How TJ Maxx Defies Digital Gravity

The Wall Street Journal: “Traditional retailers are in crisis, damaged by rapidly shifting consumer tastes, technological change and cut-throat price competition. And then there’s TJX Co., which is defying gravity with the simple idea that under the right circumstances people still like to shop in stores … Central to TJX’s success are its merchants. The company employs more than 1,000 buyers who buy apparel and other goods from more than 18,000 suppliers around the world. Each buyer controls millions of dollars and has authority to cut deals on the spot, unlike most department stores, which can take weeks to review and approve orders.”

“Stores typically get deliveries several times a week. The schedule ensures a continuous stream of products to lure shoppers. And because TJX doesn’t purchase the full range of colors and styles, stores have one or two items in a particular color or size, giving customers an urgency to buy … Its stores have no walls between departments, so it can quickly reconfigure floor plans. Similar clothes from different labels can be found on the same rack.”

“One area where TJX trails other retailers is on the Internet … Some brands won’t let TJX sell their products online because they don’t want the items to be easily searchable at lower prices. For certain brands that allow online sales, shoppers have to click on items before they can see brand names. The restraints are similar to those in the physical world, where some companies do not allow TJX to advertise their brands. Advertising individual labels is not part of TJX’s marketing strategy.”

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New Realities of the Grocery Experience

The Wall Street Journal: “The challenges for grocers today include a new reality: The days of shoppers filling carts during a big weekly trip to their neighborhood supermarket appear over for now. Consumers are more targeted in their shopping habits. They are less loyal to retailers and more willing to buy groceries online. And they are buying more from stores at two poles: ones with cheap prices, and ones that offer high-quality fresh food, often at a premium.”

Natalie Kotlyar, a consultant, says shoppers expect “convenience, selection and the right price and they want it now. Everyone is trying to meld those concepts to create the perfect shopping experience.”

“Chains that don’t adapt quickly to the changes in consumer behavior and business dynamics won’t survive, say analysts, who, along with some supermarket executives, expect more consolidation in the coming years and predict more grocery stores will close. To compete with Amazon, Wal-Mart is offering curbside pickup and home delivery in test markets. Kroger is expanding its platform for customers to order groceries online and pick them up at the stores. It also said it has invested $3.8 billion in lowering its prices over the past decade.”

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Schrager’s Public: Affordable Hotel Luxury

Quartz: “Forty years after redefining nightlife with the legendary New York City nightclub Studio 54, the hotelier and real estate developer Ian Schrager’s newest vision is for a new kind of affordable luxury—a hotel and arts center in downtown Manhattan that offers a blueprint for disrupting the mid-market hotel sector.” Schrager says “people don’t care about the gold buttons or if coffee is served in bone china. We offer luxury without it being obsequious.”

“With rooms starting at $200 a night, PUBLIC New York is geared to the tech-savvy Airbnb set—who are taking a growing bite out of hotel bookings. At that price, the new brand is playing the same field as some of the highest valued hotel brands, and particularly their fewer-frills ‘select service’ hotels, which have thus far weathered the exodus to Airbnb relatively well.”

“At the heart of all of Schrager’s brand propositions—from Studio 54 to the PUBLIC—is community, a growing trend in hotel design. PUBLIC is designed for a generation of savvy entrepreneurs; the hotel blurs lines between social, professional and cultural spaces with serene, light-filled, public venues with amenities to support optimal productivity and social interaction … Fast wifi and sleek design may lack the debauchery of his Studio 54 heyday, but Schrager’s new model for hospitality seeks to still offer today’s guests the opportunity to be a part of a scene.”

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Jig-Sawge: Hacking Saws for Massage

The Wall Street Journal: “The popularity of massage is rising along with the price of electric gadgets for it. So some do-it-yourself-ers are raiding garages and Home Depot and turning power tools into turbocharged robo-masseurs. Bill De Longis, head strength coach at Trinity College in Hartford, Conn., uses a jigsaw—with a lacrosse ball pierced and epoxied to its business end—for limbering the limbs of the school’s varsity athletes. He calls it his ‘jig-sawge.’ He opted to hack the $60 saw after seeing a similar massage tool priced at $600.”

“The coach also has appropriated an orbital sander (with sandpaper removed) and a battery-powered car buffer, which Trinity’s baseball pitchers and women’s lacrosse team use to warm up. Using power tools for massage seems to have originated among weightlifters and other serious athletes. The idea spread on social media, and now power tools can be found everywhere from chiropractors’ offices to tie-dyed campouts.”

“Nova Han, artistic director for the Electric Forest music festival in Rothbury, Mich., equipped a 1940s Quonset hut-style space on the event’s grounds with massage tables. Last summer, staff members dressed like Rosie the Riveter and worked rotating shifts for 12 hours a day, giving short car-buffer massages to concertgoers.” Tim Perra of Stanley Black & Decker comments: “We do not condone, approve or recommend that our tools be used for any application beyond those for which the tool was designed and intended.”

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Tote Bags Carry The Brand Message

The Wall Street Journal: “Sturdy, canvas, waterproof or made of recycled material, tote bags take up an expanding part of our lives (and car trunks) as cities, counties and states continue to impose fees or bans on plastic bags. Stores either give them away free with purchase or sell them for a couple bucks in the hopes that consumers will like them and carry them—and that others will notice.”

“When totes are durable and reusable they become longer-lived ad campaigns. Swimwear label 6 Shore Road’s founder, Pooja Kharbanda, says that she made 1,000 tote bags to distribute at pop-up stores in Montauk, N.Y., and Newport, R.I., this summer. She estimates the cost is 2.5 times what it would be if she had just chosen paper bags. But she hopes the bags will turn up on the beach, carrying flip flops and towels … Some retailers sell the bags to help cover the cost. H&M ’s tote bags cost $2 to $4 and help spread the word about its garment recycling program. Customers who trade in old clothing or textiles can get 15% off their purchase.”

Marybeth Schmitt of H&M North America comments: “We know that word-of-mouth is the strongest kind of advertising. And, this is like a form of word-of-mouth. They are recommending it by wearing it.”

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Ikea Frakta Bag: Dark-Horse Design Icon

Fast Company: “Ikea’s bright-blue Frakta bag has become something of a dark-horse design icon. Who would’ve guessed a 99-cent crinkly plastic tote would be as beloved and as indispensable, to some, as an iPhone? … Ikea casts the bag in a democratic light, showing how it’s a does-it-all-design–grocery bag, makeshift umbrella, beach tote–in virtually every scenario: vacation, biking, at home, at work, even when kicking out your ex and all his junk. In Ikea’s eyes, the bag is common ground for everyone.”

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Hollar: The First Online Dollar Store

Fast Company: Hollar is “the first online dollar store … reimagining the physical stores as a digital discount haven where the majority of inventory costs $2 and nothing goes for more than $10. Tens of thousands of products are available, ranging from necessities to impulse buys … Hollar stocks brands you recognize (Huggies, Jergens, Febreze, Pop-Tarts) and ones you probably don’t (Zing, Num Noms, Bolis Ice Pops). Via the site and app, you can buy a $3 cellphone case alongside $1 dishwasher soap and $1.50 baby bibs.”

“Hollar experienced double-digit month-over-month sales in the last year and hit its first million-dollar month in April 2016, just five months after launch, with the average purchase totaling $30 … Hollar’s typical customer is female, a mom between the ages of 25-34. And, unlike the target client of most retail startups, she is not an affluent resident of the country’s coasts. She lives in suburban and rural areas, with a middle-to-low household income.”

“A similarity to Pinterest has proved appealing to millennial moms, who make up a full 85% of Hollar’s customers and are usually in the market for deals in the top categories of toys and home goods … There’s no question that the country’s widespread move to mobile has added to Hollar’s success. While one in five American households still doesn’t have a home computer, nearly all own a smartphone—and they do everything on it.”

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$13 Burgers Slows Demand for Fast Food

The Wall Street Journal “As the number of outlets serving ‘better’ burgers—featuring nontraditional toppings and artisan buns—has skyrocketed over the past decade, so has the average burger tab, turning some customers off … Lunch traffic to quick-serve hamburger restaurants fell 5% last year—the biggest year-over-year decline that market-research firm NPD Group Inc. has recorded … The average lunch burger check—including fries and a beverage—has risen 22% since the financial crisis to $5.83, with a 4% increase last year alone, according to NPD.”

“With so much competition and only so many ways to differentiate a burger, upstarts have been coming out with evermore gourmet ingredients, such as Wagyu beef, roasted garlic aioli and truffled arugula, which have raised the bar for burgers overall—and their price tag …they can beef up profits by charging extra for additional toppings … A basic hamburger at (Fatburger) starts at $5.94, but after adding bacon and chili, it is $8.14. With fries and a drink, the combo totals $13.37.”

McDonald’s recently adopted a back-to-basics approach after years of chasing health-minded customers with products such as salads, sandwich wraps and fruit smoothies. It had neglected its burgers and recently found that only one in five millennials had ever tried its signature Big Mac … The burger giant has been trying to improve the quality of its burgers by adjusting temperatures and cook times to deliver hotter, fresher burgers. Next year, it plans to make its Quarter Pounders with fresh, instead of frozen, beef. It is also in the process of rolling out higher-end, customizable burgers from a ‘Signature Crafted’ menu to compete with the ‘better’ burger places, but at a much lower price.”

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How Best Buy Engages Shoppers

The Wall Street Journal: “Best Buy, the electronics giant left for dead a few years ago, is bucking America’s retail slump by turning its cavernous stores from a potential drag on its business into a way to fend off Amazon.com Inc.”

“To fend off digital competition, Best Buy gave up efforts to charge consumers more in stores than online. It promised in 2013 to match online competitors’ prices and brought its prices in line with Amazon’s—a move that has paid dividends now that shoppers can instantly check prices on their smartphones … The price guarantee made a loyal shopper out of Anton Robinson, a 34-year-old lawyer in New York City. He buys his music equipment from Best Buy because he prefers to test products in person and doesn’t have to compare prices.”

“Best Buy also found a way to get more out of its giant stores. The company eliminated much of the floorspace once dedicated to DVDs and other media and has given it to brands such as Samsung, Verizon and Microsoft , which both pay rent and provide staff with expertise … Best Buy plans a nationwide rollout of in-home advisory services, in which consultants will visit consumers to field technology questions. Says CEO Hubert Joly: “Having these conversations in the home unlocks all sorts of discussions with the customers. There’s some needs that people never talk about in the stores.”

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‘Amazon Charts’ Re-Define ‘Best Seller’

The New York Times: Amazon now tracks “not only the top-selling digital and print books on Amazon, but the ones that customers spend the most time reading … With its lists, Amazon aims to redefine the notion of a best seller, expanding it to include books that are ‘borrowed’ from its e-book subscription service, and ones that are streamed on Audible. As a result, the lists give increased visibility to books that might not typically appear on other best-seller lists.”

“All of Amazon’s acquisitions and new features are having a cumulative effect, allowing the company to draw on its vast customer base and troves of data to discover what is popular, and return that information to customers, creating a lucrative feedback loop … Crowdsourcing and data mining are also driving the company’s approach to its bookstores, which act as showcases for books popular with customers on the site. While the stores have traditional categories, like fiction, nonfiction and travel, the most eye-catching shelves feature categories culled from Amazon’s customer data.”

“The first thing customers see when they walk into the store is a large display table, labeled Highly Rated, which includes books with an average rating of 4.8 stars or higher on a scale of 5 … Another display case, labeled Page-Turners, features books that people finish reading on their Kindle in fewer than three days … Another section features the most ‘wished for’ books from Amazon’s website … The books are all displayed face out. Under each book is a card with the average customer rating, the number of reviews and a featured review from an Amazon reader. Displaying the full cover of each book mimics the visual look of Amazon’s website, and might lure customers to unfamiliar titles.”

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