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.”

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City Girl Coffee: The Experience is the Message

The New York Times: “City Girl is bold and risky, from its bright-pink logo and packaging to its business plan’s central tenet: fighting gender inequity in the coffee industry. On average, according to the International Trade Center, women do 70 percent of the work in getting coffee to market but regularly cede or are barred from financial control, so City Girl gets its beans exclusively from farms and cooperatives that are owned or managed by women. In addition, the company donates 5 percent of all profit to organizations that support women in the industry.”

“Sales — principally through City Girl’s online store and in the Twin Cities’ high-end retailers, including Kowalski’s Markets and Lunds & Byerlys — are up 300 percent year over year. City Girl aims to break into other Midwest markets, including Chicago, St. Louis and Des Moines, and then to select cities on the East Coast … chief competitors have argued that City Girl’s female-empowerment message is little more than a marketing ploy.” However, founder Alyza Bohbot says “in this day and age, you can’t have a good product without having a good marketing story.”

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The New World of Airfares

The New York Times: “In the new world of airfares, similar-sounding fare classes like ‘economy’ and ‘basic economy’ can mask big differences in the level of service being offered. Complicating matters further, booking websites often do a poor job of explaining what travelers are actually getting for the listed price.” Travel industry analyst Henry Harteveldt comments: “You need a supercomputer sometimes to figure out what you are getting and what you are not getting. Just to add confusion to the mix, obviously not every airline’s lowest fare includes or excludes the same things.”

For example: “With a basic economy ticket on American Airlines, Delta Air Lines and United Airlines, travelers can’t select a seat in advance. But on Delta, basic economy passengers are still permitted to use the overhead bins if there is available space. On American and United, those overhead compartments are off limits to those who purchase the lowest fares — unless the passenger is an elite member of the airlines’ reward programs.”

“As the airlines continue to further unbundle their fares, Mr. Harteveldt said, customers may have to change the way they consider ticket purchases. ‘It helps to think about shifting your minds from buying fares to buying products,’ he said … He suggested that leisure travelers consider more than just the official price tag. Booking a ticket or flying an airline that prevents you from selecting a seat in advance, for example, can mean getting separated from your family on the plane.”
As Mr. Harteveldt puts it: “The last thing you want to do is have your vacation ruined.”

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‘Potheads’ Inhale The Instant Pot

The New York Times: Instant Pot is “a new breed of 21st-century start-up — a homegrown hardware business with only around 50 employees that raised no venture capital funding, spent almost nothing on advertising, and achieved enormous size primarily through online word-of-mouth … devotees — they call themselves ‘Potheads’ — use their Instant Pots for virtually every kitchen task imaginable: sautéing, pressure-cooking, steaming, even making yogurt and cheesecakes. Then, they evangelize on the internet, using social media to sing the gadget’s praises to the unconverted.”

Company founder Robert Wang “listed the Instant Pot on Amazon, where a community of food writers eventually took notice. Vegetarians and paleo dieters, in particular, were drawn to the device’s pressure-cooking function, which shaved hours off the time needed to cook pots of beans or large cuts of meat. Sensing viral potential, Instant Pot sent test units to about 200 influential chefs, cooking instructors and food bloggers. Reviews and recipes appeared online, and sales began to climb.”

“At one point, more than 90 percent of Instant Pot’s sales came through Amazon.” Mr. Wang also revealed a secret: in every official photograph of an Instant Pot, the unit’s timer is set to 5:20 — a series of numbers that, when spoken aloud, sounds like ‘I love you’ in his native Mandarin. ‘It’s a subliminal message,’ he said. ‘It shows how much we care about our customers’.” He adds: “We know we really make a difference in people’s lives. It’s really gratifying.”

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Some Retailers Try Simplified Pricing

The Wall Street Journal: “Retailers have a gift for discount-obsessed holiday shoppers: simpler pricing … Kohl’s has been testing a ‘Your Price’ feature that shows the final price after all discounts … For example, a Disney Princess Palace, regularly priced at $79.99, was on sale on Kohl’s website earlier this month for $54.99 and eligible for an extra 25% off. The “Your Price” was $41.24.”

“Like Kohl’s, Penney this year started showing online shoppers the sale price net of all discounts on the product page and increasingly has been advertising sales with final dollar amounts, rather than percentage discounts … The retailer also has been posting ‘sale conversion charts,’ intended to help shoppers figure out prices … Christine Dunne, of the Bronx, N.Y., said she noticed the changes at the Penney store near her home.” She comments: “It makes shopping so much easier. In the past, I’d get to the register and realize the price I’d calculated in my head was wrong.”

“Not all retailers have simplified their pricing, and marketing experts say that is by design. ‘Multiple mental deductions based on promotions can result in consumers perceiving that their costs are lower than they actually are, which can increase spending,’ said Cynthia Cryder, an associate professor of marketing at Washington University in St. Louis.”

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Toblerone & Trademark Triangulation

The New York Times: “When the makers of the distinctive Swiss confection Toblerone reconfigured their triangular treat last year to slim down its hallmark summits and widen the valleys between them, a potential rival — Britain’s Poundland discount chain — saw a niche in the market … while the classic Toblerone bars had become lighter in weight in the reconfiguring — though their price remained the same — Poundland’s bar would be chunkier and cheaper, at one pound, or about $1.35, each.”

“Not, of course, that this was some crude copycat. If, as some contend, Toblerone was modeled on the soaring pyramid of a mountain — the Matterhorn on the Italian-Swiss border, which is about 14,690 feet high — Poundland’s bar was said to have been inspired by two less vertiginous hills in the English county of Shropshire near the border with Wales — the Ercall, at 460 feet, and the Wrekin, at 1,335 feet. Hence the shape of the Poundland bar, with a double set of summits between each valley. And hence its name: Twin Peaks, with what Poundland called ‘a distinctive British flavor compared to Toblerone’s Swiss chocolate nougat’.”

After some legal wrangling, Poundland “was permitted to begin selling in its nearly 900 stores the 500,000 bars already in production — provided it changed the background color of their wrappers from gold to blue. And the lettering was changed: to gold, from the original red. Once the initial 500,000 bars have been sold, Poundland said in a news release, it will ‘revise the shape’ so that the bar ‘better represents the outline of the Wrekin and Ercall hills’.”

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AC Store: The World’s Priciest Grocery?

Boing-Boing: “Barrow, Alaska (pop. 4,335) sits on the northernmost tip of the state. Because of its remote location, groceries are expensive — really expensive … A bag of Tostitos tortilla chips here are ‘on sale’ for $10.74. A single roll of toilet paper is $2.60. A box of Froot Loops is $9.73 …”

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Dollar General & Rural Retail: Ka-Ching!

The Wall Street Journal: “Dollar General is expanding because rural America is struggling. With its convenient locations for frugal shoppers, it has become one of the most profitable retailers in the U.S. and a lifeline for lower-income customers bypassed by other major chains.Dollar General Corp.’s 14,000 stores yielded more than double the profit of Macy’s Inc. on less revenue during its most recent fiscal year. And its $22 billion market value eclipses the largest U.S. grocery chain, Kroger Co., which has five times the revenue.”

“While many large retailers are closing locations, Dollar General executives said they planned to build thousands more stores, mostly in small communities that have otherwise shown few signs of the U.S. economic recovery … This lower-end market is better protected from Amazon and competitors that target wealthier shoppers.”

“For decades, Dollar General prices have been marked in 5-cent increments, making it easier for shoppers to estimate the total price of their purchases … Many popular brands are packaged in small quantities to keep prices under $10—generally yielding higher profits per item than bulk goods at such warehouse chains as Costco … The founders of Dollar General lived in small-town Kentucky and started the company there in 1955, making the store’s rural locations a natural fit. When Wal-Mart Stores Inc. grew past 3,000 stores in the early 2000s, a strategy surfaced: ‘We went where they ain’t,’ said David Perdue, Dollar General’s chief executive from 2003 to 2007.”

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How CVS & Aetna Could Change Healthcare

Business Insider: “CVS Pharmacy’s $69 billion deal to acquire the health insurer Aetna — the second-biggest deal of the year — is different. It could actually make treatment simpler and easier for Americans, and it catches a bunch of trends in the market that push costs down. There are two big streamlining ideas at work here. First … Pharmacy Benefit Managers (PBMs) are the gatekeepers between insurers and a patient’s medical treatment, and CVS already has one. Ideally it ensures that the PBM is incentivized to keep costs for the insurer as low as possible.”

“For the most part, though, this doesn’t fundamentally change Americans’ experience when they get sick. PBMs are faceless entities, and insurance is a foreign language to a lot of people. This is where the second streamlining idea in this CVS acquisition comes into play … the company will be ‘promoting lower-cost sites of care’ after this acquisition. That means turning brick-and-mortar stores into treatment centers and hiring medical staff. That’s expensive, but it will keep sick people out of more expensive hospitals, which keeps costs down for insurers and ultimately customers.”

“And unlike a lot of new urgent-care facilities hitting the market to do this very thing (keep people out of hospitals), CVS comes with a ton of brand familiarity. Plus, quarter after quarter CVS has seen that its other businesses are outperforming sales in its retail channel. Turning brick-and-mortar stores into healthcare facilities is one way to make good use of them.”

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Black Friday Tricks of the Trade

The Wall Street Journal: “Instead of copying Amazon.com Inc.’s playbook, retailers such as Wal-Mart Stores Inc. and Target Corp. are coming up with new tricks to maximize sales ahead of Black Friday … In the months leading up to the holiday, Target has shifted away from ‘up and down’ pricing moves, streamlining the number of promotions to focus only on ‘impactful’ sales … The company has also reduced the phrases it uses for discounts from 28 last year to seven, dropping language like ‘weekly wow’ and ‘as advertised’ … It is also offering extra incentives to its loyalty card holders, such as early access to Black Friday promotions.”

“Wal-Mart, which has long emphasized an ‘everyday low price’ message, has been experimenting with a new online system, which at times results in higher prices online than in stores for goods that would otherwise be unprofitable to ship. Some product listings on its website now indicate an ‘online’ and ‘in the store’ price … The Bentonville, Ark., retailer said it would sell more exclusive products this holiday as compared with last year.”

“For the first time, Best Buy Co. offered hundreds of Black Friday deals on TVs and other devices in early November in hopes of driving sales before the competition heats up. The electronics giant has a price-matching guarantee, but the offer doesn’t apply to items on sale Thanksgiving through Monday.”

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