The Grand Hotel in Kosovo: World’s Worst?

The New York Times: “The Grand Hotel in the Kosovar capital of Pristina is regularly reviled in internet reviews. Here’s a sample: ‘disgusting,’ ‘a ruin’ and ‘an absolute horror. Probably the worst I have ever been at.’ But the managers seem unfazed by the online abuse. They do not take web bookings and barely offer access to the internet; their hotel has no email account … even Kosovo’s president, Hashim Thaci, usually an eager booster of everything his country has to offer, struggles to find anything nice to say about it … ‘I don’t think it is the worst hotel in the world, but that is because the world is very big,’ the president said.”

“With 13 stories and three adjoining concrete blocks in a prime location, the hotel accommodates flocks of pigeons on the upper floors and has rented out its basement, once used as a prison by Serbian paramilitary thugs, to a health club. But it is otherwise deserted, a maze of dimly lit corridors that are littered with pigeon feathers, strung with cobwebs, lined with doors of dark wood and haunted by even darker memories of Kosovo’s past. Two floors have been reduced to rubble, the remnants of a remodeling program that ran out of money.”

Service is minimal to nonexistent, the marble lobby stinks of cigarette smoke and the green carpeting that covers most of the floors is stained and scarred. And then there are the cockroaches … The president, who has only bad memories of the hotel in the past and despairs at its current condition, harbors big plans for its future. ‘Perhaps we could build a Trump Tower there,’ Mr. Thaci suggested.”


Nordstrom Doubles Down on Bricks

The Wall Street Journal: “Many retailers, beset by online competition and shifting consumer tastes, are slashing costs and closing hundreds of stores. Nordstrom Inc. is doing the opposite … It is revamping some of its 122 department stores and spending more than $500 million to gain a toehold in Manhattan. It has snapped up e-commerce companies including flash-sale website HauteLook and subscription service Trunk Club. And it has launched new concepts, including a store in Los Angeles called Nordstrom Local that doesn’t stock any clothes. So far, those efforts have failed to pay off in rising profits.”

“Nordstrom says it is different from its peers. It has fewer locations than rivals, and most are in the nation’s top malls, which continue to draw shoppers … While other department stores are retrenching, Nordstrom has shown a willingness to take risks. It is jumping into the competitive New York City market with a men’s store opening in April followed by a women’s store next year … At a store in Irvine, Calif., Nordstrom recently completed a test of a showroom that carried samples of 19 brands such as Rag & Bone and Veronica Beard in every size and color; they could be tried on but had to be ordered online. For shoppers, it solved the problem of visiting a store only to find their size sold out.”

“Other changes meant to appeal to customers are smaller. In November, the company unlocked the fitting rooms in its department stores … Although theft has increased slightly since Nordstrom made the change, executives say, the retailer is sticking with the new policy. ‘Analysts don’t like it,’ Jamie Nordstrom said. ‘But I’m thinking about the next 50 years, not the next quarter’.”


Is Gucci Today’s Most Innovative Brand?

From a Wall Street Journal interview with Imran Amed, founder of Business of Fashion: “Without a doubt, the single most innovative brand of the moment is Gucci … Gucci has completely overhauled their e-commerce strategy and changed the way they communicate about the brand. They’ve embraced new channels like Instagram but also done beautiful events and interesting advertising campaigns.”

“They’re not doing any discounting on their main runway collection … We’ve kind of trained the consumer to wait for things to go on sale. Gucci’s stopped that. Fifty percent of their customers are millennials. Millennials are the drivers of success for the fashion industry now. Without engaging them, you can’t really operate a successful business today. Gucci has found ways of engaging with that consumer.”


Hot Chocolate: Lap Up Luxury

The Wall Street Journal: “Gotham Bar and Grill is celebrated for its fancy fare, from foie gras to Dover sole. Starting this weekend, the Michelin-starred restaurant will spotlight a childhood treat: hot chocolate. The Manhattan restaurant will offer a $14 cup of steaming cocoa made with a chocolate sourced from Costa Rica … Dozens of restaurants, bakeries and chocolate shops throughout New York City are offering gourmet versions of hot chocolate. And they say they are seeing strong demand.”

“At Tetsu, the new Tribeca restaurant from sushi chef Masa Takayama of Masa fame, the $8 hot chocolate is flavored with a spices, including cardamom, cloves and star anise, and topped with a ‘toasted rice’ whipped cream. Customers can add a shot of exotic booze—chili-pepper liqueur, anyone?—for $4-$6.”

“By most accounts, the current New York City craze for gourmet hot chocolate was sparked by City Bakery, a fixture in the Union Square area that began offering a high-end version of the beverage when it opened in the early ‘90s, at the then seemingly outrageous price of $2.50 a cup … Restaurant-industry insiders and observers say the hot-chocolate trend speaks to a growing fascination with retro comfort foods done with a contemporary nod: Think artisanal mac ‘n’ cheese. It also dovetails with the gourmet-coffee movement that shows no signs of stopping.”


Are You Smarter Than a Kohler Toilet?

The Wall Street Journal: “For some innovators, the next frontier is the room in your house most likely to have a lock on the door: the bathroom. Showcasing their goods at this year’s CES tech show, these companies acknowledge a need for privacy in that inner sanctum—then proceed to show off cameras, microphones and other sensors they’d like you to install there … consider a mirror that turns on motion-activated lights when you get up in the middle of the night, or tells you the weather in the morning. Consider setting the shower on to the perfect temperature just by asking, before you climb in. There are even ‘intelligent’ toilets in the works though how intelligent they’ll be remains to be seen.”

“Some startups see the bathroom the way others now look at the automobile: ready for an open-platform operating system of its own. CareOS—a subsidiary of a French firm which also owns connected toothbrush maker Kolibree—designed an entire health and beauty hub … While a camera in the bathroom sounds like something you’d want to cover with duct tape, CareOS chief technology officer Ali Mouizina says all of your data is stored locally. The system won’t even share it with any other smart home or media hubs in your house, unless you want it to. After all, he said, the bathroom is ‘a private place, a very special place’.”


Amazon Has a ‘Basic’ Problem

The Wall Street Journal: “There is one major problem with the idea that Amazon will eat the entire universe … Amazon is good at identifying commodity products and making those as cheap and available as possible … But this system isn’t very compatible with big-ticket, higher-margin items. Could Amazon’s Lab126—famous for both the successful Echo and the failed Fire phone—ever produce something as premium as an iPhone or an OLED TV? Its success in electronics has come from driving their prices to the very bottom.”

“The same goes for Amazon’s other businesses. For example, could Amazon Studios, which has shown little ability to create hits, ever produce a franchise like Marvel’s Avengers or HBO’s Game of Thrones? … Amazon may be mastering commodity goods; its own Basics line went from about 250 products in 2013 to over 1,500 today. But making items widely available at low prices runs directly counter to the way higher-profit businesses work.”

“Consider the makers of high-end handbags, which limit who can distribute their wares and, as a result, who can buy them. Not surprisingly, many of those brands refuse to sell on Amazon at all … The bulk of our everyday goods and services may one day come from Amazon, and everyone from CVS to Uber should watch their backs. Even so, there will continue to be countless competitors that would never dream of branding any of their products ‘Basic’.”


Stinky Cremes: The Odor of Authenticity

The New York Times: “Among skin-care enthusiasts, Biologique Recherche Lotion P50 has a formidable reputation for its exfoliating powers — and an extremely stinky aroma. Formulated decades ago, the French toner contains a hyperspecific blend of lactic acid, onion extract and plankton that loyalists swear will clear up acne and render your skin silky smooth. If you can withstand the assault on your nose, that is.” Danuta Mieloch of Rescue Spas comments: “It’s highly addictive because it helps to achieve healthy, glowing skin. You sort of can’t live without it …Women go to extremes to maintain their skin. A little smell — it’s a small price to pay.”

“P50 is not the only classic beauty product causing a (literal) stink. SkinCeutical’s brightening and firming C E Ferulic serum has a noticeable ‘metallic smell,’ says the New York dermatologist Dr. Dendy Engelman. ‘One of my patients told me it smells like dirty hot dog water’ … The phenomenon represents a sharp departure from fragranced creams and serums from other luxury purveyors … that leave behind a richly perfumed trail with every application. Yet not masking the au naturale aroma of ingredients lends a certain air of authenticity.”

Dr. Amy Wechsler, a New York dermatologist and psychiatrist, comments: “The thinking is that if something stings and smells bad, then it must be doing something … People associate medicine with a bad smell and bitter taste; so with skin care, they think there must be some really active ingredients in there … it’s like, ‘Oooh it’s supposed to smell bad,’ and it feels even more secret and special.”


Perfumarie: The Nose Knows Retail

The New York Times: Mindy Yang’s Perfumarie in SoHo “specializes in blind perfume shopping, allowing customers to smell fragrances with all the branding removed … In her quest to encourage consumers to trust their noses, Ms. Yang decided to put perfumes on tap, labeling them only by number. She installed 32 identical fragrance spouts along the minimalist back wall of the space, removing any hints of branding, packaging or price information. Underneath each tap is a small gray stone tagine containing a white paper swan soaked in the mystery perfume”

“Customers are encouraged to sniff in numerical order, taking notes on a clipboard about the scents that set their synapses ablaze. The scents begin light, with airy and citrusy notes, and get progressively stronger. Ms. Yang likens this to beginning with white wine and graduating to a full-bodied cabernet. Shoppers are not permitted to know the name of the perfume they’ve selected. Instead, the vials are labeled with numbers, looking a bit like prototypes stolen from a chemistry lab … At the end of every month, Ms. Yang hosts a cocktail party to unveil the tap selections. She also posts the full list online so that customers can discover the truth about the perfumes they took home.”

“When customers pay for their first blind smelling, they have the option to become a Perfumarie Explorer’s Club member. Their scent notes are scanned into a database and saved for future reference … Ms. Yang hopes that by offering membership and stressing the community aspect of the store, customers will return month after month. She wants them to treat their past smelling notes like a library, learning how their taste evolves over time … she hopes it will be equally attractive to the industry as a street-level test lab.” She comments: “I am no longer interested in traditional retail. People need to learn how to be empowered to have a point of view and choose what they like for themselves.”


What Does Luxury E-Tail Look Like?

The New York Times: “High-end e-commerce remains a bright spot in the shopping landscape: flooded with more cash than ever before and with bubblelike sky-high valuations to boot. It’s a world dominated by two behemoth competitors … Yoox Net-a-Porter, the largest luxury e-tailer by sales, is one of them. It owns the e-tailers Net-a-Porter, the Outnet, Mr Porter and Yoox; it also operates the e-commerce sites for over 30 luxury brands including Stella McCartney, Dolce & Gabbana and Chloé.”

“Farfetch, the other big name, is an online marketplace for 500 independent luxury boutiques and 200 brands as well as the owner of the bricks-and-mortar store Browns in London … Little wonder that during the past year barely a month went by without Yoox Net-a-Porter or Farfetch unveiling a snazzy new strategy or service in a thinly veiled bid to outmaneuver the other. In April, for example, Yoox Net-a-Porter introduced ‘You Try, We Wait’: a same-day try-on-and-wait premium delivery service with at-home shopping consultations. Six days later, Farfetch started a ‘store-to-door service’ in 90 minutes with Gucci in 10 cities worldwide.”

“Then Farfetch revealed a suite of technologies based on responding to consumers in the ‘Store of the Future.’ Yoox Net-a-Porter promptly responded with ‘Next Era’: a partnership with brands that debuted with Valentino giving customers access to Valentino products wherever they are, and however they want them.”


What’s Next in Luxury Ecommerce?

According to The New York Times, here are three “next wave” luxury e-retailers: “Secondhand luxury (often known as the ‘recommerce market’) is fast becoming big business. The RealReal, an online marketplace that sells pre-owned and authenticated luxury items, was founded by the former C.E.O. Julie Wainwright in 2011 and is expected to generate $500 million in revenue for 2017. It has raised $173 million in funding, and last month it opened its first store, in SoHo.”

Depop: “A mobile marketplace that says it has 350,000 active daily users, Depop has been described as “part Instagram and part eBay.” It is particularly popular with teenagers, who like the way users can personalize their digital storefronts.”

The Modist: “The so-called modest fashion market is booming, with the global Muslim clothing market forecast to be worth $368 billion by 2021, according to the latest Global Islamic Economy report. The Modist, poised to take advantage of the wave, started earlier this year.”