Cereal Killer: ‘Product 19’ Flakes Out

Slate: “When you hear the name Product 19, you’ll either flash on an experimental invention from some corporate R&D department, or, if you’re one of its fans, you might think of the health cereal, rare in the aisles of American supermarkets yet loved all the same … While most people these days seemed to barely know of its existence, Product 19 died—a slow, oaty, fade to black, leaving devoted fans desperate.”

“For nearly 50 years, it was simply an answer to a business problem, first released in 1967 as Kellogg’s answer to General Mills’ Total, which had hit the market six years prior … Kellogg’s needed something to compete with this healthy new blockbuster, so they began attempting to develop a vitamin cereal of their own, eventually settling on Product 19 … The cereal was made up of flakes made from a combination of lightly sweetened corn, wheat, oats, and rice, and promoted itself as providing the full daily amounts of multivitamins and iron … The original box was so covered in charts and blocks of text, it truly looked more like some experimental substance than a breakfast cereal.”

“Product 19 never gained the household name recognition of competitors like Total, or even Special K, but the cereal did manage to hold on to a devoted fan base … But as sales of Product 19 began to slump, it began slowly disappearing from stores … Facebook groups like ‘Bring Back Kellogg’s Product 19’ began popping up around the same time … Then it stopped. Without much action on social media in the two years since Product 19 went into decline, Kellogg’s released a statement officially declaring that Product 19 had been discontinued.”

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Berlin Bookstores: Retail Beyond the ‘Amazone’

Deutsche Welle: “Visitors to Hundt, Hammer, Stein bookstore in Berlin’s central Mitte district are greeted by signs reading ‘you are leaving the Amazone’ and ‘leave your algorithm, browse offline,’ before descending stairs into a cozy book basement that features a finely curated selection of both German and English literature. Owner Kurt von Hammerstein says with some glee that the big chains that decimated indie booksellers in the 1990s are now struggling to compete with Amazon on mass market titles, forcing them to shut down outlets across Germany. This has left fertile ground for the innovative indie bookseller.”

“Opened in 2004, Hundt, Hammer, Stein is one of the oldest stores in its street, and survives in large part through customer loyalty, but also political awareness. Hammerstein says that ‘a very high critical mass” of concerned Berliners refuse to support sellers like Amazon that are perceived to underpay workers while dodging taxes’.”

“This loyalty should extend to authors, notes Maria-Christina Piwowarski, the manager of Ocelot, a vast book emporium cum cafe and reading lounge that opened in 2012. In February this year she wrote an infamous online ‘rant,’ as she calls it, about authors who link their works to Amazon rather than the bookstores who actually promote them. She also opined that by offering ‘personal recommendations’ and ‘direct conversations with customers,’ that authentic booksellers should not view Amazon’s ‘uninspired algorithms’ as true competition.”

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Super Consumers: Learning From Big Brand Fans

The Economist: “Only a tenth of customers are super-consumers but they account for 30-70% of sales, an even greater share of profits and almost 100% of ‘customer insights,’ says a new book, Super-Consumers, written by Eddie Yoon of the Cambridge Group … These people are not defined simply by the amount of stuff they buy (though they tend to be heavy users), but by their attitude to the product … they regard the things that they consume as answers to powerful emotional needs.”

“Super-consumers exist in every imaginable consumer category, from the glamorous to the staggeringly mundane. There are people who wax lyrical about the serial numbers inside toilet rolls or who worship at the altar of Kraft’s Velveeta processed cheese, which they call ‘liquid gold.’ Often, Mr Yoon points out, companies treat super-consumers as weird obsessives to be dismissed or ignored. That is a mistake, for they can, when treated well, propel growth. As well as buying large quantities themselves, they infect their social circle with enthusiasm.”

“High-passion fans … can also reveal interesting patterns in consumer markets: Generac, a producer of standby generators, discovered that people who buy lots of their generators are also more likely to be enthusiastic consumers of fridges (they often have several stocked up with food), multivitamins and life insurance. These are customers, in other words, who wish to be prepared for all eventualities … Even super-consumers who are fixated on old or existing products … can provide companies with lots of valuable advice and insights on stuff that makes money. Analysing big data is all very well. But nothing beats hanging out with your biggest fans.”

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The Art of Retail: A New Media Canvas

The New York Times: “Art is playing a larger role in stores, as retailers do whatever they can to make shopping in person fun, inspiring and worth the time.” Peter Marino, a retail architect, comments: “Shopping can be stressful but the art uplifts and makes you smile. And when people go back to the hotel, it’s the art they discuss and remember.”

“The focus on art is part of the change in retail and the continuing move to digital transactions. ‘The product isn’t enough now, it’s the experience,’ said Rob Ronen, an owner of Material Good, a watch and jewelry store in SoHo … ‘Because if the shop is just about the product people go online’ … The jeweler Stephen Webster opened a store in London’s Mayfair neighborhood in May that has opposite the door a taxidermied swan in full flight, with wings outstretched, greeting his visitors.” He explains: “People ask questions about the swan, and it focuses people more on what is in store.”

“Art historically has a strong track record drawing people into stores. Take the Paris department store Bon Marché, which became the fashionable place to be in 1875 when it opened an art gallery … Carla Sozzani, founder of Milan’s 10 Corso Como concept store, which has blended fashion, design and books with art for 25 years, believes that displaying art slows the way people shop.” She comments: “Even the way people purchase changes because they think more about what they are buying so they buy things they really want, which creates a faithful clientele.”

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Robo-Shop: Not an Automatic Win

The Economist: “The idea is that a combination of smart gadgets and predictive data analytics could decide exactly what goods are delivered when, to which household. The most advanced version might resemble Spotify, a music-streaming service, but for stuff. This future is inching closer, thanks to initiatives from Amazon, lots of startup firms and also from big consumer companies such as Procter & Gamble.”

“Buying experiments so far fall into two categories. The first is exploratory. A service helps a shopper try new things, choosing products on his or her behalf … The second category of automated consumption is more functional. A service automates the purchase of an item that is bought frequently … If a shopper automates the delivery of a particular item, the theory is that he is likely to be more loyal.”

“But neither Amazon nor the big product brands should celebrate a new era of shopping just yet … One problem may be the e-commerce giant’s prices, which fluctuate often. Another report … found that far more British consumers would prefer a smart device that ordered the cheapest item in a category to one that summoned up the same brand each time. That suggests that automated shopping, as it expands, might make life harder for big brands, not prop them up.”

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How Wyndham Wins the Loyalty Game

The Wall Street Journal: “The top performer in a new comparison of hotel loyalty program payback is Wyndham Hotel Group, which revamped its Wyndham Rewards loyalty program 18 months ago to make it a lot more beneficial to travelers … average payback at Wyndham is nearly 14%. For every $100 you spend at Wyndham, Ramada, Days Inn, Wingate and other hotels, you can get back $13.60 worth of stays on points.”

“Wyndham … changed its program in 2015 to price every award room the same: 15,000 points. There are no capacity controls or blackout dates and you earn 10 points for every dollar spent, so points accumulate quickly. Wyndham says redemptions are up 90% since before the change and seven million people have joined the program since the 2015 relaunch, a 17% increase to 47.5 million members.”

“Wyndham says it is investing $100 million in the loyalty program, most of which is going to hotel owners to buy rooms for free stays. Since most hotels are franchised under a brand name but owned separately, hotel owners pay the chain a small percentage of room revenue to cover points given out, and then hotels that provide free rooms when points are redeemed get paid by the chain. In Wyndham’s case, the chain is subsidizing the cost of the free rooms for hotel owners.”

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British Airways: Beginning its Descent?

The Economist: “Back in the 1990s, British Airways, the nation’s flag-carrier, proclaimed itself to be ‘the world’s favourite airline’ in a long-running and hugely successful advertising campaign … Were British Airways to run the same campaign today, it would probably stir a mixture of derision abroad and embarrassment at home” amid “a relentless dilution of BA’s once-superior customer service and on-board product.”

“Despite notching up five consecutive years in the black, BA is getting even stingier … Without formally announcing any changes, the airline last month stopped providing two meals to Economy passengers on flights under eight-and-a-half hours. In lieu of a complimentary sandwich six hours after their first meal, travellers on the London to New York route are now presented with one—and only one … fun-sized chocolate bar.”

In addition (or subtraction): “bottled water, pretzels, cheese and biscuits will also be removed from Economy cabins … tuck boxes—trolleys filled with free snacks on long-haul flights—will be removed from Economy, while Club passengers will no longer receive a choice of their starter. Next month, the airline will reportedly stop providing free newspapers at the gate for inbound short-haul flights to London … Taken in isolation, these measures are tolerable if not popular. But BA should be careful; reputations are more difficult to win back than to lose.”

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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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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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Loyalty Cards Pivot: From Discounts to ‘Experience’

The New York Times: “Research … shows that while people say discounts are important, they also ‘overwhelmingly say they want special treatment and offers not available to others in a loyalty program’, says Emily Collins of Forrester Research. ‘They come for the perks, but they stay for the experience’ … Sephora’s rewards program offers free samples and tutorials to loyal customers. It has three tiers, and the top spenders are invited to free closed-door events like Beauty Before Brunch, where they receive makeup lessons, discounts and a goody bag.”

“The samples don’t cost much, but are of great value to customers who want the newest makeup and hair products … and store loyalists often share these discoveries on social media, which draws in more customers. And that’s a crucial part of the equation: making sure customers aren’t just loyal, but also loud. Brands rely on them to spread the word far and wide about great loyalty programs.”

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