Chase Sapphire Reserve & Millennials

Quartz: By one estimate, 63% of millennials don’t have credit cards, so it’s curious they’re suddenly fawning over a new, perhaps viral, card on the market. The Chase Sapphire Reserve has been a hit since it was revealed in late August … The Sapphire Reserve, which is embedded with metal making it heavier than typical credit cards, proved so popular that Chase actually ran out, leading it to issue temporary plastic cards.”

“Banks have had a hard time courting millennials, but Chase believes it’s cracked the code by tapping into their wanderlust. The perks of the Chase Sapphire Reserve include lounge access at airports, a $300 annual travel credit, a $100 credit toward an application for TSA Global Entry or Pre-Check (both programs expedite airport screening), and three points for every dollar spent on travel and dining.”

“These perks were carefully calculated by the bank to lure millennials. At a conference held by Barclays this month, JP Morgan’s head of consumer banking, Gordon Smith, gave a presentation that said ‘millennials spend more of their wallet on experiences than other generations,’ according to a deck obtained by Quartz. It defines “experiences” as travel, entertainment, and dining.”

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Time, Money & The Roots of Happiness

The New York Times: “Given the choice between more time or more money, which would you pick? … Which would lead to greater happiness — the money or the time? … For a research project, we put this question to more than 4,000 Americans of different ages, income levels, occupations and marital and parental status. In a paper in the journal Social Psychological and Personality Science, which we wrote with our student Uri Barnea, we found that most people valued money more than time. Sixty-four percent of the 4,415 people we asked in five surveys chose money.”

‘We had also asked our survey respondents to report their level of happiness and life satisfaction. We found that the people who chose time were on average statistically happier and more satisfied with life than the people who chose money … But maybe this result simply shows that the people who chose money are more financially constrained and therefore less happy. To check this, we also asked respondents to report their annual household income along with the number of hours they work each week (to measure how much time they have).”

“We found that even when we held constant the amount of leisure time and money respondents had (as well as their age, gender, marital status, parental status and the extent to which they valued material possessions), the people who chose time over money were still happier. So if we were to take two people who were otherwise the same, the one who chose time over money would be happier than the one who chose money over time.”

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Zalando: Fashion, Emotion & Ecommerce

The Economist: “One of Europe’s most interesting technology companies sells shoes and threads … Zalando has a Silicon Valley-inspired work environment, holding “f**k-up nights’ to celebrate failure and ‘hack weeks’ to cook up new ideas. It encourages its employees to abandon hierarchy and structure for what it calls ‘radical agility.’ It has a 1,350-strong, and rapidly growing, technology team. Among its other assets are its software, which it built itself, and its user-friendly apps (two-thirds of all traffic goes through mobile phones).”

“Zalando pays close attention to data. It gleans a wealth of numbers from the more-than-5m daily visits to its site, and some brands and retailers of the bricks-and-mortar sort give it access to their stock counts. Both sets of figures help improve the firm’s forecasting of fickle fashion trends, its use of targeted ads and the speed of its responses to shifts in weather patterns or fashion tastes. Through data-mining it can spot the trendsetters among its customers and stock up on what they buy. In future it wants to sell its insights to the rest of the industry.”

“Amazon is pursuing the more price-conscious shopper, whereas Zalando is after a higher-value, more brand-conscious segment. The company believes that for such customers, shopping for clothes, shoes and accessories is an emotional activity; shopping on Amazon is just a transaction.”

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Abercrombie & The Demographics of Fashion

Business Insider: “Abercrombie has been trying to save itself for a while now, reinventing its image and as a result becoming totally unrecognizable to the generation of kids who grew up shopping there in the late ’90s and early aughts. The goal was to appeal to older shoppers — 18 to 25 year olds, not teens … In theory, this was a smart idea … this would open the gates to a demographic with more spending money. The move would also help Abercrombie set itself apart from its more teen-friendly sister brand, Hollister … But the brand’s attempt to execute a turnaround is proving to be very difficult.”

Eric Beder of Wunderlich Securities comments: “While the shift to an older customer is a strategy for Abercrombie, we see limited reasons for older customers to shift back to a ‘teen’ brand and, frankly, there are better brands and lifestyles for the 20+ customer to focus on.”

Betty Chen, managing director of Mizuho Securities adds: “In the history of retail, it is very difficult when a brand tries to reposition itself anywhere along the age demographic. You can almost predict failure when you’re going older or younger.”

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Lowering The Bar: Soap Loses Lather

The Washington Post: “More than half of consumers — 55 percent — say bar soap is inconvenient when compared to liquid varieties, according to a new report by research firm Mintel. Among their chief complaints: Bar soaps leave residue in the shower, require a dish for storage, and aren’t as long-lasting as liquid options.

“An earlier study by Mintel found millennials are eschewing cereal for similar reasons. Roughly 40 percent of those surveyed by Mintel said ‘cereal was an inconvenient breakfast choice because they had to clean up after eating it,’ according to The New York Times. As a result, cereal sales have slipped by nearly 30 percent since 2000.”

“But when it comes to soap, the perception of cleanliness may also be a factor. Nearly half of those surveyed said they believe bar soaps are often covered in germs, a view that was more widely held among younger consumers than older ones.”

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Luke’s Lobsters: Rolls From ‘Trap to Table’

The New York Times: “Oil companies have long practiced a vertical integration strategy to track and control the flow of petroleum from the oil field to the gas pump … Now the practice is gaining momentum in the food industry.” Among this new breed of restauranteurs is Luke Holden, co-owner of “19 Luke’s Lobster restaurants, two food trucks and a lobster tail cart in the United States, and five shacks in Japan.”

Luke “holds an ownership stake in a co-op of Maine fishermen, which allows him to track where and how the lobsters are caught, and control the quality, freshness and pricing. He also owns the processing plant, Cape Seafood, that packages and prepares the lobsters for his restaurants.” He comments: “We’re able to trace every pound of seafood we serve back to the harbor where it was sustainably caught and to support fishermen we know and trust.”

“When Mr. Holden agreed to buy all of the co-op’s catches for his restaurants, support its sustainability practices and give the co-op 50 percent of the profits from a Luke’s Lobster restaurant that is attached to the wharf, the fishermen agreed … Mr. Holden is projecting sales of $25 million this year and $42 million in 2018. Plans are in the works to open six new restaurants this year and 40 more by 2020.”

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Cool Beans: America’s New Favorite Snack?

Christian Science Monitor: “Once relegated to the canned food aisle and the far reaches of the salad bar, the bean suddenly is becoming a star. These days, it’s popping up in the most unexpected places: in pasta and chips, and even as a centerpiece of dishes at the world’s best restaurants. And it’s no wonder, considering beans are packed with protein and a plethora of other nutrients, say nutrition experts. They’re also inexpensive and among the most environmentally benign agricultural crops.”

“Last year in the United States, sales of pulses – which are the seeds of legumes that are used as food, including peas, beans, lentils, chickpeas and fava beans – grew by 8 percent. By comparison, sales of meat grew by 3 percent. Global demand is also rising, especially for foods with green or yellow split peas and coral-colored lentils, reports market researcher Mintel.”

“Pepsi has launched a bean chip under its Tostitos brand, as has General Mills, under its Food Should Taste Good brand. The Good Bean chips are now available at many conventional grocers, including Costco. Its sales doubled in 2015 and are expected to do the same this year, says the company. Even 7-Eleven has signed on to carry the chips.”

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Friday’s Re-Design: Millennial Minimalism

The Atlantic: “Strategically de-cluttered, devoid of flair—devoid, indeed, of any decor that might distinguish them from their fellow establishments—chain restaurants are melding, visually, into one tentacular beast. They are, en masse, going normcore.”

“The redesigns are … responding to a culture that is renegotiating its relationship with ‘stuff’ as a concept. More and more young people are renting homes rather than buying them; many of them simply intuit, in a way their parents cannot, the life-changing magic of tidying up. In an age defined by anxieties about the limitations of the planet’s physical resources, minimalism is a moral as much as it is an aesthetic.”

“T.G.I. Friday’s recently rebranded as ‘Fridays’; even its name has been subjected to the whims of minimalism. And its new look, whether manifested in Corpus Christi or Des Moines or Alexandria, evokes Silicon Valley—whose corporate spaces, in general, are defined by their airiness, and their emptiness, and their engineering of ‘serendipitous’ social interactions … You don’t need flair on the walls, after all, when you have a screen on your table.”

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Cuteness & Our Consumerist Culture

The Washington Post: “Cuteness is an especially powerful force in our digital world because it is something that can be consumed in quick, small doses, in a gif or picture. And it has blossomed in our consumerist culture because it is incredibly good at selling things … According to a body of academic research … the science of cuteness begins with babies. Babies have large eyes and heads, button noses, soft, chubby bodies, floppy little limbs and a teetering gate. Those properties are echoed in Pikachu, puppies and even the Volkswagen Beetle.”

“Researchers say that the rise of cuteness is closely tied with industrialization, advertising and the rise of consumerism in the late 1800s and onward. By the 1910s, for example, Kewpie dolls … were used to advertise Jell-O. The Morton Salt Girl appeared in Good Housekeeping in 1911, and the Gerber baby appeared in 1928. The Coppertone Girl, the Pillsbury Doughboy and the Snuggle Bear came after World War II, with the arrival of television.”

“And companies have extended the power of ‘cuteness’ in less predictable ways — selling smaller-sized versions of their products, typically for a higher price per pound. Think of miniature M&Ms, cupcakes, and iPod minis … In a 2011 study, researchers found that consumers saw the fronts of cars as similar to human faces, with the headlights representing the eyes. Cars with big, round headlights elicited more positive responses.”

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Quote of the Day: Dick Johnson

“The facts are that most of the basketball shoes that we sell never see a basketball court. Most of the running shoes that we sell never see the roads or the trail or the track. They just look really good, and they’re part of the sneaker culture that we really support.” – Dick Johnson, CEO of Foot Locker, reporting that second-quarter sales at existing Foot Locker stores rose 4.7%, via The Wall Street Journal.

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