Lord & Taylor’s New ‘Flagship’: Walmart.com

The New York Times: “Lord & Taylor is teaming up with Walmart to create an online store on Walmart.com that will offer about 125 fashion brands, including Tommy Bahama, La La Anthony, H Halston and Effy. Billed by both companies as a ‘premium’ shopping destination, the new online store reflects Lord & Taylor’s desire to reach a wider audience and Walmart’s hope to attract a different type of customer.”

“For Walmart, the partnership is the latest attempt to reach a more urbane shopper. As part of that effort, Walmart has made a string of acquisitions over the past year, purchasing the clothing sites Bonobos and Modcloth and starting its own bedding and mattress line, sold exclusively online.”

“The Lord & Taylor online store on Walmart.com is expected to open in the coming weeks. Lord & Taylor will be responsible for shipping the clothing to customer’s homes. It will continue to sell the same brands in its stores and on its own website at the same prices as it does on Walmart.com … Lord & Taylor executives referred to their site on the Walmart website as a new kind of ‘flagship’ store.”

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Stadium Goods: Getting Kicks From Luxury

The New York Times</strong>: “To walk into the 3,000-square-foot Stadium Goods store in SoHo is to be confronted by rows and rows of pristine, shrink-wrapped athletic footwear. Look closely and you might be a little stunned by the price tags. On a recent afternoon, for instance, a pair of white Nike Jordan 1’s by the fashion designer Virgil Abloh (Off-White, Louis Vuitton) originally priced at $190, was selling for $2,750 … Nearby was a rare pair of Adidas PW Human Race NMD TR, designed by the musician Pharrell Williams. Price tag: $12,350.”

“Sneaker fanatics have been around for decades, with swaps and buys largely happening on eBay or as personal transactions. But it’s only in the last few years that the reseller market has accelerated and gone sharply upscale. John McPheters, who co-founded Stadium Goods with Jed Stiller, says the shift has been driven by ‘men who are now learning from childhood how to treat fashion as a sport — the way that women have always treated fashion’.”

“The partners believe the future of sneaker retail will be a hybrid model combining traditional channels and aftermarket selling. ‘We’re a microcosm of what’s hot,’ Mr. Stiller said, noting that in the sneaker world what’s trending is not necessarily the newest item. ‘Where a lot of retailers are dependent on what brands are releasing at the moment, we’re not. Ninety-five percent of our stock are styles that are no longer on the market’.”

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PF Chang: An American Bistro in China

The Wall Street Journal: “P.F. Chang’s may be seen as an upscale Chinese-food restaurant in the U.S. But the chain is calling its debut location in China ‘an American bistro’—which is exactly how its early customers there see it. ‘The food looks similar, but you eat the food and you know instantly it’s not Chinese,’ said Zhang Ji, 35, who works in finance … Animation designer Zhang Xue said she came because P.F. Chang’s got a shoutout on ‘The Big Bang Theory,’ the U.S. sit-com popular in China.”

“Like many upscale restaurants in China, the restaurant is in a shopping mall. There is a prominent white P.F. Chang’s sign on the 8th-floor entrance … Inside, the décor looks like a mix of old Shanghai meets American diner, with booths and tables … P.F. Chang’s created 10 new dishes for Shanghai customers, including Dusk ’Til Dawn Honey Chicken and Scallion Pancake, an Asian take on chicken and waffles that puts crispy chicken on top of a buttermilk pancake. The Duck Spring Roll features mozzarella, something a Chinese chef might consider sacrilege.”

“P.F. Chang’s is hardly the first foreign company to try selling a cuisine back to its native land. The Domino’s pizza chain arrived in Italy in 2015 and now has 11 locations there; South Korea’s Paris Baguette has two stores in Paris that sell bread back to the French … Yum Brands Inc., however, hasn’t had much success bringing Taco Bell to Mexico, despite two separate attempts.”

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Chik-fil-A ‘Secret Sauce’: Community

Business Insider: “Chick-fil-A’s recent dominance of the fast-food industry can be tied to one behind-the-scenes secret … It’s less expensive to open a Chick-fil-A than it is to open a location of almost any other chain. Chick-fil-A charges franchisees only $10,000 to open a new restaurant. However, unlike other franchises, it prohibits franchisees from opening multiple locations.” Industry expert John Hamburger says this franchise model puts “somebody in the store that was close to the customer. They’re dealing with the customer, they’re in the community. They’re active in the community. And that’s what Chick-fil-A does.”

“Chick-fil-A franchise owners are involved in hiring and firing employees. The company also encourages franchisees to get personally involved in the community through various local organizations. According to Hamburger, that allows Chick-fil-A to get a leg up on the competition in terms of quality and customer service.”

“Hamburger says chains such as Applebee’s are already seeing the negative impact of losing their community connections. The chain, which went to a 100%-franchised model in recent years, closed 99 stores in 2017 amid sinking sales … Chick-fil-A’s success as a rapidly expanding private company could help convince more public companies to follow in its footsteps.”

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Ohm: The Mantra of Deli

The New York Times: “You could spend your life walking past the Ohm Deli Corporation in Williamsburg, Brooklyn, and not pay it any mind. It’s just a deli. Maybe it has the brand of salsa you like. So do three other places in the neighborhood. Or you could step inside and find a man named Rick Patel, who has owned and run Ohm for 25 years, and a group of regulars who come for a social cohesion sometimes lost in the swirl of change in the neighborhood.”

“Ramsay de Give moved to Williamsburg 10 years ago and made the deli a part of his daily circuit: greeting Mr. Patel, getting to know some of the regulars, scoring a carton of eggs when he needed it … At the right time of day, he could count on seeing a crowd gathered around the television, yelling at the Lotto numbers. Of such scenes are neighborhoods built.”

“Four or five years ago he started hanging out in the deli on New Year’s Eve, and encountered ‘an intense sense of community I’ve never seen before,’ he said … New, fancier shops and restaurants popped up or changed hands almost weekly, but Ohm did not change … If anything, Mr. de Give said, it just got firmer in its character. ‘I wanted to capture the tedium of being open from 7 a.m. to midnight, 365 days a year,’ he said.”

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Ordering Anxiety: The High Stress of Fast Food

The Wall Street Journal: “As menu choices multiply—and multiply and multiply—diners are suffering from option paralysis. Especially troublesome are assembly-line-style chains in “fast casual” restaurants where diners have just seconds to answer rapid-fire questions such as whether they want tahini or aioli sauce on their chicken shawarma, or prefer the turmeric almonds or pickled ginger on their beet falafel bowl.”

“People who get nervous at the counter say they worry about being judged for stumbling through their order, or feel pressured by having customers waiting behind them in line. They fret that their food will come out wrong, or that if they try something new they won’t like it. Others simply buckle under the pressure of too many choices. Sarah Anderson hates it when she gets to a restaurant counter thinking she knows what she wants, only to be asked ‘like 20 questions’ … Restaurant executives know this. They feel it themselves, sometimes.” Scott Gladstone, vice president of strategy at Applebee’s, admits: “I usually end up finding one thing on the menu I like and order it every time, because of the anxiety of the ordering process.”

“So, why do restaurant chains offer so many choices? Tom Ryan, the founder and chief executive of Smashburger, says if he didn’t, he would lose customers who yearn for new experiences.”

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H&M Stores Buy Into Big Data

The Wall Street Journal: “H&M, like most retailers, relies on a team of designers to figure out what shoppers want to buy. Now, it’s using algorithms to analyze store receipts, returns and loyalty-card data to better align supply and demand, with the goal of reducing markdowns. As a result, some stores have started carrying more fashion and fewer basics such as T-shirts and leggings … H&M’s strategy of using granular data to tailor merchandise in each store to local tastes, rather than take a cookie-cutter approach that groups stores by location or size, is largely untested in the retail industry, consultants say.”

“The H&M store in Stockholm’s swanky residential Östermalm neighborhood hints at how data can help. The store used to focus on basics for men, women and children, with managers assuming that was what local customers wanted. But by analyzing purchases and returns in a more granular way, H&M found most of the store’s customers were women, and fashion-focused items like floral skirts in pastel colors for spring, along with higher-priced items, sold unexpectedly well.”

“With the help of about 200 data scientists, analysts and engineers—internal staff and external contractors—H&M also is using analytics to look back on purchasing patterns for every item in each of its stores. The data pool includes information collected from five billion visits last year to its stores and websites, along with what it buys or scrapes from external sources … The chain uses algorithms to take into account factors such as currency fluctuations and the cost of raw materials, to ensure goods are priced right when they arrive in stores.” Nils Vinge of H&M comments: “The algorithms work around the clock and adjust continuously to the customers’ ever-changing behavior and expectations.”

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Foot Locker Opens Up & Goes Local

Quartz: “Foot Locker announced in March that it would close more than 100 US stores this year, and stories attributing the news to a ‘retail apocalypse’ quickly followed. The company’s CEO, Dick Johnson, has some thoughts on those headlines: They totally missed the point … More important, according to Johnson, are the new stores Foot Locker is opening. Yes, there will be fewer of them, but they’ll offer better experiences for shoppers.”

“One thing they’re doing is tailoring stores to specific markets by working with local artists and influencers. They’re also considering services you can’t get online, whether that means putting a barber shop in the back, or having a sneaker cleaner come in once a week so folks can get their shoes freshened up.” Johnson comments: “The real headline wasn’t that we’re closing 100 doors. It’s that we’re opening 40 and they’re going to be really special places for our consumer to come and engage with our brand.”

“It’s true that many brands are closing stores because they’re struggling. But having fewer, better stores can also be a sign of a business planning for the future. To that point, Johnson also emphasized Foot Locker’s preparation for an increasingly digital world. One of the company’s biggest investments, he said, is in ways to analyze and use data.”

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The Caviar Sandwich is Back!

The Wall Street Journal: “The caviar sandwich at the Grand Central Oyster Bar is back … the under-$15 sandwich, a novelty item that served as a kind of low-rent riff on the luxury lifestyle, disappeared from the menu several months ago. The reason? The cost of the bowfin caviar, a cheaper variety of fish eggs used for the sandwich, had suddenly soared. That left the restaurant with two options: Increase the price for the sandwich threefold or nix it from the menu altogether. Given that the whole point of the sandwich was the caviar-on-the-cheap aspect, the Oyster Bar chose the latter.”

“And Oyster Bar executive chef Sandy Ingber figured the situation would remain that way because he wasn’t finding any caviar purveyors cutting deals … The menu item, a fixture for more than 15 years, had never been a huge seller, as a typical day saw up to 10 orders. But those who liked it really seemed to like it, Mr. Ingber said. The appeal went beyond the novelty aspect, he added. The dish, with the caviar served on plain white toast and paired with chopped egg with a dollop of sour cream on the side, is a perfect study in contrasting textures and flavors: salty, creamy and crispy.”

“But Mr. Ingber still needed to find a source for low-cost bowfin caviar. Fortunately, one turned up at a trade show in Boston last month. The product is the same quality, he said, and only a tad more expensive when factoring in shipping. Mr. Ingber was able to reinstate the sandwich to the menu two weeks ago, raising the price by only a dollar to $13.95.”

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7-Eleven: When Convenience Is Not Enough

The Wall Street Journal: “For 7-Eleven, Big Gulps and Slurpees are no longer enough. The convenience-store pioneer is falling behind rivals that are gleaning more sales from healthier snacks and freshly cooked meals … The company’s executives said they are working to come up with better foods to sell in their 9,700 North American stores. ‘Simply being open longer than the competitor … is not enough,’ said Raj Kapoor, referring to the stores’ extended hours. Mr. Kapoor, a 23-year veteran of 7-Eleven, is head of fresh food and proprietary beverages.”

“The effort to freshen up 7-Eleven’s business has run into resistance from the chain’s franchisees. Eight out of 10 7-Eleven stores are owned by franchisees, most of whom own fewer than five stores. Many say it is too expensive to maintain new equipment like ovens, and that 7-Eleven needs to pay to remodel their stores if they want them to sell more fresh and hot food. ‘Our stores don’t look like we are in the food business,’ said Hashim Sayed, who sold his store in Chicago back to 7-Eleven this week after 25 years as a franchisee.”

“7-Eleven says it has been addressing the shift in tastes for several years. But competitors have done more to sell fresh—and more profitable—foods, analysts said. Regional convenience chains Wawa Inc. and Sheetz Inc. make custom salads and hot meals at on-site kitchens. Iowa-based Casey’s General Stores Inc. is now one of the largest sellers of pizza in the U.S. CVS Health Corp. has reorganized its drugstores to display healthy food more prominently.”

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