Airbnb ‘Keeps it 100’ for Hotels

Quartz: “Here is a very bad piece of news for hotels: Airbnb is hurting them on their most profitable nights. That’s per a recent report from UBS, which found that Airbnb is making it harder for hotels to charge through-the-roof rates on “compression nights”—i.e., nights where more than 95% of rooms are occupied. Hotels think about compression nights as a simple matter of supply and demand. When demand shoots up, usually because of a local event like a marathon or fashion show, hotels can raise their rates. Customers who wind up paying those rates often consider it price gouging.”

“Hotels have worried about Airbnb’s impact on their sold-out nights before. In July 2015, Pebblebrook Hotel Trust CEO Jon Bortz admitted during an earnings call that Airbnb was limiting what the company could charge for rooms during ‘leisure-driven’ conventions and events.”

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Home Depot: Retail ‘Oasis’ Against Amazon

The Wall Street Journal: “Do-it-yourself chains Home Depot Inc. and Lowe’s Cos. appear to have built a retail oasis mostly walled off from the reach of online behemoth Amazon.com … Executives from the home improvement chains cite a litany of favorable housing trends for their good fortunes. New households are being formed and housing turnover remains steady. Millennials are even willing to buy homes … All that spurs trips to large chains to pick out appliances and paint colors, and plan projects around the home.”

“But the e-commerce giant doesn’t have a toehold in large parts of the home improvement space, like lumber, paint and gardening supplies. Home Depot says just 25% of its business—smaller, easy-to-ship items like power drills and small hand tools—faces tough online competition.”

“That doesn’t mean either chain is immune to Amazon. A UBS survey in June found that 11% of consumers planning a home improvement project themselves planned to buy something from Amazon. That is far behind the 36% who said they planned to shop at Home Depot and the 21% at Lowe’s, but up from just 7% a few months back.”

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Combrr: Like Uber for Beach Eats

The New York Times: “It’s called Combrr, and it will soon allow people to buy items from concession stands from their towels, avoiding lines that lately stretch clear across the (Rockaway Beach) boardwalk.”

“Combrr works a lot like Uber: Customers drop a pin at their location. Vendors can accept or decline an order, and customers can track its progress from the app. There’s a $5 delivery fee, and the entire transaction, including the tip, is done digitally, bypassing the city’s requirement for a permit to sell items on the beach. But in addition to geolocation technology, Combrr relies on customers’ selfies and instructions. A sample note: ‘We’re wearing pink bikinis sitting under a polka-dot umbrella on 99th’.”

“The Rockaway Beach concessions, which appeared in their present artisanal incarnation in 2011, have been credited with turning the beaches into culinary hubs. So far, the seaside food scene has remained charmingly low-tech — operating out of sandy-floored bunkers and brightly painted shanties with surfboard racks … Combrr, which is free, will be available not long before the concessions close, a week after Labor Day.”

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Jet vs. Jetsons: Amazon Bets on Drones

Farhad Manjoo: “If Amazon’s drone program succeeds (and Amazon says it is well on track), it could fundamentally alter the company’s cost structure. A decade from now, drones would reduce the unit cost of each Amazon delivery by about half, analysts at Deutsche Bank projected in a recent research report. If that happens, the economic threat to competitors would be punishing — ‘retail stores would cease to exist,’ Deutsche’s analysts suggested, and we would live in a world more like that of ‘The Jetsons’ than our own.”

“Amazon … has built many different kinds of prototypes for different delivery circumstances … for instance, drones could deliver packages to smart lockers positioned on rooftops … Amazon’s patent filings hint at even more fanciful possibilities — drones could ferry packages between tiny depots housed on light poles, for example.”

“Amazon has filed patents that envision using trucks as mobile shipping warehouses … a drone might fly from the truck to a customer’s house, delivering the item in minutes … according to Amazon, the earliest incarnation of drone deliveries will happen … within five years, somewhere in the world.”

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Game Changer: In-App Purchases

The Wall Street Journal: “In-app purchases are ‘dramatically changing the mobile-entertainment landscape,’ said Andrew Phelps, director of digital media at Rochester Institute of Technology. They ‘engage people in a longer financial discourse than you would have in an upfront sale’ … The secret sauce behind many in-app purchases is the countdown clock—a frustration tax that forces gamers to idle before they can perform duties such as farming crops or replenishing fuel, unless they pay for more turns or items to speed up the action.”

“Converting players into spenders without turning them off is key; gamers have derided free-to-play games as ‘free to play, pay to win’ for years. Developers, though, have gotten savvier about giving players more free things to do to keep them hooked until they start spending. In ‘Pokémon Go,’ players can go weeks capturing dozens of ‘pocket monsters’ without needing to spend money. After investing so much time, players might be more inclined to dole out cash to upgrade their gear so they can carry more items and creatures, for example.”

“Algorithms are playing an increasing part in nudging players to spend. Based on dozens of data points—how often gamers play, what model mobile device they use, location and gender—developers might raise a game’s difficulty level, making no two players’ experiences exactly alike … Data on players’ behavior also are used to strategically tweak prices for virtual goods in real time … Other tactics: tapping into players’ “fear of missing out” through limited-time events, and cultivating relationships between players.”

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Dollar Shave & The Digitally Native Vertical Brand

The New York Times: “The same forces that drove Dollar Shave’s rise are altering a wide variety of consumer product categories. Together, they add up to something huge — a new slate of companies that are exploring novel ways of making and marketing some of the most lucrative products we buy today. These firms have become so common that they have acquired a jargony label: the digitally native vertical brand.”

“By cutting out the inefficiencies of retail space and the marketing expense of TV, the new companies can offer better products at lower prices. We will get a wider range of products — if companies don’t have to market a single brand to everyone on TV, they can create a variety of items aimed at blocs of consumers who were previously left behind. And because these companies were born online, where reputations live and die on word of mouth, they are likely to offer friendlier, more responsive customer service than their faceless offline counterparts.”

“It’s striking how few of these online companies could have taken off in the presocial age. At the very least, they would have been sunk by the inability to target ads to the demographics they’re aiming to serve.”

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Zappos: A Short Story About a Long Call

Business Insider: “A Zappos employee recently had a customer service call that lasted 10 hours and 43 minutes, breaking an internal record at the Amazon-owned online retailer … Steven Weinstein answered a call from a customer who needed some help with an order of a few items. The two began to chat, and even after she was helped, she stayed on the line.”

“Weinstein said he only took one break during the nearly 11-hour period, about two-and-a-half hours on, to go to the bathroom. One of his colleagues brought him food and water during the call.”

“At Zappos, call center employees are trained to use interactions with customers as a way to build relationships, not make a sale. And if a call is going long during a particularly busy time, then it’s up to the employee overseeing the call center to assign more people to calls rather than encourage an employee to end a call early. The last longest customer service call was set by Mary Tennant in 2012, at nine hours and 37 minutes.”

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Spotify Pinpoints With Some Privacy

Christian Science Monitor: “Spotify announced this week that it is opening up user data collected from its 70 million free subscribers for programmatic, automated advertising.” However: “Spotify has not said that it will share the unique identities of users with advertisers. Instead, the shared data is limited to information like listeners’ age, gender, location, music preferences, and some behavioral habits.”

“This information will enable advertisers to pinpoint specific demographics for their ads on Spotify. Buyers will bid on ad spaces in real time– a trail-blazing step in the digital advertising world, and an example of the many ways digital companies wield the massive amounts of data that they have at their fingertips.”

“Essentially, advertisers can pinpoint users’ characteristics within Spotify, but will not follow them off the platform … So while the streaming site’s new arrangement doesn’t mean that listeners will be hearing an audio ad for a pair of sneakers that they just browsed online, Spotify users will certainly be able learn more about how they are viewed as a market demographic – assuming they don’t mute their ads.”

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Michaels: The Art & Craft of The Retail Experience

“We’re not Apple. We don’t make the new iPhone that people will line up in advance for. We need products that people want in an environment they want to shop in,” says Chuck Rubin, CEO of Michaels, in Forbes.

“Michaels is one of the most surprising retail successes of recent years. It has stuck to transforming its brick-and-mortar stores while almost completely ignoring e-commerce … While the company’s core hasn’t changed–it sells cheap craft supplies–Rubin has modified its stores to make it easier for novice crafters to find items. They’re bringing in more of those types of customers by moving beyond sewing-room basics, adding cooler items, like those coloring books, and Michaels-exclusive products, such as Isaac Mizrahi-branded yarn.”

“The most striking part of Michaels’ success is how it contradicts the digital era’s implied mandate for retailers–that survival hinges on selling online. But Michaels hasn’t wasted millions competing with Amazon.com on e-commerce. It’s grown while focusing squarely on improving what’s within its stores’ four walls … The Web remains a no-man’s-land for Michaels … Rubin knows all that stands between Michaels and Bezos is the in-store experience.”

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Direct Disruption: The Tide Wash Club

The Wall Street Journal: “Blindsided by the success of the upstart Dollar Shave Club, an online subscription service that chipped away at the dominance of Gillette razors, P&G executives say they are focusing not only on what consumers buy but on how they buy … P&G is experimenting with … the Tide Wash Club, an online subscription service for the dissolvable Tide Pods capsules that are the company’s highest-priced laundry detergent. The company offers free shipping at regular intervals.”

“Another new offering: Tide Spin, an undertaking P&G is calling the ‘uberization of laundry,’ in which customers in parts of Chicago can use a smartphone app to order laundry pickup and delivery from Tide-branded couriers. With the ventures, P&G is delving deeper into the business of connecting consumers directly with the products it makes, especially a new generation less loyal to the company’s big brands.”

“Privately, P&G executives acknowledge the company was caught off guard by the success of Dollar Shave Club, which started in 2011 and says it now has 3.2 million subscribers. ‘It was probably on the radar but we weren’t necessarily having the right conversation around what might disrupt us,’ said a person familiar with the company’s thinking.”

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