Snapchat: The Cause is Not Celebre

The New York Times: “Snapchat wants to provide a more authentic experience, one that does not depend on whether a celebrity is on its service, and one that is not cluttered by adlike endorsements from influencers. The more someone’s real life shows up on its service, Snapchat figures, the more intimate and personal it feels. And marketers may be more attracted to this authenticity, spurring them to buy ads from Snapchat rather than pay celebrities and influencers to do product placements.”

“Snapchat says it prefers that celebrities use the app like everyday users, rather than as a platform to sell products. The company’s terms of service prohibit getting paid to post, making influencer marketing a no-no. The company, based in Venice, Calif., said it does not want to harm Snapchat’s image as a place where people go to interact with their friends … remaining relatively marketing-free will help the company differentiate itself.”

“The ads are typically designed to mirror the look and the feel of videos and photos that users already see on the messaging service. By keeping that quality control, Snapchat is able to charge a lot for its ads: $350,000 to $600,000 for a daylong national geofilter — a branded image that people can overlay on their photos — and up to $700,000 for so-called lenses that can transform a user’s selfie.”


Quote of the Day: Emmanuel Faber

“Ultimately, we have to keep in mind that what will make the resilience of this business, the resilience of our brands, is this notion of social justice. We have to be fair in the way we deal.” ~ Emmanuel Faber, CEO, Danone, in a Wall Street Journal interview.


Primark & The Art of Bargain Shopping

The Wall Street Journal: “Shopping at Primark stores, stylish Brits know, requires strategy and skill. As many retailers struggle, the destination for trendy $5 sweaters and colorful $3 T-shirts is planning to expand in the U.S. beyond the handful of stores it currently has in the Northeast. The store doesn’t sell online, but operates in nine countries outside its home in the U.K. and Ireland. Its six U.S. stores include one at the original site of Filene’s Basement in Boston.”

“To visit Primark is to navigate throngs of people. They hunt through crammed racks for jeans that look almost like a pair spotted on the runway but at a fraction of the price, with the fear that they may disappear into another shopper’s arms in minutes … Primark stores are large, and product moves quickly. The largest store, in Manchester (UK), occupies 155,000-square feet over three floors.”

“On a recent tour around London’s flagship Primark store on Oxford Street, David Latham, commercial director of Primark, said products are generally organized into three categories. First, there are ‘basics,’ such as plain T-shirts and undergarments that might go for around £2. Then, there are ‘essential’ items like denim roughly in the £8 range. Finally, there are fashion items, which likely have higher price points and more in-demand looks. He recommended mixing and matching across these three categories. Savvy locals, said Mr. Lathan, come into the store ‘three to four times a week’.”


Apeel: Edible Barriers For Better Bananas

The New York Times: “Using leaves, stems, banana peels and other fresh plant materials left behind after fruits and vegetables are picked or processed, Apeel has developed a method for creating imperceptible, edible barriers that the company says can extend the life of produce like green beans and berries by as much as five times. Apeel can even deliver a day-of-the-week bunch of bananas, each ripening on a different day.”

“The version of Apeel for avocados, for example, creates a barrier that effectively fools anthracnose, a fungus that exploits tiny cracks that develop in the fruit’s skin when it begins to shrivel. Anthracnose extends a little leg through those cracks and into the fruit itself, creating the ugly brown spots that are such a nasty surprise when an avocado is opened.”

“If the product performs as advertised, it could bring sweeping changes to the produce industry and grocery aisles. It could reduce food waste and the use of pesticides and increase the varieties of fruits and vegetables available. But the company’s product is still largely untested at a commercial level, and it faces several potential hurdles beyond effectiveness. Consumers may be wary of a new coating on fresh food, for example, and growers may decide it adds too much cost.”


Tipsy: The Balance of Gratuity & Value

The New York Times: “The owners of Huertas, a cheerful Spanish small-plates restaurant in the East Village, knew they would have to raise prices when they abolished tipping last December. But when the octopus plate rose to $21 from $16, they looked at the plate and realized another adjustment was needed. ‘We decided to add a tentacle,’ an owner, Nate Adler, said. The extra limb costs about a dollar, but the more substantial dish eased the sting of the $5 price increase.”

“To manage costs without inflicting sticker shock on customers, restaurants have to hunt down every possible savings. At Huertas, where the octopus grew another leg, the kitchen staff has shrunk from six cooks to four or five per shift. At Roman’s in Fort Greene, Brooklyn, the bar is no longer always stocked with organic lemons … The Union Square group, with its deep pockets, has begun buying more items in bulk, like paper towels, laundry services and software.”

Restauranteur Dino Lavorini: “There are certain fixed items — a glass of wine, a bar snack, a cup of coffee — that affect how guests experience the welcome of the restaurant.” At his restaurant, The Modern, “prices of those items stayed where they were, even as others, including those for many bottles of wine, rose by as much as 20 percent.” Nate Adler observes: “Ultimately it’s not about the numbers on the check, but about whether the balance and the value feels right to people as they leave the restaurant. It’s not an entirely rational system.”


Digital Dolls: Toying With Children & Privacy

The Wall Street Journal: “A complaint filed with the Federal Trade Commission alleges that two talking dolls—My Friend Cayla and I-Que Intelligent Robot, both made by Genesis Toys Inc.—collect and use personal information from children in violation of rules prohibiting unfair and deceptive practices.”

“According to the complaint, Genesis Toys doesn’t get the consent of children’s parents before collecting children’s voice recordings and other personal data while they are using the toys. Genesis then sends the voice recordings to a separate company … that may use the data for other products …My Friend Cayla, a $60 interactive doll that users can talk to, uses speech recognition, a microphone and speakers to understand what a user is saying. The internet-connected toy submits the user’s queries through a Bluetooth connection to a smartphone app to come up with responses.”

“For both toys, the terms of service are difficult to find, and the documents give few details about what information is collected from the children, how it is used, or where it ends up.”


Skinny Seats: Max Headroom is Dead

Scott McCartney: The average flight now has 142 seats onboard, compared with 137 two years ago … Installing skinny bathrooms and minimizing galleys have let airlines pack more rows in, too. Psychologists say the eye-level squeeze is a big reason travelers are feeling more anxious on densely packed planes … Airlines say packing more people into each plane has made them more money and allowed them to give customers more cheap seats. Space for legs, and heads, is adequate for comfort, airlines say, and passengers are packing flights.”

“More dense-packing of planes is still to come. Next year, JetBlue will add two rows of seats to its A320 jets, increasing to 162 seats from 150. The galley in the rear will shrink, so JetBlue will change the way it serves snacks and drinks, using carts in aisles instead of serving from the galley with hand trays. The carrier has already pushed its A321s to 200 seats from 190.”

“On the Boeing 777 widebody jet, airlines have a choice of whether to put nine seats in each coach row or 10. British Airways recently decided to increase to 10, joining American, Air Canada, Air France, Air New Zealand, Emirates, Etihad and others. The seats’ width shrinks from 18 inches to 17 inches.” British Air Chief Executive Alex Cruz comments: “One way to get more flexibility on price is to have a few more seats on the plane. At the end when we looked at the pros and the cons, it was really overwhelming.”


Horsehair Mattress: Sleep Tight @ $2 / Hour

The Washington Post: “So how much would you pay to get a good night’s sleep? How about $150,000? … That’s what the ownership at Hästens, a firm founded in 1852 and based in Köping, Sweden is betting on. The company claims that its beds ‘will change your life, and alter the way you think about sleep forever’ … Each bed is custom made for over 320 hours by four ‘master artisans,’ using a slow-growing Swedish pinewood frame, a box-spring equipped with pure steel springs, layers of flax, horsetail hair, cotton and wool batting, all specially stacked … like a lasagna.”

“The horsehair is braided and unbraided by hand and ‘acts as a miniature airway to wick moisture away so there’s no sweat buildup’ … Bloomberg’s James Gaddy reviewed the bed at the company’s New York showroom and fell in love … So enamored was he that he started doing what customers usually do when they really, really want something: they rationalize.”

He comments: “If you keep it for 25 years and get eight hours of sleep every night, think of it as paying $2 every hour for the privilege of blissful, blissful sleep” … “Gaddy concludes that with a good night’s sleep, he can live longer, learn faster, function better, stay in better shape, and look younger.”


Super Consumers: Learning From Big Brand Fans

The Economist: “Only a tenth of customers are super-consumers but they account for 30-70% of sales, an even greater share of profits and almost 100% of ‘customer insights,’ says a new book, Super-Consumers, written by Eddie Yoon of the Cambridge Group … These people are not defined simply by the amount of stuff they buy (though they tend to be heavy users), but by their attitude to the product … they regard the things that they consume as answers to powerful emotional needs.”

“Super-consumers exist in every imaginable consumer category, from the glamorous to the staggeringly mundane. There are people who wax lyrical about the serial numbers inside toilet rolls or who worship at the altar of Kraft’s Velveeta processed cheese, which they call ‘liquid gold.’ Often, Mr Yoon points out, companies treat super-consumers as weird obsessives to be dismissed or ignored. That is a mistake, for they can, when treated well, propel growth. As well as buying large quantities themselves, they infect their social circle with enthusiasm.”

“High-passion fans … can also reveal interesting patterns in consumer markets: Generac, a producer of standby generators, discovered that people who buy lots of their generators are also more likely to be enthusiastic consumers of fridges (they often have several stocked up with food), multivitamins and life insurance. These are customers, in other words, who wish to be prepared for all eventualities … Even super-consumers who are fixated on old or existing products … can provide companies with lots of valuable advice and insights on stuff that makes money. Analysing big data is all very well. But nothing beats hanging out with your biggest fans.”


Fast Fashion: How Zara Does It

The Wall Street Journal: “A black, high-collar women’s wrap coat, fastened with a metal ring … The garment’s journey from design workshop in Spain to retail display rack in Manhattan … offers an inside look at the fast-fashion model that has made Zara’s parent company, Inditex SA, the world’s biggest fashion retailer by sales.

“A designer and pattern maker at the Spanish company’s headquarters, in the small industrial city of Arteixo, took five days to fashion a prototype of the loose-fitting winter coat … A second pattern maker, cutters and seamstresses then worked 13 days to produce 8,000 of the coats. Over the next six days they were ironed, labeled, tagged, checked for quality, then trucked to Zara’s logistics center in Zaragoza and from there to Barcelona’s airport. The next day one of the coats was on a truck from John F. Kennedy Airport to the Fifth Avenue store, to sell for $189.”

“Every creative decision about the women’s wrap coat—as all other Zara garments—flowed quickly from impromptu discussions at Inditex headquarters, in an open workspace slightly bigger than a soccer field. Designers and commercial staff sit side by side there, in electronic and telephone contact with Zara store managers around the world. Store managers, often flown in to consult, viewed a mock-up of the coat and helped shape its design … The women’s wrap coat is one of more than 50 of its kind shipped to the Fifth Avenue store in small batches this fall … To give shoppers a sense of exclusivity, Inditex says no more than 25,000 of the coats will be made, even if they sell out.”