Apple’s Insanely Great Idea? Stores.

Scott Galloway: “Apple made this crazy irrational decision 20 years ago to forward integrate into the medium that was supposedly going away. Stores. And they have somewhere between five and six billion dollars in store leases now on their balance sheet and have reallocated capital out of traditional broadcast media, which is declining every day in effectiveness, into the store where people still make physical contact if you will. They still consummate the relationship with the brand at the point of purchase.”

“So you have this temple to the brand which is this unbelievable experience called an Apple Store, and then you have this very mediocre experience called an AT&T or Verizon connect your phone experience for Samsung and the other Android players. The biggest value-creating decision in the history of modern decision: Apple’s crazy decision to forward integrate into stores.”

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Do Smartphones Make Us Stupid?

Nicolas Carr: “Imagine combining a mailbox, a newspaper, a TV, a radio, a photo album, a public library and a boisterous party attended by everyone you know, and then compressing them all into a single, small, radiant object. That is what a smartphone represents to us. No wonder we can’t take our minds off it.”

“A quarter-century ago, when we first started going online, we took it on faith that the web would make us smarter: More information would breed sharper thinking. We now know it isn’t that simple. The way a media device is designed and used exerts at least as much influence over our minds as does the information that the device unlocks.”

“Now that our phones have made it so easy to gather information online, our brains are likely offloading even more of the work of remembering to technology. If the only thing at stake were memories of trivial facts, that might not matter. But, as the pioneering psychologist and philosopher William James said in an 1892 lecture, ‘the art of remembering is the art of thinking’ … No matter how much information swirls around us, the less well-stocked our memory, the less we have to think with.”

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Lidl Effect: So Far, Not Much

The Wall Street Journal: “Since opening its first U.S. store in June, Lidl, the German grocery giant, hasn’t exactly upset the American grocery cart … When Lidl’s first nine U.S. stores opened June 15 in Virginia and the Carolinas, they lured customers away from other grocers, according to an analysis by inMarket, a location-based data firm. But Lidl hasn’t been able to sustain that level of traffic, and grocers including Kroger Co. and Wal-Mart have recovered much of their lost market share, according to inMarket.”

“The timing of Lidl’s U.S. arrival wasn’t ideal. It opened its first stores the day before Amazon.com Inc. surprised the industry by announcing it would buy Whole Foods Market. Supermarkets responded, slashing prices to keep up with growing competition on many fronts while investing in online ordering and delivery. Lidl doesn’t currently have an online grocery-shopping operation in the U.S.”

“Missteps in store location and merchandise have hurt Lidl’s U.S. rollout, consumer analysts say … Other analysts said Lidl stores give prominent display to items that seem geared toward Europeans, whether it is $39.99 cycling shoes or $15.99 badminton sets. Some stores’ produce sections have run low on conventional items while stocking big organic offerings, and in some stores emphasis on wine hasn’t squared with local tastes focused on beer.”

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Walmart Shoppers & Drive-Thru Culture

The New York Times: “A personal shopper is something you might expect at Bergdorf Goodman or a boutique on Madison Avenue. Not at the Walmart on Route 42 in Turnersville, N.J. But that’s where you will find Joann Joseph and a team of Walmart workers each day, filling up shopping carts with boxes of Honeycomb cereal, Cheez-Its and salted peanuts. The customers select their groceries online, and then the shoppers pick the items off the store shelves and deliver them to people when they arrive in the parking lot. Customers never have to step inside the store.”

“Walmart, which is one of the largest food retailers in the United States, sees grocery pickup as a way to marry its e-commerce business with its gigantic network of stores — a goal that has eluded many other retailers. The company started ramping up the service two years ago, and it is now available in about 1,000 of Walmart’s 4,699 stores across the country … Walmart is betting big on the millions of Americans in suburban and rural areas who drive everywhere. The company is trying to make ordering groceries online and then picking them up in your car as seamless as a fast-food drive-through.”

“Walmart is also showering grocery pickup customers with perks — Easter eggs hidden in grocery bags, a “beauty box” for moms at Mother’s Day, dog biscuits and discounts for recruiting new customers. It’s unclear how the company will be able maintain this kind of dedicated service if a store is inundated with pickup orders, which in many stores are free of charge and require an order of $30 or more. Walmart said it had hired thousands of workers to staff the new service across its many stores.”

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Beer Yourself: Self-Serve Suds

The Wall Street Journal: “When customers make their way to the Williamsburg location of Randolph Beer, a brew-centric bar, they will find an impressive 24 choices on draft, from pale ales to stouts to a seasonal Oktoberfest offering. But if they want to do any drinking at the Brooklyn spot, they will have to work the taps themselves sans bartender. As a sign says, ‘Beer Yourself.’The self-serve aspect is actually a selling point for craft-beer buffs. They say they appreciate not only the sheer novelty of it, but also that they can sample new and unusual brews without having to commit to a full pint.”

“The beer is priced by the ounce, from 50 cents for some of Randolph’s house-made brews to slightly above $3 for extremely hard-to-find varieties. Customers are given a ‘beer ATM card,’ as it has sometimes been described, that records all their pours.” A happy customer comments: “You can try a dozen different beers in a night and only spend $30. It’s amazing.”

Self-serve “can bring down costs—not only in terms of needing fewer bartenders, but also in terms of eliminating waste. In most drinking spots, it is a given that bartenders will ‘overpour, either by accident or because they offer customers the occasional freebie.” Yet, not everybody loves the idea: “At some bars, the interaction between customers and bartender is just as important as the drinking itself.” Jeff Isaacson of Ark Restaurants explains: “When you’re getting your own beer and not talking to anybody, you might as well stay home.”

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Maximalism: Ugly Design vs. Minimalism

The New York Times: “If you have read a design magazine or, really, ever been inside a house with a subscription to one, you will be familiar with the words: midcentury, modern, minimalist, Scandinavian … Ksenia Shestakovskaia, for one, finds it all unbearably boring. She was working as a textile designer in Berlin when she came to see that simplicity and marketability had overtaken creativity … So she left her job and started spending time on eBay, browsing furniture listings and collecting images of her favorite pieces. Some may call it killing time; Ms. Shestakovskaia thinks of it as research.”

“Her findings first surfaced on her Instagram account, @decorhardcore, a stream of furnishings that could be described as ’80s glam meets ’90s kitsch meets grandma’s tchotchke cabinet.” Jonas Nyffenegger, 30, “and his friend Sébastien Mathys, 31, created Ugly Design, a collection of found images that form a counterargument to minimalism, as well as everything you might learn in graduate school. Their interests extend into fashion, and recent posts on Instagram include ripped jeans patched with raw-meat-printed fabric, and a toilet that also happens to be a giant high-heeled shoe.”

“Ms. Shestakovskaia disagrees with the idea that maximalism’s appeal comes from its inherent ugliness.” She comments: “I struggle with ugly and horrendous and heinous, but strange is really good.”

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How Whole Foods Steals Walmart Shoppers

Business Insider: “When Amazon’s acquisition of Whole Foods formally went through in August, the e-commerce giant immediately made some changes — most notably, significant price cuts … The biggest source of foot traffic for Whole Foods were regular Walmart shoppers. People who visited Walmart at least twice a month accounted for 24% of new Whole Foods customers the week of the price cuts.”

“Across the board, the customers who defected to Whole Foods from grocery rivals were wealthier than the retailers’ average shopper … Walmart’s regular customers’ average income is $59,264, according to Thasos data; the average income of a regular Walmart customer that is defecting to Whole Foods, however, is $71,697 … While Walmart has aimed for more aspirational customers as Whole Foods cuts prices, Thasos data proves that both retailers are competing for the same shopper: the upper-middle class customer who is increasingly important as wages stagnate for much of the US.”

“All of this means that wealthier shoppers are increasingly influential, forcing bargain-centric retailers like Walmart to expand into more aspirational brands … Walmart is gearing up to cash in on wealthier customers, especially as it expands its e-commerce lines. Whole Foods winning over high-income customers could force Walmart on the offensive in this battle — one that both retailers are determined to win.”

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Slowball: Is ‘Big Data’ Wrecking Baseball?

The Wall Street Journal: “Baseball has never been more beset by inaction. Games this season saw an average gap of 3 minutes, 48 seconds between balls in play, an all-time high … A confluence of hitting, pitching and defensive strategies spawned by the league’s ‘Moneyball’ revolution have all played a role. That makes baseball, whose early use of big-data strategies was embraced by the business world in general, a case study in its unintended consequences.”

For example: “Statistics showing precisely when starting pitchers become less effective have prompted teams to remove them from games earlier than before. That has increased one of the biggest drags on pace of play: pitching changes. Regular-season games this year saw an average of 8.4 pitchers used between both teams, an all-time high. That’s up from 5.8 pitchers a game 30 years ago.”

“Radar and camera measurements of the angle at which balls leave the bat have shown that the optimal swing angle looks more like an uppercut than many hitters preferred. Hitters, in turn, have started swinging for the fences in droves. Home runs this season reached a record level. That all-or-nothing approach means that between each home run there is a lot of standing around and waiting. Some classic displays of athleticism—a daring attempt by a runner to advance more than one base on a teammate’s hit, for instance—have become rarer.”

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Ypperlig: IKEA’s ‘Excellent’ Adventure

Quartz: “IKEA’s new collaboration with Danish product designers HAY is intended to ‘challenge people’s perception of IKEA quality and design.’ Ypperlig (Swedish for ‘excellent’ ) debuts as IKEA’s newest and most collectible furniture line … The 15-year old furniture design brand is among the leading players in the modern Scandinavian design scene—their Copenhagen showroom is a regular stop in design tours of the city.”

“Design connoisseurs swooned over the handsome Ypperlig injection moulded chairs and coveted the stylish color update to IKEA’s iconic Frakta shopping bag.”

IKEA spokesperson Johanna Martin comments: “We believe in making products that our customers want to keep and live with for a long time, regardless if it’s a product made in collaboration with someone or part of our ordinary range. But there is also an emotional connection which is important when making things sustainable. If you like the product you will keep the product longer.”

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