Amazon Has Bullseye on Target

Quartz: “Target has a supply problem. The discount retailer has too much unsold merchandise on its shelves, and hasn’t figured out how to get all of it to customers quickly. To make matters worse, a new survey shows that two in five Target shoppers are also members of Amazon Prime and among those that aren’t, one in five are considering a membership in the next year.”

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“Target has made some attempts to keep up: Participants in the company’s REDCard credit card program get free shipping on all online orders. ‘I do think we can get more credit for REDCard than we potentially have,’ Target’s chief digital officer told Recode last month.”

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De-Branding: A Shift From Products to Places

Fast Company: “It’s misleading to use a totally different set of qualities—good stories—to sell a product that has intrinsically nothing to do with these qualities. Hiring a top filmmaker won’t improve the quality of your energy drink … You could even say that the better the stories, the more dishonest the companies are being.”

“Here’s where debranding comes into play … the focus will shift … from branded products to branded places: stores and their owners who select and sell the products they like … Back to the traditional shopkeeper responsible for measuring bulk food and acting as an advocate for his products. Back to the real Dr. Browns, Uncle Bens, and Aunt Jemimas. Instead of brands, real people and real tones of voice will become the interface between consumers and products again.”

“And it is totally in line with today’s networked society … increasingly in the Internet age, consumers are comfortable with the idea that everything is interconnected. So what distinguishes brands is less important than what brings things and people together—whether your iPhone can talk to your Prius, for instance, or whether you can read articles from disparate sources in one place, like on Facebook. The brand that screams the loudest no longer commands the most attention; the one that offers something genuinely useful does.”

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Loyalty Cards Pivot: From Discounts to ‘Experience’

The New York Times: “Research … shows that while people say discounts are important, they also ‘overwhelmingly say they want special treatment and offers not available to others in a loyalty program’, says Emily Collins of Forrester Research. ‘They come for the perks, but they stay for the experience’ … Sephora’s rewards program offers free samples and tutorials to loyal customers. It has three tiers, and the top spenders are invited to free closed-door events like Beauty Before Brunch, where they receive makeup lessons, discounts and a goody bag.”

“The samples don’t cost much, but are of great value to customers who want the newest makeup and hair products … and store loyalists often share these discoveries on social media, which draws in more customers. And that’s a crucial part of the equation: making sure customers aren’t just loyal, but also loud. Brands rely on them to spread the word far and wide about great loyalty programs.”

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Birchbox Unboxes An In-Box Experience

Bloomberg Business: “Birchbox is famous for cutesy cardboard boxes filled with delicate tissue paper and diminutive samples, the stars of countless unboxing videos on YouTube. But that may not be enough anymore … As it seeks a bigger slice of America’s $16 billion prestige beauty industry, Birchbox is struggling to become a full-spectrum retailer rather than just a precious peddler of monthly subscription boxes … The company is looking for an identity somewhere between the online box business and the retail store, a hybrid that can do battle with traditional beauty retailers and the horde of rival beauty boxes.”

Birchbox’s “New York store is a two-story smorgasbord of beauty products … The goods here are organized by type, not brand, unlike traditional cosmetics areas in department stores and even pharmacy chains. The format encourages shoppers to discover new labels, just as the sample boxes are meant to do. Down the light wooden stairs sits the men’s grooming section, a segment Birchbox added four years ago and a testament to its willingness to seek out new customers and one day become a multibillion-dollar brand.”

“Birchbox is still fighting to be profitable, and it hasn’t received new outside funding since a $60 million round in 2014 … Meanwhile, the move to stores has raised doubts among industry observers about the company’s devotion to the sample box. The very existence of Birchbox’s stores goes against its original pitch as the first beauty seller to do online right.” Co-founder Katia Beauchamp comments: “We really want to change the potential customer for the beauty industry. We want to change her relationship with beauty. She doesn’t have to have this boring, errand, I-have-to-do-this experience.”

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Walmart Moves Upscale To Set Itself Apart

USA Today: “Depending on which Walmart store you choose nowadays, you might do a double take. In a growing number of stores, there’s an entire wall dedicated to organic produce, fresh sushi and a selection of about 50 gourmet cheeses … Forget just having a cold case of packaged deli meats — now there’s a charcuterie section … Roma tomatoes tumble down angled displays that make it easier to see what’s available and honeycrisp apples beckon from farmers market-style crates.”

“These Walmarts are the leading edge of what could become a grocery revolution at the giant retailer … Walmart’s produce and bakery sections are being upgraded to make them more attractive and easy to navigate … Further into the store, the bakery department now has chalkboard-style signs, lower tables that better showcase cakes and cookies, and bread baskets that invoke the charm of a local market … Walmart put department managers back in grocery after having removed many of them to improve efficiency … At the same time, Walmart is ramping up its online grocery service with store pick-up … The service doesn’t require customers to leave their car — a store employee brings out pre-bagged orders”.

“Walmart spokesman John Forrest Ales says many pick-up customers then stay and shop some more … The higher-end feel of its food offering may also attract higher-earning customers who could help increase sales in other areas too … Walmart can no longer rely on its bread and butter — low prices — to set itself apart.”

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Hostel Territory: High Style on the Cheap

Fast Company: “For the past few years hostels—once the domain of twenty-something backpackers looking for cheap accommodations, design damned—have undergone a makeover and are touting the same amenities and aesthetic considerations as fancy hotels. Gone are the days of lumpy beds and questionable cleanliness … The Backstay Hostel, in Belgium, boasts accommodations in a gorgeous Art Deco structure. Grupo Habita—a luxury hotel developer—opened Downtown Beds in Mexico City.”

“The Generator, in Amsterdam, is outfitted with furniture from the au courant British designer Tom Dixon and hometown star Marcel Wanders. Its walls are festooned with whimsical wallpaper from the design-art duo Studio Job. Curated antiques and artwork add a quirky element to the lobby and guest rooms. Sounds like a recipe for the newest spendy boutique hotel, but a bed at the hostel will only set you back $15.”

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Chick-fil-App: No More Waiting in Line

Business Insider: “Chick-fil-A is rolling out a new app that will let customers avoid waiting in line at the register. The app, called Chick-fil-A One, will allow customers to order and pay for their food in advance, then pick it up at a counter designated for online orders. The app will also allow users to customize and save their favorite orders. Michael Lage, a veteran of Facebook and Google who helped develop the app, says it will change how customers, particularly parents with young children, experience and interact with Chick-fil-A.”

“To celebrate the launch of the app, Chick-fil-A is giving away free chicken sandwiches to everyone who downloads it between June 1 and June 11 … The app will continue to give away free food beyond the launch through its built-in rewards program, which will randomly send customers free-food offers based on what they typically order.”

“When customers get free treats from Chick-fil-A, they will have the opportunity to rate them. Those ratings will be factored into the app’s future free-food offers. Customers will typically get a choice of several items for their free-food offers. For example, they will be allowed to choose among a free drink, dessert, or medium fry. ‘We want to make sure the experience is based on personalization and choice,’ Lage said.”

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The ‘Perfect’ Ingredient Tells A Story

The Washington Post: “Artisanal beauty products are often built around at least one obscure ingredient, the procurement of which (it’s implied) is really difficult. There’s no distance these brands won’t travel, whether for a body scrub with ‘white sand particles from the shores of Bora Bora,’ or a ‘gel treatment serum’ made from ‘the stem cells of Australian kakadu plums.’ They might need to go back in time to craft skin products made with ‘donkey milk . . . known as a beauty elixir since the ancient ages.’ There’s an emphasis on the rare find from nature, almost but not quite lost to mankind … the fruit from a tree previously known only to peoples of the Amazon.”

“That rare ingredient must be gathered with care, ideally by local villagers, processed in a lab under the most stringent standards, and then placed into a product whose label declares its transparency of its process, its freedom from potentially dangerous chemicals, its fair trade and cruelty-free status, its philanthropic efforts, and the all-around goodness of its intentions.”

“The perfect ingredient doesn’t just moisturize or smell good or look pretty on a label; the perfect ingredient tells a story we all want to hear.”

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