Costco Knockoffs: It’s Cruel to Be KIND

The Wall Street Journal: “Kirkland Signature, Costco’s store brand, is challenging manufacturers hoping to earn or retain a coveted spot at the warehouse retailer. Since 1995, Costco has used its Kirkland products to attract shoppers, building a reputation for quality and low prices on milk, toilet paper, men’s shirts and golf balls bearing the unassuming red logo. About a quarter of Costco’s $118.7 billion in annual sales come from Kirkland Signature products, and the percentage is growing, company executives say.”

“Costco often introduces a new Kirkland product when its buyers or executives believe a brand isn’t selling at the lowest possible price.” For example: “Kind Bars sold for about $18 for a pack of 18 … When almond prices dropped in 2016 … Costco developed the Kirkland Signature Nut Bars, made by Leclerc Foods USA, which is owned by Leclerc Group, a Canadian manufacturer, and now sells a 30-pack for $17 in stores.”

“Kind Bars are still carried at Costco, though mostly new varieties, including fruit bars, mini nut bars and a peanut-free bar. ‘We look forward to continuing to grow with them,’ a Kind spokeswoman said.”

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Perennial Seller: Make Connections, Not News

The Wall Street Journal: In Perennial Seller, Ryan Holiday “emphasizes the value of low prices and word of mouth over press coverage. Raymond Chandler, he writes, became the ‘quintessential detective author’ because he encouraged his publishers to sell his books as pulp paperbacks, for 25 cents a copy. Suddenly his books went from selling a few thousand copies in bookstores to hundreds of thousands in gas stations, train stations and cigar stores. Humphrey Bogart as Philip Marlowe followed.”

“Likewise, the comedian Drew Carey’s long run on network television began with an invitation from Johnny Carson to appear on “The Tonight Show.” Validation by one person whose opinion is valued, Mr. Holiday argues, is worth all the press coverage in the world.”

“Iron Maiden has never relied on hit singles or frequent radio play, since its songs often run to 10 minutes, with solos from each of its three guitarists. Instead, the band has toured almost nonstop, building close connections with thousands of fans who now buy almost anything it puts out, from albums to beer to belt buckles. Its core of hard-core fans, Mr. Holiday writes, has allowed Iron Maiden to ‘endure through fads, technological shifts, and the fact that their music was never mainstream’.”

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Eataly Regulars: Try Some & Buy Some

The New York Times: “Eataly NYC Flatiron, which opened in August 2010, has become a popular attraction for tourists. They pack the 50,000 square-foot Italian food emporium, cameras in hand, to buy Italian imports and dine at its several restaurants. But in the produce section, there’s nary a tourist in sight. This is where regulars … stock up on their fruits and vegetables. Produce is delivered and restocked twice daily. Some of it, like blood oranges, Italian frisée and radicchio di Castelfranco (a red-streaked, bitter yellow leafy vegetable) is shipped in from Italy while the rest is from around the United States and nearby farms.”

“On the hunt for fresh baby corn or purple baby cauliflower? They’re here. So are about 17 kinds of mushrooms, including lobster and blue foot, and all sorts of radishes like Easter egg and Cincinnati. The staff of 14 is well-versed on the produce, and tasting is encouraged.” Produce manager Lenny Espinal comments: “I’m a big believer in the try-before-you-buy philosophy. If you don’t like it, you won’t waste your money buying it.”

“One of the department’s most interesting features may be the vegetable butcher, Nicole Williams, who stands at a counter with a sink at Eataly’s vegetarian restaurant, Le Verdure. She washes and chops customers’ fruits, herbs and vegetables for free. She also prepares samples. Recent offerings included watermelon chunks and jicama rounds dressed with olive oil, salt and lemon.”

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Academy Sports: First-Responder Retailer

The Wall Street Journal: “A sporting-goods retailer found itself at the center of the rescue effort in flooded Houston, first opening its stores to rescuers in need of boats, life preservers and other supplies, and then converting its headquarters into temporary residences for hundreds of police and other emergency responders. As of Wednesday morning, retail chain Academy Sports + Outdoors was hosting more than 400 rescue-team members at its corporate campus west of Houston, with people coming to work in 12-hour shifts from as close as Waco, Texas, and as far away as Connecticut.”

“Academy has a history of contact with law enforcement because it sells firearms in its chain of 235 sporting-goods stores. Dealing with the Federal Bureau of Investigation and other federal agencies is a daily part of its business. So when the first call came in Sunday from the Houston Police Department requesting flat-bottomed jon boats and paddles, Academy brass weren’t all that surprised. But the calls kept coming … they wanted kayaks, canoes, ponchos and pontoon boats. In many cases, Academy opened the doors of closed stores so first responders could grab what they needed.”

“As waterlogged evacuees made it to dry land, they needed more. Sleeping bags, air beds, backpacks, fresh T-shirts, socks, shoes and underwear. Rescuers needed all those goods, too, and a safe, dry place to rest. So Academy opened up its four-story sport-themed headquarters, which hasn’t flooded and still has power. It also has gyms for sleeping and places to shower … Academy is offering financial assistance for immediate needs like hotels for about 150 employees … (and) is deciding where to donate $1 million worth of clothes and shoes later this week.”

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Brands Go Local To Beat Amazon

The Wall Street Journal: “As Amazon.com Inc.tightens its grip on retail sales, a growing number of brands are pushing back by championing local retailers. Some manufacturers are enforcing minimum advertised prices to make it harder for online sellers to undercut local merchants, while others give local stores first dibs on new products or funnel customers from their own websites to local outlets.” For example: “Luxottica Group SpA last year launched a minimum advertised pricing program that restricts the price at which its Ray-Ban and Oakley sunglasses can be advertised … The average discount on Ray-Ban sunglasses on Amazon has shrunk to about 3% as of this month from 37% in April 2016, according to Luxottica.”

“Free stroller tuneups are one way UPPAbaby, a Hingham, Mass.-based maker of baby strollers and car seats, draws customers back to local retailers carrying its products after they buy one of its strollers, which cost up to $900 … Running gear maker Brooks is testing a new app that uses an iPad connected to a treadmill to help local retailers determine which Brooks shoe best suits a runner’s biomechanics … Orb has a program designed to encourage local retailers to try out new products without worrying they might be saddled with excess inventory. At the end of each quarter, local stores can donate slow-selling items to a favorite charity. Orb then replaces the donated goods with new items selected by the retailer at no extra charge.”

“Arc’teryx salespeople use e-commerce sales data to help merchants determine which styles of clothing, shoes and backpacks are best sellers in their local market … If Simms Fishing Products had its way, the company’s waders and other fishing gear would never show up on Amazon’s website. The Bozeman, Mont., company doesn’t sell directly to Amazon, and its dealer policy specifically prohibits sales on third-party platforms … Simms employees visit local independent retailers and use computer-assisted design software to create customized Simms shops within each store.”

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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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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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Kronkiwongi: How Lego Fans Fandom

Fast Company: “In a presentation at the Cannes Lions Festival of Creativity on Sunday, Lego’s senior global director of social media and video Lars Silberbauer, broke down how the brand built and approaches that strategy … The two pillars of the brand’s social strategy are based on two core human social needs: the need to play and build together, and the pride of creation … By facilitating, supporting, and promoting the efforts of its fans, Lego amplifies their passion to a global audience, further fanning the flames of fandom everywhere it goes.”

“Silberbauer outlined three examples of how they do this. The first is through a competition called First Lego League, a Lego robotics competition that’s not run by the brand at all, in which up to 70,000 kids worldwide against each other in building Lego robots that can solve challenges. Second was the crowdsourcing platform Lego Ideas, where the brand invites people to propose and build new Lego sets. Like a branded version of Kickstarter, aspiring Lego designers have to get 10,000 supporters for their projects in order to be considered.”

“The third example was the Kronkiwongi Project.” Silberbauer explains: “The insight behind it is that 98% of us were creative geniuses at age three, but the challenge is that only 2% of us retain that level of creativity. With this project, we wanted to reveal and celebrate, not that we get less creative, but the amazing openness and creativity that kids have. So we asked kids from all over the world to tell us what a Kronkiwongi is and to build one for us.”

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Google Eyes: Watch While You Shop

The Washington Post: “Google executives say they are using complex, patent-pending mathematical formulas to protect the privacy of consumers when they match a Google user with a shopper who makes a purchase in a brick-and-mortar store. The mathematical formulas convert people’s names and other personal information into anonymous strings of numbers.”

“The formulas make it impossible for Google to know the identity of the real-world shoppers, and for the retailers to know the identities of Google’s users, Google executives said. The companies know only that a match has been made. In addition, Google does not get a detailed description of the individual transactions, just the amount spent.”

“Google would not say how merchants had obtained consent from consumers to pass along their credit card information. In the past, both Google and Facebook have obtained purchase data for a more limited set of consumers who participate in loyalty programs. Consumers that participate in loyalty programs are more heavily tracked by retailers, and often give consent to share their data with third parties as a condition of signing up. (Not all consumers may realize they have given such consent, according to the digital privacy advocacy group Electronic Frontier Foundation).”

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