Cadillac House: The Car as a Retail Experience

Bloomberg: “Cadillac House is a coffee shop/retail boutique with an art gallery twist and even a bespoke scent … The 12,000-square-foot space is located on the ground floor of the company’s New York office and will open to the public on June 2 … the point of this new space is not to sell cars … No, this time Caddy has convinced some well-respected fashion-y names to make it more of a destination: Visionaire, the creative firm and magazine, will curate an exhibit at Cadillac House each quarter; the fashion brand Timo Weiland will sell clothing in a pop-up shop; 12.29, which scented shows for Rodarte and Lady Gaga, is concocting a signature ‘Cadillac’ fragrance for the room. New York’s Joe Coffee is providing the beans.”

“We have tried to tell people what you’re supposed to feel from the Cadillac brand,” said Melody Lee, who is Cadillac’s brand director. “But what we hadn’t quite fully established was an environment that you could walk into.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Shah & Shah: A ‘Speakeasy-Style’ Jewelry Store

The Washington Post: Colin Shah “has put his family’s jewelry trade in a time machine and turned it back to the speakeasy approach that great-grandfather Izzy used when he ran it in the 1930s. There is no storefront. No marketing. No signs. Shah & Shah boutique lies behind a door on the sixth floor of a downtown office building. You push a doorbell to get buzzed inside.”

“Most customers are referred, which means they come in more positive than fearful … A lot of hustle is involved. Word of mouth means socializing with clients, talking to people, attending parties. Last week, he held an open house with champagne and chocolates for Mother’s Day … Everything is a throwback to the days of personalized jewelry sales. The walls include black-and-white photos of the family’s shops from the past. There is a photo of a young Jack Benny.”

“Shah wants every touch to hint at elegance. He plops down a beautiful silver candy dish filled with Edward Marc dark-chocolate nonpareils. He follows with a bottle of Hildon water, which looks like glass artwork that might be for sale. Most of his business is in creating jewelry for the 2,500 customers on his client list … Shah did more than $2.3 million in sales last year … Profitability can run well into the middle six figures.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Air Rage: It’s a First-Class Problem

Quartz: “Researchers from the University of Toronto’s Rotman School of Management and Harvard Business School showed that incidents of air rage in economy class were significantly higher when planes had a first class cabin.”

“Their models showed that rage was nearly four times as likely on flights with a first class cabin than on those without. Controlling for factors like seat pitch and width, the researchers concluded that having first class increased the odds of passenger problems amounting to an additional 9.5-hour delay.”

“In addition, the researchers showed that when people had to walk through first class to get to their seats, rage among first class passengers themselves was nearly 12 times as likely as when people boarded from the middle. When people in economy class had to walk through first class, rage was about twice as high among the economy class passengers.”

“The study shows correlation, not causation, so the researchers can’t be sure that simply the sight of wealth makes people more irritable. There are other factors that could contribute to air irritability: Larger flights with multiple cabins could correlate with longer board times and more unwieldy carry-on storage, which could both make people more likely to act out.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Luxury Today: Big Data & The Rising Velvet Rope

The New York Times: “Today, ever greater resources are being invested in winning market share at the very top of the pyramid, sometimes at the cost of diminished service for the rest of the public. While middle-class incomes are stagnating, the period since the end of the Great Recession has been a boom time for the very rich and the businesses that cater to them.”

“In many ways, the rise of the velvet rope reverses the great democratization of travel and leisure, and other elements of American life, in the post-World War II era. As the Jet Set gave way to budget airlines, in places like airports and theme parks even the wealthiest often rubbed shoulders with hoi polloi … What is new is just how far big American companies are now willing to go to pamper the biggest spenders.”

“Many companies … have discovered that offering ordinary customers just a whiff of the rarefied air can actually enhance the bottom line, even if it stirs a certain amount of envy and resentment … And with the rise of the Internet and big data, companies can pinpoint and favor these wealthiest customers in ways unimaginable even a decade ago.”

“For companies trying to entice moneyed customers, that means identifying and anticipating what they want … But for people at the lower end of the market, as well as in the middle, plenty of friction remains. The trade-off is that the amount of hassle is precisely calibrated to just how much you are willing to pay.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

The ‘Margaritaville’ Experience is a State of Mind

“Margaritaville, with its themed restaurants (erupting volcanoes, boat-shaped booths), started as a tropical cousin to T.G.I. Friday’s,” The New York Times reports. “Through trial and error, Jimmy Buffett and a partner, John Cohlan, have since expanded Margaritaville Holdings to include four booming divisions: lodging, alcohol, licensing and media. Now, as they pursue growth for the first time overseas … they are trying to recast Margaritaville as a broad, aspirational brand — the Ralph Lauren of leisurely escape, if you will.”

“The stroke of genius was making Margaritaville a feeling, not a place,” said Mindy Grossman, the chief executive of the home-shopping behemoths HSN and Frontgate, where 400-plus Margaritaville items include a $799 hammock and $159 penny loafers. “If you don’t take the name so literally, growth could be endless.”

Margaritaville is “building a unique corporate culture — employees all use the same valediction in emails: ‘Fins Up!’ — and drawing fanatic customers like Carol and Butch Wayland … ‘We’re not Parrot Heads,’ Mrs. Wayland said. ‘We’re just normal, everyday people who happen to be residents of the Margaritaville state of mind.’ Mrs. Wayland, who is in her 50s, added that she had ‘spent a fortune’ on Margaritaville products, including hats, flip-flops, dress shirts, shorts, clocks, coffee mugs, barware, a blender and underwear.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Late & Great: Giorgio’s Fred Hayman

The New York Times: The late Fred Hayman “was the banquet and catering manager at the Beverly Hilton in 1961 when he invested several thousand dollars to become the silent partner in Giorgio, a struggling women’s clothing store off Rodeo Drive … The location was nothing special.”

“They saw the street, in their dreams, as a rival to Bond Street in London or Fifth Avenue in New York. Mr. Hayman showcased top designers new to the West Coast … He created a sunny, eye-catching exterior with awnings in bright yellow and white and a clubby interior with a pool table and an oak bar, with free drinks, so men could relax while their wives or girlfriends shopped.”

“Drawing on his hotel experience, he lavished the attentions of a concierge on his customers. He sent handwritten thank-you notes, set up a valet parking service and delivered packages to his best customers in a 1952 Rolls-Royce. By the mid-1970s the A-list clients were pouring in … spending tens of thousands of dollars in one go. Some patrons arrived with an extra limousine to haul away their purchases.”

“It was incredible how the money just flowed in,” Mr. Hayman told The New York Times in 1991. “You really didn’t have to sell. You’d just stand there and the customer would say, ‘I’ll have that and that and that and that.’” Fred Hayman was 90.

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Fina Finds New Beginning As Dot-Com

The New York Times: “On April 16, Michael C. Fina, which had sales of $16 million last year, will close its sole brick-and-mortar store, laying off about 20 workers and bringing to an end an 81-year run in Manhattan. Instead, the retailer is moving entirely online, including teaming with Amazon.com as part of a planned revamping of the e-commerce giant’s wedding registry service.”

Fina “already operates an e-commerce site, but it can take up to 72 hours for a product to be shipped … Amazon has told him that its fulfillment centers will be able to ship an order in as little as two hours. Mr. Fina also said he expected shipping costs to fall by as much as 50 percent, because of Amazon’s economies of scale.”

The bridal-registry retailer “will also offer its wares on Zola.com … Shan-Lyn Ma, founder of Zola.com, said that because couples in the United States were marrying much later than ever, and because they increasingly lived with their partners before tying the knot, their wedding gift needs had shifted away from the housewares and appliances that traditionally went toward setting up a first home.” She explains: “Couples are really starting to value experiences rather than straight wedding products.”

“On Zola.com, couples can list hiking trips, hot air balloon rides and food delivery subscriptions, as well as funds for puppies, honeymoons and even fertility treatments.” Ms. Ma started Zola in 2013. “But she has since realized that many couples want to add a few traditional items into their wedding registry mix. And a partnership with Michael C. Fina, she said, gave Zola access to brands that the site might have trouble courting.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

The Uber Model Isn’t Uber Great for Others

“Investors saw Uber’s success as a template for Ubers for everything … But Uber’s success was in many ways unique,” writes Farhad Manjoo in The New York Times. “For one thing, it was attacking a vulnerable market. In many cities, the taxi business was a customer-unfriendly protectionist racket that artificially inflated prices and cared little about customer service.”

“The opportunity for Uber to become a regular part of people’s lives was huge. Many people take cars every day, so hook them once and you have repeat customers. Finally, cars are the second-most-expensive things people buy, and the most frequent thing we do with them is park. That monumental inefficiency left Uber ample room to extract a profit even after undercutting what we now pay for cars.”

“But how many other markets are there like that? Not many. Some services were used frequently by consumers, but weren’t that valuable — things related to food, for instance, offered low margins … Another problem was that funding distorted on-demand businesses. So many start-ups raised so much cash in 2014 and 2015 that they were freed from the pressure of having to make money on each of their orders … The lesson so far in the on-demand world is that Uber is the exception, not the norm. Uber, but for Uber — and not much else.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

For Whom The Cash Registers

“High-end stores hide registers to force contact with salespeople, eliminate lines and add fancy sheen,” The Wall Street Journal reports. “Stores aim to make the experience of paying more elegant, akin to private shopping, and to eliminate a pain point that keeps some shoppers from completing a purchase—having to wait in a visible line. Hiding the cash register also forces shoppers to interact with the salespeople and might even encourage them to buy more.”

Dexter Peart of luxury label Want Les Essentiels: “We’re downplaying that last transactional part of the experience. … We want the human interaction as one of the last touch points … This time also gives our sales associates an opportunity to get to know the people shopping in our stores a lot better.”

“Stores say customers’ expectations have risen with the success and ease of online shopping, making waiting in line seem unenlightened … But making cash registers discreet and encouraging customers to work through sales associates instead could make some shoppers uncomfortable. The unfamiliar protocol may feel strange at first.” Barneys maintains “a few visible cash registers in the downtown store in case a customer feels more comfortable paying the traditional way.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

BMW Modulates Its Amplitude Attitude

BMW Blog: “BMW was the first automobile company to ditch AM radio functionality, with its recent i3 electric vehicle, and it caused quite a stir among i3 owners. The reason for the drop of one of America’s oldest broadcasting mediums is that the electromagnetic interference from the electric drivetrain of the car blocks out the AM signal, making it fuzzy and choppy.”

“Most Americans, and nearly everyone else around the world, feel as if AM is a dead technology and won’t be around much longer, so there’s no fuss there. However, as it turns out, nearly 3 million Americans listen to AM radio everyday, tuning in to local broadcasting stations, many talk radio stations and most broadcasted sports radio.”

“So due to AM radio’s loyal following, many automakers, BMW included, are looking for a way to reduce and eliminate the interference that comes from electric vehicles … If someone pays that much money for a car, regardless of what kind of car it is … they want to be able to listen to whatever kinds of radio they want.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail