Burger Serf: How Many Whoppers Per Second?

The Verge: A new Burger King ad explains “the concept of net neutrality with a stunt that showed what it would be like to have paid prioritization in a burger joint. In the ad, actors playing Burger King employees taunt ‘actual guests’ by making them wait for absurd amounts of time to receive their food — unless they pay huge tolls to get it quickly.”

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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.”

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Adidas Kicks are a Ticket to Ride

City Lab: “Starting January 16, Berlin transit authority BVG will release its own limited edition line of sneakers, a project that’s the first of its kind anywhere in the world. A collaboration with Adidas Originals, the sneakers’ tie-in with the subway will be immediately apparent to any Berliner: the heel counters feature the unmistakable seat upholstery pattern featured on the city’s public transit fleet.”

“The sneaker’s tongue will include a feature that’s arguably more striking—a fabric version of the annual BVG season ticket. That means the wearer gets free travel on subways, trams, buses, and ferries anywhere within Berlin public transit zones A and B— which cover almost all of the city—from January 31st to the end of the year.”

“Then there’s the price, which is a snip at €180 ($215) a pair. That makes them more expensive than the average sneaker, but much cheaper than a traditional annual transit pass, currently €728 ($869) for the same zones.”

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Chickens Rule The Retail Roost

The Wall Street Journal: Rotisserie chickens “emerged as a supermarket staple in the 1990s, paving the way for the array of prepared foods that grocery stores sell today. Now they are many grocery stores’ best-selling hot food item and a rare bright spot in an industry struggling to adapt to a shift away from packaged foods … To continue selling them for $5 to $7 each, executives are working to trim supply-chain costs, cook chickens more efficiently and throw fewer of them away unsold.”

“One reason executives say it is so important to hold down rotisserie prices is that shoppers often buy higher-margin side dishes and beverages to round out a meal … Grocers also are tweaking their marketing strategy to make their chickens stand out. Some have introduced lemon pepper and barbecue flavors, as well as organic and antibiotic-free chickens. Others are placing stocked chicken warmers in checkout aisles to inspire last-minute purchases.”

“While Kroger and Mariano’s display their chickens near the front of the store, Costco puts them at the back, hoping people will add to their carts on their way to getting a chicken. Costco has sold rotisserie chickens for $4.99 since 2009. When a bird flu outbreak prompted higher prices for ready-to-cook chickens in 2015, Costco took a $30 million to $40 million profit hit to keep its rotisserie prices steady … Some stores sell deboned rotisserie-chicken meat at a higher price.”

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Moxy Times Square: Cool & Cheap

The New York Times: “Moxy Times Square is a cool 612-room hotel that opened in September — and you can stay there from just $99 (£73) a night. The hotel offers guest rooms and coworking spaces designed by international design firm Yabu Pushelberg, as well as Magic Hour, which it says is the city’s largest indoor-outdoor hotel rooftop.”

“Room rates start at $139 (£103) a night for a standard double, but the hotel also has 19 $99 ‘Crashpad’ rooms on offer ‘meant for customers who order one too many drinks or don’t want the night to end,’ bookable only through Magic Hour.”

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Late & Great: Fred Bass

Quartz: “Fred Bass, co-owner of New York’s massive used bookstore, fondly known as the Strand, died of heart failure Jan. 3 at 89. Bass transformed his father’s modest store into the four-story bookshop immediately recognizable to New Yorkers and tourists today: The store on Broadway, with its red-and-white awning over $1-book carts lining the southern-facing exterior.”

“There are two basic things a good bookstore can provide: The delightful maze of human-curated shelves, or the satisfaction of efficiently getting the book you’re looking for. Amazon has done its part in taking away business from the bookstore chains that have excelled at the latter, like Borders and Barnes & Noble. The now Everything Store once sold nothing but books, and one way it’s done so successfully is by offering deep discounts. The Strand, though nowhere near as ubiquitous as Amazon.com, has been able to tout dizzying volume at the same time it’s maintained a beloved shopping experience.”

“What Amazon has done well—sell its vast inventory to you for super cheap—Bass did first. And with tote bags. Nearly all the store’s books are sold at a discount, ranging anywhere from a couple dollars off a new title to less than a $1 for a classic or a book that’s run its course … Today clutching one of Strand’s 100 or so bag designs is a proud display of reader identity.”

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How ‘Ankle-Biters’ Nip Big Brands

The Wall Street Journal: “Consumers in rich countries once embraced the consistency, convenience and affordability of their offerings, from disposable razors to ready-to-boil ravioli. In other parts of the world, a growing middle class clamored for many of the same trusted, Western brands.”

“Today, that isn’t good enough. Shoppers have gravitated in droves toward smaller, niche or locally made products. In many cases, they are seeking out healthy alternatives and more natural ingredients. Manufacturing costs have fallen, allowing small players to seize quickly on trends. Social media and e-commerce have made marketing and distribution easier.”

RBC analyst James Edwardes Jones comments: “We think big incumbents—however well managed—are going to continue to struggle against the depredations of the ‘ankle-biters’.”

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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’.”

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Why Do Shoppers De-Value Digital Goods?

Harvard Business Review: “Despite the many advantages of … digital goods, companies find again and again that people value and are willing to pay considerably more for … their physical counterparts … experiments suggest that the key driver of this value loss is not the resale value of the good, or how much it costs to make, or how long it can be used, or whether it’s unique or popular. We find that the key difference is that digital goods do not facilitate the same feeling of ownership that physical goods do.”

“Because we cannot touch, and hold, and control digital goods in the way that we interact with physical goods, we feel an impaired sense of ownership for digital goods. They never quite feel like they are ours, and when we feel that we own a thing, we psychologically inflate its value. As a result, digital goods don’t enjoy this premium we extend to things that we own.”

“Ownership may be achieved by increasing users’ feeling of control through touch interfaces, and customization opportunities that involve users in the production or design of the product … people may devalue autonomous devices that require little or none of their input … those devices will not benefit from the value premium extended to goods for which people feel psychological ownership … Because perceived ownership is impaired for digital goods, people may not feel that their piracy causes the same harm to their owners as does the comparable theft of physical goods.”

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