New Realities of the Grocery Experience

The Wall Street Journal: “The challenges for grocers today include a new reality: The days of shoppers filling carts during a big weekly trip to their neighborhood supermarket appear over for now. Consumers are more targeted in their shopping habits. They are less loyal to retailers and more willing to buy groceries online. And they are buying more from stores at two poles: ones with cheap prices, and ones that offer high-quality fresh food, often at a premium.”

Natalie Kotlyar, a consultant, says shoppers expect “convenience, selection and the right price and they want it now. Everyone is trying to meld those concepts to create the perfect shopping experience.”

“Chains that don’t adapt quickly to the changes in consumer behavior and business dynamics won’t survive, say analysts, who, along with some supermarket executives, expect more consolidation in the coming years and predict more grocery stores will close. To compete with Amazon, Wal-Mart is offering curbside pickup and home delivery in test markets. Kroger is expanding its platform for customers to order groceries online and pick them up at the stores. It also said it has invested $3.8 billion in lowering its prices over the past decade.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Nike Goes Local & Gets Physical

The New York Times: “Nike shaped itself into one of the globe’s most recognizable brands. Now it has a new idea: Go local. Facing pressure from investors and competitors like Adidas, Nike said Thursday that it was shaking up its organization to focus more on consumers in just a dozen cities around the world and on releasing new products faster in those places.”

“To keep its products relevant and make its service more personal, Nike aims to develop what it called a ‘local business, on a global scale’ and ‘deeply’ serve customers in 12 cities, including New York, Paris, Beijing and Milan. Those places are expected to deliver 80 percent of the company’s growth over the next two and a half years.”

“Despite the move to online shopping that is transforming retailing, Nike is not giving up on its physical stores. Instead, the company will use the stores to try to foster relationships with customers and further link the shops to its digital efforts. Nike, which is known for sponsoring star athletes like LeBron James and Rafael Nadal, will also try to speed up how quickly it designs and works with its suppliers to deliver new gear. The company wants to cut its product-creation cycle time in half.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Schrager’s Public: Affordable Hotel Luxury

Quartz: “Forty years after redefining nightlife with the legendary New York City nightclub Studio 54, the hotelier and real estate developer Ian Schrager’s newest vision is for a new kind of affordable luxury—a hotel and arts center in downtown Manhattan that offers a blueprint for disrupting the mid-market hotel sector.” Schrager says “people don’t care about the gold buttons or if coffee is served in bone china. We offer luxury without it being obsequious.”

“With rooms starting at $200 a night, PUBLIC New York is geared to the tech-savvy Airbnb set—who are taking a growing bite out of hotel bookings. At that price, the new brand is playing the same field as some of the highest valued hotel brands, and particularly their fewer-frills ‘select service’ hotels, which have thus far weathered the exodus to Airbnb relatively well.”

“At the heart of all of Schrager’s brand propositions—from Studio 54 to the PUBLIC—is community, a growing trend in hotel design. PUBLIC is designed for a generation of savvy entrepreneurs; the hotel blurs lines between social, professional and cultural spaces with serene, light-filled, public venues with amenities to support optimal productivity and social interaction … Fast wifi and sleek design may lack the debauchery of his Studio 54 heyday, but Schrager’s new model for hospitality seeks to still offer today’s guests the opportunity to be a part of a scene.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Brand Stradivarius Fails To Resonate

Van: “Recent research led by Dr. Claudia Fritz of the Université Pierre et Marie Curie in Paris has questioned whether we can perceive the differences between old and new violins. In September 2010, Fritz and her team of researchers asked 21 experienced violinists to choose which violin they preferred from a pool of six. These consisted of three new and three old violins, two of which were Stradivarius … Each of the participants wore goggles that disguised whether the instrument they were playing was old or new.”

“Contrary to expectations, it was one particular Stradivarius that was the least preferred. Perhaps even more surprisingly, the single most preferred instrument was a new violin … In her most recent paper, published last month, Fritz asked an audience of 55 volunteers to listen to and compare three new violins with three Stradivari violins in a concert hall in Paris. The audience consisted of those with relevant expertise, such as violin makers, players, musicians, audiophiles, music critics, composers and acousticians. Without knowing whether they were listening to old or new violins, the audience decided that new violins not only projected better, but that they also generally preferred their sound over old violins. Fritz repeated the experiment in New York and gained similar results.”

“Fritz’s study may have proven that new violins sound just as good old ones when we are unaware of their age, but in reality no violinist plays in such blind conditions, and most concert programs will inform audiences if the soloist is playing on a priceless antique. We do not play or listen to music in isolation: anything from the concert venue, the time of day, to knowing that the soloist is playing on a centuries-old instruments affects our response. The staunch defenders of Stradivarius’s superiority illustrate that we still find something special in the long histories of old violins. Our romantic obsession with old objects and the stories that surround them continues, meaning there is little more that science can do to dispel the Stradivarius myth.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Report: Best Buy To Trial ‘Test Drive’

Retail Dive: “Best Buy is trying harness something that’s already common practice among consumers — the concept of buying something to figure out if you really want it, knowing full well there is a decent chance you will eventually return it. It’s perhaps a cumbersome way to find out if a purchase is really worth making, but it has become a culturally acceptable method.”

“With a try-before-you-buy program, Best Buy is looking to divert that sort of activity, and convince a customer who normally would buy and return later to pay an additional fee to rent an item for several days to decide if they really want it. The retailer recognizes that such a fee might not be attractive on all products, and for now seems to be reserving it for a handful of bigger-ticket tech products.”

“The program could also help Best Buy capture a prospective customer’s attention earlier in the buying process while they are still researching a purchase. Amazon has done very well in making itself essentially a shopping search engine to be used by consumers in the earliest phases of their product hunts, and Best Buy may feel it can get in on that action by enticing customers to try products without a full commitment.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Footwear Revolution: Sneaking Up on Fast Fashion

Quartz: “A sneaker starts with a sketch. Before a brand can turn that idea into a prototype, it has to produce the patterns that serve as the instructions for the factory putting it together, and create the metal mold used for the sole. This process alone takes weeks. It then makes a sample, which usually requires more fine tuning. Several samples may be necessary, with the process repeated each time a new one is made. It can take a year before a final design is ready for production.”

“Now virtual prototyping is letting brands shorten that timeline dramatically … 3D printing is also hugely beneficial for rapid prototyping, since it lets brands skip the tooling step needed to build molds for foam soles. That alone can take a month. But brands can now print prototypes of a sole in a matter of hours.”

“Why should shoppers care? Together these changes in design and manufacturing mean they won’t need to wait to get the products they want, and it should soon be feasible to get items custom-made, since it will be easier and cheaper for brands to produce just one of an item … For the brands themselves, cutting back lead times will let them respond to the market better, meaning they won’t need to make vast quantities of shoes in advance.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Ikea Frakta Bag: Dark-Horse Design Icon

Fast Company: “Ikea’s bright-blue Frakta bag has become something of a dark-horse design icon. Who would’ve guessed a 99-cent crinkly plastic tote would be as beloved and as indispensable, to some, as an iPhone? … Ikea casts the bag in a democratic light, showing how it’s a does-it-all-design–grocery bag, makeshift umbrella, beach tote–in virtually every scenario: vacation, biking, at home, at work, even when kicking out your ex and all his junk. In Ikea’s eyes, the bag is common ground for everyone.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Panera 2.0: Making Fast Food Faster

The Wall Street Journal: “Seven years ago, customers at Panera had to wait in line for up to eight minutes to place an order … Today, online orders make up more than a quarter of sales at its company-owned restaurants, and the average time customers spend waiting in line to order food has shrunk to one minute. Panera is widely cited by analysts as one of the most technologically savvy, best-performing chains in the industry.”

In 2012, “the chain opened a Panera prototype in Braintree, Mass., to test all elements of “Panera 2.0”: self-order kiosks, delivery, digital ordering and a new practice of bringing food to customers’ tables … Easing the ordering bottleneck by taking orders online, instead of at the counter, wasn’t enough: The kitchen had to be able to handle the volume. Allowing customers to place orders themselves led to more customization, but also more staff mistakes. The company revamped the way employees process orders in an effort to minimize errors by simplifying the kitchen display systems.”

“Digital orders now make up 26% of sales in Panera’s more than 900 company-owned cafes and delivery is available in 24% of its total locations—a percentage it expects to grow to as much as 40% by year-end. The chain in April said it plans to add 10,000 delivery drivers this year, on top of the roughly 4,000 it has now … Panera turned the corner last year as digital orders and delivery gained traction. In the first quarter of 2016, the chain posted its best traffic and same-store sales growth in four years, outperforming the industry by 6.5 percentage points—the widest margin it had ever recorded.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

$13 Burgers Slows Demand for Fast Food

The Wall Street Journal “As the number of outlets serving ‘better’ burgers—featuring nontraditional toppings and artisan buns—has skyrocketed over the past decade, so has the average burger tab, turning some customers off … Lunch traffic to quick-serve hamburger restaurants fell 5% last year—the biggest year-over-year decline that market-research firm NPD Group Inc. has recorded … The average lunch burger check—including fries and a beverage—has risen 22% since the financial crisis to $5.83, with a 4% increase last year alone, according to NPD.”

“With so much competition and only so many ways to differentiate a burger, upstarts have been coming out with evermore gourmet ingredients, such as Wagyu beef, roasted garlic aioli and truffled arugula, which have raised the bar for burgers overall—and their price tag …they can beef up profits by charging extra for additional toppings … A basic hamburger at (Fatburger) starts at $5.94, but after adding bacon and chili, it is $8.14. With fries and a drink, the combo totals $13.37.”

McDonald’s recently adopted a back-to-basics approach after years of chasing health-minded customers with products such as salads, sandwich wraps and fruit smoothies. It had neglected its burgers and recently found that only one in five millennials had ever tried its signature Big Mac … The burger giant has been trying to improve the quality of its burgers by adjusting temperatures and cook times to deliver hotter, fresher burgers. Next year, it plans to make its Quarter Pounders with fresh, instead of frozen, beef. It is also in the process of rolling out higher-end, customizable burgers from a ‘Signature Crafted’ menu to compete with the ‘better’ burger places, but at a much lower price.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Not from Ikea: Flat-Pack Pasta

Fast Company: “Researchers at the MIT Media Lab’s Tangible Media Group have managed to make pasta, the world’s greatest food, even better: by giving it shape-shifting properties. Lining Yao, the lead researcher, and former Media Lab grad student, and Wen Wang, a researcher at the Media Lab, created flat sheets made of gelatin and starch that transform into 3D shapes when they’re submerged in water … When submerged in hot liquid, spaghetti can divide into smaller noodles and discs can wrap around pieces of caviar to create something like cannoli.”

“Why would you want to do this? Because such technology could be used to package pasta more efficiently. The researchers found that the volume of packaging for macaroni is 67% air. If pasta were packed flat and then erupted into shapes when you dumped it in a pot, you could save money.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail