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.”


Speaking Geek: The Rise of Nerds & Brands

The Economist: “Today there are more reasons than ever to treat nerds with respect: never mind the fact that every company is clamouring to hire them, geeks are starting to shape markets for new products and services … From personal computers to social-media companies like Twitter and Facebook, many gadgets and platforms started out with curious tech enthusiasts experimenting in their garage or dorm room, only to turn into mainstream hits.”

“But nerds’ influence now goes well beyond technology. They hold greater cultural sway. ‘Silicon Valley’, a show on HBO which will soon start filming its fourth season, presents the “brogrammer” startup culture in all its grit and glory, and suggests that mass audiences are transfixed by what really happens behind closed (garage) doors … Each month at least 70m people play “League of Legends”, a complex multiplayer online game; that is more than play baseball, softball or tennis worldwide.”

“Incumbent businesses, too, have started to take their cue from all this nerdiness. Brands like Mountain Dew and Doritos have sponsored video-game competitions and ‘rodeos’ where competitors race drones around stadiums … But if they try too hard to speak geek, large companies will come off as inauthentic and alienating, exactly what they were trying not to be. Nerds may be a powerful commercial force, but many of them harbour disdain for big brands and overt marketing. Firms will have to try hard to send a cool, coded message.”


Mueller Chocolate: Gross Profits

The Washington Post: “It’s a Saturday afternoon at Philadelphia’s popular Reading Terminal Market … On a busy day like this, Mueller Chocolate might serve 800 customers … As crowds of shoppers move past the Mueller stall, some stop to point, stare and whisper: ‘Oh, my goodness, what is that?’ Well ‘that’ is a display of kidneys (with candy kidney stones), brains, livers, eyes, hands, feet (with almonds as toenails) and noses — all edible, all chocolate.”

“It started, Glenn Jr. recalls, one Valentine’s Day in the late 1990s, when his mother decided that ‘these heart-shaped boxes are stupid.’ She had a mold created based on a drawing of a human heart in her son-in-law’s medical school textbook … When the chocolate heart made national news, orders came in from around he world, he said, and demand hasn’t slowed down.”

“The sweet stuff takes hundreds of forms at the Mueller stall, none more infamous than the chocolate-covered raw onion. It was created in 1983, when the creator of a local children’s television show, ‘Double Muppet Hold the Onions,’ asked the Muellers to make a chocolate-covered onion for Kermit to present to Miss Piggy.” Glenn Meuller Jr. explains: “The chocolate onion . . . is hideous, but we’ve been doing it for 30 years. It changed our trajectory.”


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.”


Cadillac House: Not Your Father’s Dealership

The Verge: “The next stage in transforming Cadillac is to bring its 925 dealers up to snuff. That’s where the Cadillac House comes into play, a chic public space where anyone can drop by and steep in the brand’s past, present, and future. Each detail of the facility has been carefully considered — it sells Joe Coffee (a local favorite), offers free Wi-Fi, stages art installations … it hosted a block party bash featuring a short set by My Morning Jacket. The Cadillac House has a few cars on view, but it’s not a car dealership. Discreet product specialists are trained to answer questions about features on new models like the CT6.”

Cadillac president Johan de Nysschen comments: “Our office, the Cadillac House, this is what our dealer experience should be like. Our focus here must be on increasing the overall quality of the business. It must be about increasing transaction prices. It must be about brand positioning and upgrading quality of the dealer and doing so in a way that we continue to build the relationship between Cadillac the manufacturer and our dealer network. We have to navigate a very difficult path.”

He adds: “It’s really those small dealers that we want to turn into powerhouses. We want to create a boutique experience, separate from the rest of the GM brand, and we want to help our dealers.”


Intelligent X: Robo-Beer on Tap

Alphr: “IntelligentX’s AI might not actually drink beer, but it is learning how to brew it thanks to machine-learning algorithms.It works like this: IntelligentX has made four different types of beer. People that drink the beer give their feedback to a bot on Facebook Messenger. The company’s algorithm – called Automated Brewing Intelligence (ABI) – uses a mix of reinforcement learning and Bayesian optimisation to tell a human brewer how to push a beer’s recipe in one direction or another.”

“To stop things ending up in a tepid middle ground of taste, ABI is being fitted with ‘wildcard’ ingredients such as certain fruits … IntelligentX insists its method allows brewers to respond to customers’ changing tastes faster than ever before … There does, however, seem to be a fundamental incongruence between the fetishisation of traditional, local brewing at the heart of the current vogue for craft beer, and the impersonal use of an AI to crowdsource the most popular tastes. Then again, if the beer’s good, who cares?”


Edge Strategy: The Antidote to Disruption?

The Economist: “Companies often search for ways to disrupt their industries lest a rival or new entrant does the same and pulls the rug from beneath them … Sometimes being cautious, incremental and pragmatic when others are gambling on bold and visionary thinking is more sensible … That is the argument of ‘Edge Strategy,’ a new book by Alan Lewis and Dan McKone … They argue that before turning themselves upside down firms should think harder about profiting from the “edges” of existing businesses.”

“The authors focus on three such edges. The first is products: how can you stretch merchandise so that it generates more income or appeals to more people? An obvious way is to make accessories … The second edge is the ‘customer journey.’ This sounds nebulous but is, in fact, simple. Customers usually buy goods and services to solve a problem … The authors argue that firms have lots of opportunities to make money if they walk in customers’ shoes and keep their eyes open.”

“The third edge is exploiting underused parts of the enterprise. One example would be farmers renting out marginal land to energy companies for wind turbines: the farmer stays in the business of agriculture but also boosts income by finding a new use for some of his acres … The authors say that firms risk forgetting about long-established sources of growth in the pursuit of disruption. Rather than obsessing about the new, firms need to make the most of their existing businesses … their priority should be squeezing more money out of their existing assets, not taking a leap into the unknown.”


Asking ‘Why’ Sparks Innovation

The New York Times: “Asking questions can help spark the innovative ideas that many companies hunger for these days … Business breakthroughs — including the invention of the Polaroid instant camera and the Nest thermostat and the genesis of start-ups like Netflix, Square and Airbnb — in each case, some curious soul looked at a current problem and asked insightful questions about why that problem existed and how it might be tackled.”

“Getting employees to ask more questions is the easy part; getting management to respond well to those questions can be harder … For questioning to thrive in a company, management must find ways to reward the behavior — if only by acknowledging the good questions that have been asked … Leaders can also encourage companywide questioning by being more curious and inquisitive themselves. This is not necessarily easy for senior executives, who are used to being the ones with the answers.”

“They could set a better example by asking ‘why’ and ‘what if’ — while asking others to do likewise. And as the questions proliferate, some good answers are likely to follow.”


Made By Cow: Introducing Cold-Pressure Milk

Gizmag: “Made by Cow (MBC) says its alternative cold-pressure approach is a world first, with the milk going from cow to bottle within a matter of hours. The company explains that it is then put under intense ‘isostatic cold water pressure.’ Here, cold water is used to compress both the bottle, which is plastic so as to flex, and the milk inside … MBC reports that ‘bacteria can’t withstand the pressure we subject them to’ and so are eliminated, while the cold temperature of the water reportedly ensures that the process is gentler on the milk’s nutritional profile.”

“MBC claims that the resulting produce is creamier and more vitamin-rich than conventionally processed milk and that it will actually last slightly longer, too, though specifics are not yet available.”


PS: Ikea Beyond The Basics

Fast Company: “Every few years, Ikea releases its limited-edition PS Collection—a series of experimental products that aren’t intended to supplant its perennial offerings, but rather to add a jolt of energy into its stores … For its 2017 PS Collection, Ikea’s designers chose a theme they call Young Urban Life, delving into new material research, fabrication techniques, and product types.”

“Some of the more idiosyncratic products include a seating piece that looks like the love child of a Papasan chair and a rocker, a sofa that looks like it’s composed of pillows, and a throw blanket that can be worn like a jacket … For the practicality-minded set, there are still a few space-efficient pieces, like stackable storage bins, collapsible side tables that fold away when not in use, and arm chairs that join to become a love seat.”

Henrik Most Nielsen of Ikea: “Ikea is for the many, but the many are different. We’re trying to attract customers who think Ikea isn’t at the front of design. We’re moving from basics to embodying a strong personality and style.”