earn points by drinking or dining at 21 of its hotels in the region.”

Hotel analyst David Loeb comments: “The best advertisement for a hotel is the local community. If you can get locals to have a good experience, however they spread that word, it’s a positive.”


Spotify Pinpoints With Some Privacy

Christian Science Monitor: “Spotify announced this week that it is opening up user data collected from its 70 million free subscribers for programmatic, automated advertising.” However: “Spotify has not said that it will share the unique identities of users with advertisers. Instead, the shared data is limited to information like listeners’ age, gender, location, music preferences, and some behavioral habits.”

“This information will enable advertisers to pinpoint specific demographics for their ads on Spotify. Buyers will bid on ad spaces in real time– a trail-blazing step in the digital advertising world, and an example of the many ways digital companies wield the massive amounts of data that they have at their fingertips.”

“Essentially, advertisers can pinpoint users’ characteristics within Spotify, but will not follow them off the platform … So while the streaming site’s new arrangement doesn’t mean that listeners will be hearing an audio ad for a pair of sneakers that they just browsed online, Spotify users will certainly be able learn more about how they are viewed as a market demographic – assuming they don’t mute their ads.”


Speaking Geek: The Rise of Nerds & Brands

The Economist: “Today there are more reasons than ever to treat nerds with respect: never mind the fact that every company is clamouring to hire them, geeks are starting to shape markets for new products and services … From personal computers to social-media companies like Twitter and Facebook, many gadgets and platforms started out with curious tech enthusiasts experimenting in their garage or dorm room, only to turn into mainstream hits.”

“But nerds’ influence now goes well beyond technology. They hold greater cultural sway. ‘Silicon Valley’, a show on HBO which will soon start filming its fourth season, presents the “brogrammer” startup culture in all its grit and glory, and suggests that mass audiences are transfixed by what really happens behind closed (garage) doors … Each month at least 70m people play “League of Legends”, a complex multiplayer online game; that is more than play baseball, softball or tennis worldwide.”

“Incumbent businesses, too, have started to take their cue from all this nerdiness. Brands like Mountain Dew and Doritos have sponsored video-game competitions and ‘rodeos’ where competitors race drones around stadiums … But if they try too hard to speak geek, large companies will come off as inauthentic and alienating, exactly what they were trying not to be. Nerds may be a powerful commercial force, but many of them harbour disdain for big brands and overt marketing. Firms will have to try hard to send a cool, coded message.”


Meet the Spuglies: Walmart Attacks Food Waste

Quartz: “Shoppers tooling down Walmart grocery aisles now encounter brands that package and sell ugly produce. The ‘Spuglies’ brand markets misshapen potatoes and the ‘I’m Perfect’ brand offers apples that have gone askew. These companies pushing misfit fruits and veggies into the mainstream give consumers a way to fight food waste with their wallets.”

“Since it began tackling food waste within its own system in 2013, the retailer says it has diverted 82% of food that would have otherwise gone to landfills. That amounts to about 2 billion meals. According to ReFED, a food waste advocacy group, a 20% reduction in waste would reclaim the 1,250 calories per capita that goes into landfills each year. That’s enough to feed America’s food-insecure population three times over.”


Naughty But Nice: Food & Morality

The Guardian: “Anything that tastes good has got to be bad for your body, soul or both. The marketing department of Magnum knew this when it called its 2002 limited edition range the Seven Deadly Sins. Nothing makes a product more enticing than its being naughty, or even better, wicked.”

“In recent years, however, the moralistic lexicon of food seems to have expanded. One recent fad has been for ‘dirty’ American food, a term that revels in the idea that fatty burgers and messy pulled pork buns are so right because they’re so wrong … Perhaps the clearest proof that the way we talk about food is saturated with moralism is the ubiquity of the term ‘guilt.’ Marketing departments have seen the power of this and promoted ‘guilt-free’ snacks and treats.”