Leinenkugel: Cult Classic or Soda Beer?

The New York Times: “Leinenkugel’s and its parent company, MillerCoors, would like to make the brand more than just a cult or local favorite. And they have largely succeeded with Summer Shandy, a breakout hit released in 2007 that has inspired a whole line of flavor-enhanced brews — watermelon, pomegranate, cocoa-raspberry — and, for the first time, brought the country’s seventh-oldest brewery to taps and store shelves nationwide.”

“But for some longtime drinkers, including many among the 11,000 who gathered in Chippewa Falls for the anniversary party, watching trendy shandies eclipse the workingman’s beers their grandparents once enjoyed is disorienting. During a question-and-answer session with the company’s brewmasters, one wistful Leinie’s drinker shouted, ‘When are you going to brew some beer that tastes like beer?'”

“In August, MillerCoors released Leinenkugel’s Original nationwide for the first time, part of a fall sampler pack of Leinie’s classic brews … with light-bodied German beers enjoying a resurgence, Leinenkugel sees an opportunity to attract new drinkers to the clean, malty lagers beloved in Wisconsin — particularly the 35 percent of shandy drinkers who, company research suggests, didn’t previously drink beer. It won’t be easy. ‘That’s a tall order,’said Ryan Schmiege, assistant brewmaster at the 29-year-old Deschutes Brewery in Oregon and a Wisconsin native. ‘Shandies are the soda of beer. They’re fun, but I wonder whether they’ll really convince people to try the old stuff.'”

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Down Under: Introducing Vegemite Blend 17

The New York Times: “Vegemite, the classic condiment found on breakfast tables in every corner of Australia for nearly a century, is going posh. Bega, manufacturer of the iconic — if divisive — yeast extract spread, released a new and more expensive version of the product this week, raising questions about whether the brand had abandoned its humble roots in favor of a more affluent demographic.”

“The new variety, Vegemite Blend 17, is sold in achingly artisanal packaging that includes an unnecessary cardboard box, a gold-colored lid and a price tag more than double that of a traditional jar, coming in at 7 Australian dollars, or nearly $5.50 … Anthony Agius, a Melbourne resident who says he has eaten Vegemite for 32 years, purchased the new product out of curiosity … Mr. Agius said he could not easily distinguish the new blend from the original.”

“When asked whether the new product may be a cynical, short-lived marketing ploy to draw attention and stoke lighthearted controversy, (marketing director Ben Hill) simply encouraged Australians to ’embrace the taste.’ The company, he said, did not plan to reissue the product after its initial run of 450,000 units. But if the new blend proved popular, Mr. Hill said, Bega might keep making it.”

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Is DIY DOA for Millennials?

The Wall Street Journal: The Millennial “generation, with its over-scheduled childhoods, tech-dependent lifestyles and delayed adulthood, is radically different from previous ones. They’re so different, in fact, that companies are developing new products, overhauling marketing at companies such as Scotts, Home Depot Inc., Procter & Gamble Co. , Williams-Sonoma Inc.’s West Elm and the Sherwin-Williams Co. are hosting classes and online tutorials to teach such basic skills as how to mow the lawn, use a tape measure, mop a floor, hammer a nail and pick a paint color. and launching educational programs—all with the goal of luring the archetypal 26-year-old.”

“J.C. Penney Co. says the group is willing to hire others for projects. The retailer has pushed into home services, including furnace and air-conditioning repair, water-treatment systems and bathroom renovations, and expanded its window-covering installation … Home-furnishings retailer West Elm offers service packages, which start at $129, to provide plumbing and electrical work, painting, installing a television and hanging wall art and mirrors.”

“Home Depot executives want to establish stores as an education center so young adults can learn household maintenance for themselves. Snagging a new homeowner’s first purchases, says Ted Decker, Home Depot executive vice president of merchandising, helps drive return trips and represents potentially ‘thousands and thousands of dollars’ in lifetime sales … In June the company introduced a series of online workshops, including videos on how to use a tape measure and how to hide cords, that were so basic some executives worried they were condescending.”

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Walmart & Zero-Based Shopping Bags

The Wall Street Journal: “Wal-Mart has started using zero-based budgeting in some corporate units and has made cost cuts as mundane as printing receipts on smaller strips of paper—a change that has saved $7 million so far this year … Wal-Mart expects to save $20 million this year by using slightly smaller plastic shopping bags.”

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Apple’s Insanely Great Idea? Stores.

Scott Galloway: “Apple made this crazy irrational decision 20 years ago to forward integrate into the medium that was supposedly going away. Stores. And they have somewhere between five and six billion dollars in store leases now on their balance sheet and have reallocated capital out of traditional broadcast media, which is declining every day in effectiveness, into the store where people still make physical contact if you will. They still consummate the relationship with the brand at the point of purchase.”

“So you have this temple to the brand which is this unbelievable experience called an Apple Store, and then you have this very mediocre experience called an AT&T or Verizon connect your phone experience for Samsung and the other Android players. The biggest value-creating decision in the history of modern decision: Apple’s crazy decision to forward integrate into stores.”

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Amazon: A Bad ‘Hood For Luxury Brands?

The Wall Street Journal: “Amazon is courting companies across the retail spectrum, but one sector is still mostly holding out: the world’s club of luxury brands. Swatch and others in the luxury industry say Amazon’s online marketplace undermines the strict control they say is key to maintaining a sense of exclusivity—and keeping prices high. While some makers of luxury products have decided to join Amazon, many of the industry’s biggest players—including Swatch, Gucci owner Kering, luxury-watch maker Cie. Financière Richemont SA and LVMH Moët Hennessy Louis Vuitton SE —are staying away for now.”

“The absence of high-end products has hampered Amazon’s push to be a force in the fashion industry, despite years of working to expand the merchandise it sells officially though its website. Adding luxury goods would help Amazon boost margins and build loyalty among customers of Amazon Prime, its premium service favored by higher-income shoppers that offers faster delivery and other perks, according to former executives familiar with the company’s shopper base.”

“One of the biggest worries for these luxury companies: The difficulty of segregating their product listings from the rest of the goods sold through the site. That means a $5,000 suit from luxury Italian menswear company Brioni, a subsidiary of Kering, can appear next to a $200 suit from Kenneth Cole.” Jean Cailliau, executive adviser at Paris-based investment bank Bryan, Garnier & Co., comments: “That contradicts the essence of luxury selling and shopping, where the product is the product also because of its environment.”

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Lidl Effect: So Far, Not Much

The Wall Street Journal: “Since opening its first U.S. store in June, Lidl, the German grocery giant, hasn’t exactly upset the American grocery cart … When Lidl’s first nine U.S. stores opened June 15 in Virginia and the Carolinas, they lured customers away from other grocers, according to an analysis by inMarket, a location-based data firm. But Lidl hasn’t been able to sustain that level of traffic, and grocers including Kroger Co. and Wal-Mart have recovered much of their lost market share, according to inMarket.”

“The timing of Lidl’s U.S. arrival wasn’t ideal. It opened its first stores the day before Amazon.com Inc. surprised the industry by announcing it would buy Whole Foods Market. Supermarkets responded, slashing prices to keep up with growing competition on many fronts while investing in online ordering and delivery. Lidl doesn’t currently have an online grocery-shopping operation in the U.S.”

“Missteps in store location and merchandise have hurt Lidl’s U.S. rollout, consumer analysts say … Other analysts said Lidl stores give prominent display to items that seem geared toward Europeans, whether it is $39.99 cycling shoes or $15.99 badminton sets. Some stores’ produce sections have run low on conventional items while stocking big organic offerings, and in some stores emphasis on wine hasn’t squared with local tastes focused on beer.”

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Walmart Shoppers & Drive-Thru Culture

The New York Times: “A personal shopper is something you might expect at Bergdorf Goodman or a boutique on Madison Avenue. Not at the Walmart on Route 42 in Turnersville, N.J. But that’s where you will find Joann Joseph and a team of Walmart workers each day, filling up shopping carts with boxes of Honeycomb cereal, Cheez-Its and salted peanuts. The customers select their groceries online, and then the shoppers pick the items off the store shelves and deliver them to people when they arrive in the parking lot. Customers never have to step inside the store.”

“Walmart, which is one of the largest food retailers in the United States, sees grocery pickup as a way to marry its e-commerce business with its gigantic network of stores — a goal that has eluded many other retailers. The company started ramping up the service two years ago, and it is now available in about 1,000 of Walmart’s 4,699 stores across the country … Walmart is betting big on the millions of Americans in suburban and rural areas who drive everywhere. The company is trying to make ordering groceries online and then picking them up in your car as seamless as a fast-food drive-through.”

“Walmart is also showering grocery pickup customers with perks — Easter eggs hidden in grocery bags, a “beauty box” for moms at Mother’s Day, dog biscuits and discounts for recruiting new customers. It’s unclear how the company will be able maintain this kind of dedicated service if a store is inundated with pickup orders, which in many stores are free of charge and require an order of $30 or more. Walmart said it had hired thousands of workers to staff the new service across its many stores.”

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CVS & The Prescription Experience

Fast Company: “With the profusion of online pharmacies, CVS realized that to give people a reason to come in, it had to design a better service. A new pill bottle system is just one piece of a larger service-design challenge … hinged upon understanding the user end-to-end, rather than one transaction at a time.”

“CVS realized that one lever it had for creating more customer loyalty was the prescription itself—and how often those prescriptions go wrong. About a third of recurring prescriptions never get filled; of those that do, about one third are forgotten after the first couple refills. CVS’s bet is that a better service can improve those figures, and, in doing so, make patients not only more healthy but better customers as well.”

“The new prescription labels are just a start for a number of things CVS has on its roadmap, including ways to bundle together medications meant to be taken at the same time and an in-home delivery service. But perhaps their most user-friendly aspiration is to redesign the role of pharmacists. Today, they typically spend most of their time counting pills … CVS is working to have better service procedures, in which the pharmacists become a front-line in talking to patients—for example, by giving every patient taking five drugs or more an automatic consultation, which includes talking them through the new prescription schedule.”

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