Quartz: Many global brands of the last decade have taken names of false provenance and enjoyed great success thanks to a paradigm hereby dubbed, “The Häagen-Dazs Effect.” … Häagen-Dazs ice cream, meant to sound Danish, was born in the Bronx. But the name tells a tale, from that umlaut to the silent “s” on the end, of premium, European origins. And when consumers reach for a pint, they sense the true value this faux identity adds.
“The Häagen-Dazs Effect makes an impact as well in these four notable brand names with made-up or embellished heritage and powerful identities: Sir Kensington’s makes high-end condiments and tells “the tongue-in-cheek ‘saga’ of an Oxford-educated gent who developed the original spiced ketchup recipe for Catherine the Great of Russia.” St. Germain, an elderflower spirit made in the USA, is named for the Saint-Germain-sur-Rhône region of the French Alps, where the stuff was first made.”
Warby Parker “took its name from Warby Pepper and Zagg Parker, two characters from one of Jack Kerouac’s journals … Brandy Melville was created by merchandising veteran Silvio Marsan and his son Stefan in Italy … Purportedly, the name is based on an imagined American girl (Brandy) who falls in love with an Englishman (Melville) in Rome … Ultimately, we’re talking here about the critical importance of a name that succinctly tells a compelling brand story–whether that story is imagined or not, it must be told with richness and believability. These brands are a few to do so, making the Häagen-Dazs Effect, when done right, a tactical tool for naming success.”
“A bit more than a year after its release, Amazon’s Echo has morphed from a gimmicky experiment into a device that brims with profound possibility,” writes Farhad Manjoo in The New York Times. “Here is a small, stationary machine that you set somewhere in your house, which you address as Alexa, which performs a variety of tasks — playing music, reading the news and weather, keeping a shopping list — that you can already do on your phone.”
“But the Echo has a way of sneaking into your routines. When Alexa reorders popcorn for you, or calls an Uber car for you, when your children start asking Alexa to add Popsicles to the grocery list, you start to want pretty much everything else in life to be Alexa-enabled, too. In this way, Amazon has found a surreptitious way to bypass Apple and Google — the reigning monarchs in the smartphone world — with a gadget that has the potential to become a dominant force in the most intimate of environments: our homes.”
“Many in the industry have long looked to the smartphone as the remote control for your world. But the phone has limitations. A lot of times fiddling with a screen is just too much work. By perfecting an interface that is much better suited to home use — the determined yell! — Amazon seems on the verge of building something like Iron Man’s Jarvis, the artificial-intelligence brain at the center of all your household activities.”
“Scot Wingo, the chairman of ChannelAdvisor, an e-commerce consulting firm, said the early signs suggested that the Echo was on a path to become Amazon’s next $1 billion business.”
The Wall Street Journal: “Following unsuccessful efforts to appeal to a broader, more health-conscious customer base with salads, snack wraps, smoothies and low-calorie french fries, Burger King has returned to its roots as a purveyor of inexpensive burgers, fries and, now, hot dogs.”
“The bloated menu complicated kitchen operations and failed to attract customers as hoped. In 2010, Burger King launched more than 30 limited-time offers and 20 permanent menu items. By comparison, it launched 20 limited-time offers last year and no permanent menu items.” Burger King President Alex Macedo: “In a moment when a lot of brands in quick service are trying to become more fast-casual, we’re taking an opposite view.”
“David Harper, a franchisee who operates 72 Burger Kings in several states, said the chain has learned not to repeat its biggest mistake: copying rivals. ‘We know who we are now,’ he said … The changes are showing results. Burger King’s adjusted earnings before interest, taxes, depreciation and amortization grew 68% between 2010 and 2015 … Same-store sales at U.S. and Canadian restaurants grew 5.7% last year, better than most big rivals.”
“Gary Friedman, head of Restoration Hardware Holdings Inc., painted a dire picture of the furniture chain in an internal memo to employees, comparing its operations to a burning building with people on fire,” Bloomberg Business reports.
“Upset about customer service and late orders, Friedman fired off the message to the entire organization in late January … ‘We were sitting there discussing how the building caught on fire, why the building caught on fire, how long we expected the building to continue burning,’ he said in the memo … ‘NO ONE WAS FOCUSED ON THE PEOPLE IN THE BUILDING WHO WERE ON FIRE. THEIR CLOTHES BURNING, AND MANY OF THEM DYING. WE HAVE LET CUSTOMERS DIE.'”
“’We need a MASSIVE CHANGE IN OUR CULTURE AND ATTITUDE RIGHT NOW,’” Friedman said in the message, which was replete with capital letters. “THE GOAL IS DELIGHT … YOU WILL NEVER GET IN TROUBLE FOR MAKING A DECISION TO DELIGHT OUR CUSTOMERS. YOU WILL, HOWEVER, LOSE YOUR JOB IF YOU DON’T.”
Explaining the memo in an interview, Friedman said: “It’s empowering people in the organization,” he said. “We have a leadership culture, not a followship culture.”
Quartz: “Consumers are more unhappy with customer service at department and discount stores than ever. According to the University of Michigan’s American Customer Satisfaction Index, satisfaction is at its lowest level since 2008, falling during the last year by 3.8%. Consumers are griping about store cleanliness and slow checkout lines, specifically.”
“Of the bigger companies, the steepest decline in satisfaction—an 8% drop—went to Macy’s … While an improving housing market increased competition between Lowe’s and Home Depot, both groups saw drops of 9% and 4%, respectively. Among supermarkets, Whole Foods took a 10% hit, knocking its ranking below Trader Joe’s, Kroger and Meijer.”
“The relatively buoyant economy is partly to blame. After 2008, competition for consumer dollars intensified, prompting discounts and better service. Employees fearful of losing their jobs stayed motivated to work hard pleasing shoppers. Then, things got better.”
What defines loyalty in the customer-brand relationship? Until this week, Starbucks defined it as the number of times the customer bought a cup of coffee; buy 12 cups and you get one for free. The retailer has now re-defined loyalty as the amount of money spent. This has caused upset among some of its “loyal” customers, who now must purchase 32 cups of coffee to get that free cup. Starbucks apparently was inspired by certain airlines — Delta and United — that now award loyalty points based on the amount of dollars spent, and not on the number of miles traveled. This might telegraph as: We want your money but we don’t want you.
The Starbucks switch was at least partly motivated by profits; obviously it is more profitable to motivate its most profitable customers. However, it also suggests a change in culture. As reported in The New York Times, the Starbucks loyalty program previously was premised on a warmer, fuzzier idea, as articulated by a Starbucks marketing manager in a 2012 blog post: “At Starbucks, our rewards program comes from a different philosophy. At its simplest, we like seeing you, regardless of whether your purchase is a short-brewed coffee or four Venti White Chocolate Mochas. My Starbucks Rewards is designed to show our appreciation simply for stopping by.”
This would be consistent with the way Starbucks famously welcomes everyone to hang out as long as they like at their stores, even if they buy nothing at all. Sadly, such “customers” are the poor cousins of those who gamed the Starbucks loyalty program by asking cashiers to ring up each item separately to artificially inflate their number of visits. This subterfuge also caused lines to slow, making the Starbucks experience worse for everyone else.
The Starbucks-customer relationship in total calls into question the very meaning of “loyalty,” and whether it even exists in a commercial context. As the Times article notes: “Starbucks fell into a trap that is common with loyalty programs: establishing not just an exchange relationship with its customers based on mutual benefit, but a communal relationship based on mutual caring and support … If customers are going to take a ‘hey, it’s just business’ approach to their relationship with Starbucks, they should expect the company to do the same — and it has.”