Exact Change: The Shekel Effect

Dan Ariely: “People are more inclined to buy items that are priced on the scale of familiar, low-denomination coins. When something costs the same as a coin, we can categorize the purchase as cheap and not think too much about it. But the moment something costs more than a single coin, we start thinking more carefully about whether or not we want to buy it.”

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Brick Sh*thouse: It’s not Amazon’s Fault

Business Insider: “Online sales are growing rapidly — up 15% in the most recent quarter compared to 4% for total retail sales. But total e-commerce sales account for just 8.5% of overall retail sales in the US. The other 91.5% of purchases are still made in brick-and-mortar stores, according to the US Census Bureau. So what’s sending mall and store traffic plunging, if most purchases are still made in stores?”

“Retailers expanded rapidly in the 1990s, blanketing the US with hundreds of shopping centers and strip malls under the expectation that demand would follow. Demand never quite caught up and then the recession hit, resulting in a sharp contraction in discretionary spending … Too much excess retail space has led to a drop in retail sales per square foot in the US.”

“Many retailers expected sales to bounce back after the recession. But that never happened for a majority of mall-based stores, primarily because people changed their shopping habits … Specifically, shoppers are buying more experiences than things … this trend, which has been particularly devastating to apparel retailers, is due in part to the rise of social media.” Consultant Doug Stephens comments: “Experiences make a better story on social media than things.”

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New England Scrambles to Save Country Stores

The Wall Street Journal: “For 203 years, the Francestown Village Store served its tiny New Hampshire town, selling everything from fresh-baked bread and live fishing bait to winter hats and groceries while offering a place where residents could gather and gossip. But the institution, formerly known as the Long Store, closed earlier this month … hit by changing consumer habits such as online shopping and residents who increasingly commute out of the town of 1,600 for work and shop at large grocery stores on their way home.”

Designed to provide everything rural residents might need, general stores often are packed to the gills with things ranging from tools and electrical supplies to fly swatters, newspapers, meat and other food, long underwear and maybe even a bottle of champagne. Many offer postal services and function as a town center, where locals debate political issues or find out who in the community needs help.”

“Vermont is losing three or four general stores a year, and is down to about 80 from more than 100 a decade ago … In Putney, Vt., the local historical society raised money to buy the embattled Putney General Store and in May took over the day-to-day operation there. In Bath, N.H., Scott and Becky Mitchell jumped into an auction last year and bought the historic Brick Store, which is so old that the sides of its counter are angled to allow women in hoop skirts to get closer to the merchandise.” Says Becky: “Customers come and say, ‘thank you for saving it.’ The town really needed it.”

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Adidas Grows ‘Creator Farm’ in Brooklyn

Business Insider: “In Greenpoint, Brooklyn, in an unassuming warehouse space just across the street from a stone supplier, Adidas is plotting the future. That’s where the company has built its Brooklyn Creator Farm, a relatively secret location where Adidas hosts a small team of designers from studios around the world. Their job? ‘Creating culture,’ said Marc Dolce, VP and creative director at Adidas.”

“The farm is separated into two parts: the designer’s area, and the Adidas’ Brooklyn MakerLab. The MakerLab — which is one of three in the Adidas ecosystem — has all the high-tech machinery and materials needed to create any kind of sneaker or piece of apparel the designers can dream up … The designer’s area itself is chock-full of idea boards and materials to inspire … Global Creative Director Paul Gaudio said it’s called a farm because the brand wanted the space to be ‘earthy and real and where you can get your hands dirty’.”

“The farm designers are influenced by the fluid and dynamic culture of where they are in Brooklyn. For example, a designer can join a night running group and learn not just what they need from a running shoe, but what these runners do for fun and what kind of lives they lead … “In the end, it’s very much a brand statement,” Gaudio said. “It’s who we are; It’s who we want to be. It’s so deeply connected to that strategy of understanding where culture happens. New York City is the place.”

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The Four Faces of Facebook

Quartz: “Anyone who uses Facebook can safely assume that to the company we are all one type of one thing: bundles of sellable data … Now a new study, published in the International Journal of Virtual Communities and Social Networking, confirms that Facebook has a Rashomon effect: various user groups interpret the experience of using it very differently. Surprisingly, however, the researchers also found they could easily categorize users into four broad types: ‘relationship builders,’ ‘window shoppers,’ ‘town criers,’ and ‘selfies’.”

Relationship builders: “A sample statement that relationship builders identified with was ‘Facebook helps me to express love to my family and lets my family express love to me.’ As the researchers explain in the study, this gang does not consider Facebook an ‘open virtual social society but rather a mini-hub site for personal storytelling, where information freely flows between friends and family’.” Window Shoppers: “Driven by ‘a sense of social obligation’ to be on Facebook, window shoppers see Facebook as an inescapable part of modern life, but they very rarely divulge personal information, share photos, or write updates. Nor do they do much liking or commenting.”

Town Criers: “Unlike relationship builders, their virtual world does not resemble their real life. They might broadcast information they feel compelled to share to a wide range of close and distant connections, but they’re not looking for a follow-up—or not online anyway … Most town criers would rather pick up the phone, text, or direct message someone for an actual conversation.” Selfies: “Selfies routinely use the same Facebook features as relationship builders … but they do it primarily to call attention to themselves, say the researchers behind this study … One seductive quality of online interaction generally, Boyle notes, is that people are able to create a better—or different—versions of themselves.”

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Slow Dollars: Key to Local Grocery Success

Anne Kadet: “It’s a mystery. Local markets clearly are losing business to national outfits such as Whole Foods Market , Trader Joe’s and Target. So why don’t they up their game? To my surprise, Enrico Palazio, who co-owns the Montague Street Key Food with his uncle, says he doesn’t view Trader Joe’s as competition. It doesn’t have a deli, butcher or even a respectable detergent section. ‘This is one-stop shopping,’ he says of his store. The real competition, he notes, is FreshDirect.”

“Mr. Palazio “spent a lot of money on last year’s renovation, aiming to outdo FreshDirect by making his store a pleasant place to shop. His markups reflect that investment, he says, but his prices are still lower than FreshDirect. Because his 10,000 square-foot Key Food is too small to carry products at every price point, Mr. Palazio caters to neighborhood preferences. He doesn’t sell the cheapest ice cream brand, for example, but he does stock McConnell’s Fine Ice Cream.”

“To handle more customers, Mr. Palazio says, he’d have to cram the store with more cashiers, baggers and stock clerks. The busy, hectic atmosphere wouldn’t appeal to his clientele, he believes. Burt Flickinger, managing director of retail consultancy Strategic Resource Group, says this strategy is typical of many local supermarkets. ‘It’s the slow dollar versus the fast nickel,’ he says.”

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Technology Cannot Hug a Customer

The New York Times: “Technology, some hotels are finding, has its limits. ‘Technology cannot hug a repeat guest,’ said George Aquino, the vice president and managing director of AHC+Hospitality … That is the reason his company, which manages several hotels, has been running a training program for some of its managers and other staff members to improve their hospitality skills, connect with local business leaders and learn more about local tourist offerings.”

“Similar programs are sprouting in other cities, involving not just hotels but also restaurants and even cities themselves, which see the personal touch as giving them a competitive edge. For business travelers, in particular, talking to someone knowledgeable about a city can lead to a good restaurant. And it can also help expand business leads.”

“A consulting program based in Tucson, Certified Tourism Ambassadors, trains hospitality workers. Mickey Schaefer, the chief executive and founder, said she had developed the idea in 2006 while working for the American Academy of Family Physicians to plan its conventions. Hospitality workers sometimes did not know their own cities, leading to bad experiences, she said … The program, she said, ‘is more than just helping the customer. It is helping them find the richness of whatever they are interested in.’ She added that the program also instills civic pride.”

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Blind-Date Books: Novel Mysteries

The Wall Street Journal: “Booksellers across the country are enticing readers to take a chance on a surprise selected by store staff. To set up these ‘blind dates,’ the stores wrap the book to hide the cover and offer a few clues to give a sense of the hidden work’s genre and tone. ‘It’s been the most successful table we’ve ever put together,’ says Cari Quartuccio of the blind-date offerings at a location of Book Culture, where she is the store manager.”

“For customers, trusting the staff at their local store is part of the fun. The clues allow readers to select a gift for themselves. (And then, of course, immortalize unwrapping the mystery volume on Instagram.) At Book Culture, blind-date offerings are wrapped in brown paper and bear a note advising ‘Read me if you liked’ and a list of three books staff members think customers are likely to have read.”

“Book Culture’s Ms. Quartuccio says customers seldom are lukewarm about the notion of blind-date books. Fans often make repeat purchases, with some even buying stacks as gifts. Other customers are perplexed by the idea. Finally, she says, there are those ‘who get really upset when we won’t tell them the title of the book. Mystery isn’t for them, but they still want to take part in it’.”

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Nike Hears Adidas’ Footsteps

The Wall Street Journal: “With the retail sector in flux, Nike Inc. is looking for new ways to sell sneakers and shirts, but some industry watchers worry that the company’s efforts to broaden its reach could damage its cultural cachet … Frequent online releases of coveted Jordan shoes could make them less rare and not as much in demand anymore, some industry watchers say. By making certain shoes available only through Nike channels or big chains such as Foot Locker, the company is diminishing the mom-and-pop shops that have served as community stewards of cool.”

“Matt Halfhill, founder of sneaker-news site Nice Kicks, which chronicles new releases across major shoe brands … said he has been involved in sneaker culture since the 1990s, believes the push toward direct sales actually hurts Nike’s connection with consumers.” He comments: “It’s a great way to sell commoditized shoes, but most boutiques even discourage you from buying on the phone. They only sell shoes in stores to customers, where you see everyone in line waiting for shoes talking to each other,” he said.”

Meanwhile: “Adidas’s resurgence includes new ‘franchises’—such as the NMD and Kanye West’s Yeezy line—that have gained a youthful following and made inroads on Nike’s cultural dominance. Nick Santora, a former sneaker-store owner and editor of online sneaker magazine Classic Kicks, said Adidas is more on point with youth culture of late.” He comments: “Kanye, for some people, for certain kids, that brand is now acceptable. Nike was always ‘sports, sports, sports,’ but if you’re over 11 years old right now, musicians are where it’s at.”

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Hamburger Helpless: Packaged Goods Plight

The Wall Street Journal: “The plight of the packaged-goods companies is a classic business tale. An industry creates winning products, carves out strong market positions and enjoys reliable, sustained revenue—only to be too slow to adapt to changes that threaten those cash cows … Many big brands didn’t move fast enough to remove artificial ingredients and haven’t been able to shed the negative perception of processed food, said several food executives and others close to the industry.”

Meanwhile: “The web and social media gave smaller food companies a direct path to consumers’ hearts, minds and stomachs. They gained traction through blogs and Facebook with little marketing spending, selling food online via Amazon.com Inc. or their own websites long before they would have been able to get it in stores … Big brands can no longer control perceptions about food with television advertisements and shelf placement.”

“Kellogg Co., General Mills and others have directly invested in food startups through venture-capital funds that they say will give them insight as to how to respond better to evolving trends.”

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