Half of Americans Fear Shopping Online

Boing Boing: “A study by the Department of Commerce’s National Telecommunications and Information Administration found that half of American Internet users are ‘deterred’ from engaging in online transactions because of fears over privacy and security breaches … The survey’s respondents cited the risk of identity theft as their main source of anxiety, followed by privacy concerns over data collection by online services and the US government.”

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McDonald’s Ritual = Customer Loyalty

The Washington Post: “Surely there are plenty of customers who have traded up from the fast-food standbys for pricier offerings from fast-casual restaurants that they perceive as healthier and fresher. But now that we’re deeper into the fast-casual boom and consumers have adjusted to this new restaurant landscape, it’s worth noting that they tend to stay exclusively in one dining lane.”

“So if Taco Bell, for example, were to slip into a rough patch, it seems more likely that those dollars are being lost to another fast-food player — not Chipotle. And as Chipotle aims to pull out of the sales spiral it has been in since some of its restaurants were closed because of e. coli contamination, it might be better off not trying to emulate Taco Bell’s new breakfast menu, but instead trying to win over the people getting lunch at Panera.”

“McDonald’s still dwarfs the other brands in terms of overall foot traffic, and its customers have very little overlap with other chains … McDonald’s customers also tend to be more loyal than any others in the industry, preferring to stick with the Golden Arches as a ritual instead of bouncing around different chains.”

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Some Men Go Shirtless When Brushing With Crest

The New York Times: “Among the tidbits that Crest, owned by Procter & Gamble, learned from its recent monthlong quest for selfies: There’s a huge spike in brushing from 4 to 6 p.m., probably tied to a desire for happy-hour fresh breath. That knowledge could be useful when Crest decides which times of the day to start future social media campaigns.”

“The selfies are a good way for companies to obtain information that people can’t or don’t articulate in focus groups or other traditional research methods … For example, they could lead to an understanding of which rituals go along with certain types of consumption … About 11 percent of the men in the Crest photos were shirtless, a level of comfort the brand rarely sees when it uses other tools in its research arsenal.”

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Crowdsourced Insights: The New Focus Group

“Crowdsourcing is fast, cheap and scruffy, especially when you need to move quickly,” says Lee Mayer in The New York Times. Chris Hickens of UserTesting, which uses crowdsourcing to get at consumer insights comments: “Crowdsourcing has replaced focus groups. It’s faster and a lot cheaper. Innovation is going so fast that we need faster answers.”

“Josh Gustin, co-founder of the online men’s wear store Gustin in San Francisco, put his own twist on crowdsourcing. He was searching for a better way to sell his handmade wares, which include jeans from denim woven on vintage shuttle looms … The company’s new approach is simple, yet deeply cost-effective. A garment is designed and then posted on the site. If 100 people order it, for example, it goes into production. The result: zero inventory and zero waste.”

Gustin comments: “We suffered through the old retail model and the capital requirements. You can never guess right.” The efficiency realized via crowdsourced insights also enables him to “offer jeans once priced at more than $205 for $81, and a $200 Japanese cotton button-down shirt for $69.”

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Air Rage: It’s a First-Class Problem

Quartz: “Researchers from the University of Toronto’s Rotman School of Management and Harvard Business School showed that incidents of air rage in economy class were significantly higher when planes had a first class cabin.”

“Their models showed that rage was nearly four times as likely on flights with a first class cabin than on those without. Controlling for factors like seat pitch and width, the researchers concluded that having first class increased the odds of passenger problems amounting to an additional 9.5-hour delay.”

“In addition, the researchers showed that when people had to walk through first class to get to their seats, rage among first class passengers themselves was nearly 12 times as likely as when people boarded from the middle. When people in economy class had to walk through first class, rage was about twice as high among the economy class passengers.”

“The study shows correlation, not causation, so the researchers can’t be sure that simply the sight of wealth makes people more irritable. There are other factors that could contribute to air irritability: Larger flights with multiple cabins could correlate with longer board times and more unwieldy carry-on storage, which could both make people more likely to act out.”

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Readers vs. Users: A Cure for the Common Algorithm

Quartz: “To be sure, there’s a sick kind of symbiosis involved in so-called metrics-driven journalism. Content farms produce what the metrics say users want, and users give their attention, against which content creators can sell ads … And so it’s no surprise that when publications treat readers as users, they find what they expect to see: vapid, venal, flaky masses who constitute a collective problem to be solved by the data wizards of Silicon Valley.”

“But readers aren’t the problem. Readers are the solution. If publications can reclaim the reciprocal relationship between themselves and the people for whom they tell stories, then they can nurture a different kind of growth. It would not be the fast, social media-driven pageview growth that we see from venture capital-backed media upstarts. It would not be wide growth. Rather, it would be deep growth: fewer users but more loyalty and impact.”

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Upgrade Downgrade: Bad News for Apple’s iPhone

The Wall Street Journal: “The death of the two-year cellphone contract has broken many Americans from a habit of routinely upgrading their smartphones … Citigroup estimates the phone-replacement cycle will stretch to 29 months for the first half of 2016, up from 28 months in the fourth quarter of 2015 and the typical range of 24 to 26 months seen during the two prior years.”

“Since the early days of Apple Inc.’s iPhone, most customers have avoided paying for the full price for the latest model. But the success of AT&T Inc. and Verizon Communications Inc. since 2013 in shifting customers into plans that force them to pay the full price for devices—and separate that cost from monthly service fees—has consumers holding on to their devices longer.”

“Analysts see the longer device life as positive for the carriers because it could lead to fewer service cancellations or defections in the competitive industry … The longer upgrade cycle lowers equipment revenue for the telecom companies, but Verizon’s Chief Financial Officer Fran Shammo argued last month that the top-line shift is painless … The shift isn’t as benign for Apple. BTIG analyst Walter Piecyk recently cut 10 million units out of his fiscal 2016 and 2017 iPhone estimates because of shifting upgrade rates in the U.S.”

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Cutting The Cord: Not Just for the Poor Anymore

The Washington Post: “Low-income Americans are still one of the biggest demographics to rely solely on their phones to go online.” However, “even people with higher incomes are ditching their wired Internet access at similar or even faster rates compared with people who don’t earn as much.”

“In 2013, 8 percent of households making $50,000 to $75,000 a year were mobile-only. Fast-forward a couple of years, and that figure now stands at 18 percent. Seventeen percent of households making $75,000 to $100,000 are mobile-only now, compared with 8 percent two years ago. And 15 percent of households earning more than $100,000 are mobile-only, vs. 6 percent in 2013. Stepping back a bit, as many as 1 in 5 U.S. households are now mobile-only, compared with 1 in 10 in 2013. That’s a doubling in just two years.”

“This suggests that having only one form of Internet access instead of two may no longer be explained simply as the result of financial hardship — as might be the case for lower-income Americans — but could be the product of a conscious choice, at least for wealthier people, who are deciding that having both is unnecessary.”

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Nickels & Dimes Keep Airfares Low

“Air travelers love to gripe about fees: $25 to check a bag; $34 for early boarding; $129 for a few more inches of legroom,” writes Rafi Mohammed in The Wall Street Journal. “The challenge for this kind of model is managing perceptions … Customers may feel nickeled and dimed, but the a la carte model gives them the option to save money. Theoretically airlines could bake the cost of amenities into the base fare and then offer ‘discounts’ for giving them up. But that isn’t intuitive: Take $9.95 off if you don’t use in-flight Wi-Fi?”

“American Airlines recently charged $22 for ‘preferred’ seating in the front of the cabin—but with no added legroom. Internet access on some flights costs $40. Is this gouging? No, travelers who pay for these extras are subsidizing low fares for the rest.”

“In 2014 airlines generated $38 billion in ancillary revenue, according to a study by IdeaWorks. That money keeps base fares low. And airline profits are far from outrageous. The average net margin for all scheduled U.S. carriers was 4.4% in 2014. Even in the first three quarters of 2015, after oil prices had plummeted, the average net margin was only 14%.”

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The Gray Market: Boomers are Booming

The Economist: “Today the developed world is in the early stages of a ‘gray-quake.’ Those over 60 constitute the fastest-growing group in the populations of rich countries, with their number set to increase by more than a third by 2030, from 164m to 222m. Older consumers are also the richest thanks to house-price inflation and generous pensions. The over-60s currently spend some $4 trillion a year and that number will only grow.”

“Some firms are trying to understand older people better. Kimberley-Clark, a maker of consumer products, has built a mock-up of what a senior-friendly shop might look like in the future. Ford has created a ‘third-age suit’ for car designers to wear to help them understand the needs of older people: the suit thickens the waist, stiffens the joints and makes movement more cumbersome … Understanding is giving birth to new products and business models … Retailers are surreptitiously lowering shelves and putting in carpets to make it harder to slip … Kimberley-Clark has overhauled its Depend brand of adult nappies to make them more like regular underwear.”

“The baby-boomers have changed everything they have touched since their teenage years, leaving behind them a trail of inventions, from pop culture to two-career families. Retirement is next on the list.”

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