Swedish Samosas: Ikea in India

The New York Times: “Ikea’s opening in India — and its subsequent success or failure — is likely to become a case study for other international retailers. India’s retail landscape is complex. With a growing middle class, its 1.3 billion people buy about $30 billion a year of furniture, lighting and household items like bed linens and cookware … But despite the efforts of a few local chains, 95 percent of those goods are sold through small shops that offer custom-built products, usually specializing in one category such as wooden furniture or lamps, and offer free assembly and delivery.”

“Ikea stores are the polar opposite. Part showroom and part warehouse, they are sprawling outlets that are far from city centers with mazes of giant bins and floor-to-ceiling shelves. Ikea’s brand signals affordable, mass-produced and functional, and its design aesthetic is lightweight and lean, in contrast to the heavier, bulkier furniture traditionally favored in Indian households … All of this has forced Ikea to rethink its product lineup and store operations for India. Although the Hyderabad store has the classic Ikea layout, what’s on display is somewhat different.”

“Given India’s lower income levels, the store features hundreds of products — from dolls to spice jars — priced at less than 100 rupees, or $1.45 … Indian families spend a lot of time together, with relatives frequently popping in, so the company added more folding chairs and stools that could serve as flexible seating … Some items popular in the United States, such as untreated pine furniture, do not endure in south India’s hot and humid climate … Even the cafeteria caters to Indian tastes, with biryani, samosas and vegetarian Swedish meatballs on the menu and 1,000 available seats, more than any other Ikea in the world, to accommodate the more leisurely dining style of Indian families.”

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The Price is Right — Or is It?

The Wall Street Journal: “A simple mathematical error leads shoppers to make mistakes when evaluating offers that promise to save them money. Sometimes they inadvertently pick the priciest option. Sometimes they overestimate the benefit of a bargain. And sometimes they don’t recognize that competing promotions offer identical savings. The problem involves percentages.”

“Instead of comparing unit prices, shoppers tend to judge offers based on the size of the benefit. Getting 50% more of a product must be better than knocking 33% off its cost, right? Wrong. The savings are identical, but on the fly, even savvy shoppers make mistakes … Consider a pound of coffee beans that normally costs $15. If a shopper receives 50% more free, the price is $5 for each half-pound. A discount of 33% reduces the original cost to $10, which is also $5 per half-pound.”

“One of the most common ploys used to sway consumers is the double discount. A 40% discount on a $1,000 suit drops the price to $600. Marking the suit down twice, first by 20% and then by an additional 25% decreases the cost to $800 before shrinking it to $600. The deals are identical, but the double discount feels more generous … To test responses to offers of discounts or bonuses along with shoppers’ ability (or willingness) to calculate percentage change, .. several experiments revealed that consumers generally favor product bonuses over price discounts, reduced quantities over increased prices and double discounts over single discounts.”

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Yes, The Cow Had a Name: Dinner

The Wall Street Journal: “The menu at chef José Andrés’s Bazaar Meat in Las Vegas notes that its Vaca Vieja steak is made from a “hand-selected working cow.” The beef comes from a meat company called Mindful Meats, where, on the cow’s ‘final day,’ employees ‘look each cow in the eye and say thank you as they load onto the trailer,’ its website explains. Welcome to the final frontier in the discussion about transparency in food: meat … The challenge for restaurants and food providers is to give information without turning stomachs.”

“It’s a fine line between transparency and oversharing. At Blackbelly Restaurant in Boulder, Colo., servers are coached to let customers take the lead in discussing the provenance of the meat, says chef and owner Hosea Rosenberg. On a typical evening, about one-third of customers will want to order without much discussion, says Mr. Rosenberg. Another third is interested in more specifics—like cuts of meat, or particular breeds of animals—before their eyes glaze over, he says. The last third is interested in even more details, such as types of grasses or grains the cow was fed, what it weighed, and what farm it was from. Sometimes they ask if it had a name. (‘We named it Dinner,’ he says).”

“Randy Golding, a retired chemical engineer in Cedar City, Utah, orders steaks, chicken and ground beef every three months from Firefly Farms in North Stonington, Conn. He says he has spoken directly with the farm manager, Dugan Tillman-Brown, for at least an hour, asking questions such as how the animals were treated (‘They have names. They have personalities,’ says Mr. Tillman-Brown) to how they are slaughtered (a quick shot to the head with a steel bolt) … Mr. Golding says those details help him and his wife, Lisa, feel better about eating meat knowing the animal wasn’t mistreated. “

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Canada Dry: A Promise Uprooted

The Washington Post: “Julie Fletcher filed a federal lawsuit against the owners of Canada Dry ginger ale alleging the beverage does not contain ginger, the Buffalo News reports. Canada Dry’s listed ingredients are carbonated water, high fructose corn syrup, citric acid, sodium benzoate, natural flavors and caramel colors … It’s not the first lawsuit to hold the ginger ale company to task for its ingredient list.”

“Law 360 reported that a similar suit in Missouri against Dr Pepper Snapple Group Inc., which produces Canada Dry, was dismissed in June. In that suit, lab tests revealed that the beverage did not contain ginger. But the company argued that ginger is used to make the ‘natural flavoring’ in the drink and contested the methodology of the lab test.”

“As for Fletcher, the Buffalo News says that one factor in her confusion about the product was a 2011 commercial where a hunky ‘ginger farmer’ pulled a root out of the ground — and was pulled up through a woman’s cooler of Canada Dry. Which, to clear up any confusion for future litigation, is physically impossible.”

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Meal Kits: The Complexity of Simplicity

The Wall Street Journal: “Meal kits may make cooking easier, but getting a box of pre-portioned ingredients and instructions to a customer’s door is one of the most complicated logistics riddles in the food business. Companies have poured millions of dollars into solving such questions as how to stack fish and fennel in boxes. They’re also investing in systems to reroute shipments during snowstorms and algorithms to predict what customers want to eat during the summer months.”

“Meal-kit spending by consumers has grown three times as fast as spending in established food sectors such as restaurants and grocery stores since 2015, according to Nielsen … But companies that sprang up in garages or test kitchens are getting a close look at just how expensive and complicated it can be to deliver millions of boxes a month to customers’ homes or to supermarkets. Startups have had to devise workarounds for everything from heavy weather to diverting trucks around highway accidents, and company founders have lots of war stories, especially from the early days of their operations.”

“To help keep a lid on costs, Sun Basket, whose meal kits target health-conscious consumers, has gone so far as to set up a Midwestern distribution center in a converted limestone cave—a cheaper way to keep its products cold than spending millions to convert a conventional warehouse in the region for refrigeration. The temperature inside the underground facility remains stable regardless of whether it’s hot or cold outside, so the company spends less on electricity.”

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Comfort Check: Airlines Fly By The Seat of Their Pants

The Wall Street Journal: “The seat bottom is one of the most crucial elements in seat comfort, and one of the most carefully studied. Longer is better: You get more support under your thighs. But some airlines scrimp. Some reduce seat length to save weight … Another airline choice that affects your comfort: how high the seat is off the floor. About 18 inches is standard, but some European airlines with generally tall clientele want seats constructed higher, so long legs rest more naturally. Some Asian airlines order seats at 17 inches cushion height.”

“Seat makers say many factors influence seat comfort far beyond their control. The length of the flight affects how comfortable passengers think a seat is. So do cabin temperature and lighting. The temperament of passengers when they get on the plane also affects comfort assessments—if you’re frazzled from the hassles and frustrated by TSA, you’re more likely to think the seat is uncomfortable. Friendliness of flight attendants can help or hurt seat-comfort surveys, too.”

“The cleanliness of the airplane is a big factor in seating comfort scores. In addition, studies show more attractive color combinations score higher … Airlines get all kinds of options on aircraft seats. Foot and calf rests are options rarely used by U.S. airlines but more common overseas. A one-piece food tray is more robust than a bi-fold. Coach seats can have reading lights, USB ports, 13.3-inch monitors, dual water bottle holders and under-seat boxes for entertainment gear so there’s no box on the floor blocking under-seat storage and foot space. Many airlines, of course, choose not to provide those conveniences.”

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How FreshDirect Lives Up To Its Name

The Wall Street Journal: “FreshDirect launched its online-only service in 2002 in New York. Its green and orange trucks now provide next-day delivery to customers across the New York-New Jersey, Philadelphia and Washington, D.C., metropolitan areas, with plans to expand into Boston next … Amazon, Target Corp. and other large companies have invested hundreds of millions of dollars to expand food delivery and build out their grocery e-commerce operations. Supermarket chain owner Koninklijke Ahold Delhaize NV’s Peapod unit, the longest-running online grocery service in the U.S., has expanded to 24 markets and is investing in technology to cut its handling and delivery costs.”

“The grocers are trying to solve one of the toughest problems in home delivery: Getting food to doorsteps in the same condition consumers would expect if they went to the store themselves … FreshDirect’s logistic hurdles start well before delivery. It must get products from its suppliers to the building, process the food, then pick, pack and ship orders before the quality degrades. That is why its new facility has 15 different temperature zones … Software determines the most efficient route for each order, and tells workers which items to pick … The site has shaved the time it takes to fulfill an order by 75%, according to FreshDirect, and doubled the number of items picked per hour, compared with the pace at its old facility in Long Island City, Queens.”

“The stakes in getting the technology right are high. FreshDirect is competing with grocery chains that often fill online orders through their stores, using a mix of staff and third-party services like Instacart Inc .. Online-only operations with centralized warehouses tend to be more efficient than logistics run out of stores, because they use fewer workers and can position goods for faster fulfillment, said Judah Frommer, a food retail analyst with Credit Suisse … FreshDirect says its relatively small scale also can be an advantage since it doesn’t have to be all things for all shoppers.” FreshDirect Chief Executive Jason Ackerman comments: “We focus on being the best local food, fresh food retailer. And a lot of the tech is to support that.”

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UK Grocer Intros ‘Quiet Hour’

Quartz: “One of Britain’s largest supermarket chains has introduced a weekly quiet hour for customers who struggle with the noise associated with grocery shopping, like those on the autism spectrum.”

“Every Saturday morning from 9 to 10, each of Morrisons’ nearly 500 stores will dim the lights and shut off music. They’ll also try and deaden the cacophony of sounds that pervade supermarkets across the world—checkout beeps and the clangs of carts and baskets will be minimized as much as possible, and public-address announcements will be eliminated.”

“Around 700,000 people are on the autism spectrum in the UK. Grocery behemoth Tesco has conducted a six-week quiet hour trial, and many businesses across the UK had a one-off awareness-raising quiet hour in October. Morrisons is the first chain to roll out a weekly initiative in all of its stores.”

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America’s Most Exciting Bank

The Wall Street Journal: “To Michael Daly, who runs Berkshire Hills Bancorp Inc., BHLB -1.22% banking is too often blasé. So Mr. Daly has adapted an unconventional rulebook meant to energize and empower his 1,900 employees. Suits are not allowed. Rock music must be played at every meeting. And ziplines are an acceptable form of transportation: Mr. Daly once arrived at an employee town hall on one, slinging $100 bills to the crowd below … In an industry built on numbers, Mr. Daly believes in emotions and that employees who feel good will do good work. He started calling his company ‘America’s Most Exciting Bank’ years ago, because workers told him they wanted jobs they enjoyed.”

“Since he became chief executive in 2002, the bank has grown to $11.5 billion in assets as of the first quarter, from about $1 billion. During acquisitions and their accompanying job cuts, Mr. Daly hands out his cellphone number freely and encourages employees whose jobs are on the line to ‘come get in my face.’ The ones that do call often prove worth keeping. ‘You would be shocked at how many high performers we find through that,’ he says.”

“Mr. Daly often hires from outside the banking industry, valuing scrappiness over pedigree. He likes to tell the story of two customers that he struck up a conversation with at a branch in Albany, N.Y. He liked their energy, and hired them away from the clothing store where they worked to do customer service for the bank … For all his swagger, Mr. Daly also likes to play the part of a small-town banker. He said he sends a couple hundred handwritten notes to employees every month, and replies to just as many employee emails.”

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Fast Casual Picks Up The Pace

The Wall Street Journal: “TGI Fridays, a 53-year-old brand that came under new management last summer, is working to improve the dining experience for people who eat at the restaurants … The privately held company has redesigned about half of its 440 U.S. restaurants, some of which now have open kitchens. It switched to a blend of chuck and brisket for its burgers, from ground sirloin and chuck; launched a meatless burger; and moved to meatier ribs. The chain has seen a 15% sales increase from menu items that have been improved since October 2017.”

“Red Lobster had declining sales when it was owned by Darden, but it has been gaining back customers, opening new restaurants and growing its takeout business since being acquired by Golden Gate Capital in 2014 … The company added smaller tasting plates with more urbane dishes like tuna poke. It began offering online ordering in January and is experimenting with new store designs that include a dedicated takeout area. The 749-unit chain also is delivering food.”

“Private-equity firm NRD Capital Management bought the struggling Ruby Tuesday chain last year, after it closed 100 restaurants … developing healthier dishes and returning to its Southern roots with new menu items such as the Smoky Mountain chicken sandwich and Hickory Bourbon salmon.” Aziz Hashim of NRD comments: “Casual dining is not going anywhere, it just has to be reinvented.”

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