Abercrombie & The Demographics of Fashion

Business Insider: “Abercrombie has been trying to save itself for a while now, reinventing its image and as a result becoming totally unrecognizable to the generation of kids who grew up shopping there in the late ’90s and early aughts. The goal was to appeal to older shoppers — 18 to 25 year olds, not teens … In theory, this was a smart idea … this would open the gates to a demographic with more spending money. The move would also help Abercrombie set itself apart from its more teen-friendly sister brand, Hollister … But the brand’s attempt to execute a turnaround is proving to be very difficult.”

Eric Beder of Wunderlich Securities comments: “While the shift to an older customer is a strategy for Abercrombie, we see limited reasons for older customers to shift back to a ‘teen’ brand and, frankly, there are better brands and lifestyles for the 20+ customer to focus on.”

Betty Chen, managing director of Mizuho Securities adds: “In the history of retail, it is very difficult when a brand tries to reposition itself anywhere along the age demographic. You can almost predict failure when you’re going older or younger.”

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Walmart: Neighborhood Markets Crush It

Business Insider: “There’s a retail business with 700 stores nationwide that has 22 straight quarters of positive comparable sales growth and 11 straight quarters with comps up 5% or more. It’s not Kroger or Costco, but a division of Walmart that has been quietly crushing the competition — the Neighborhood Market.”

“There are a number of reasons why Neighborhood Market has found success … Grocery now makes up the majority of WalMart’s U.S. segment, and it’s been its best performing one in recent years … Grocery is also one of the few retail categories that rivals like Amazon.com have struggled to penetrate … delivering perishables to your doorstep remains difficult and expensive.”

“Wal-Mart began its life catering to rural customers and has long struggled to penetrate markets … The Neighborhood Market concept, however, has given it the ability to open up in dense cities where real estate may not be suitable for a Supercenter … Wal-Mart’s Neighborhood Markets can also take advantage of food deserts in such environments, neighborhoods where residents have little access to fresh food.”

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Amazon: ‘Subscribe & Save’ or ‘Bait & Switch’?

The New York Times: What do subscriptions to a newspaper, magazine or Netflix account have in common? Once you sign up, you expect to pay the same rate every month. Yet that’s not the case at Amazon when you subscribe to its Subscribe & Save program, which automatically refills orders for household staples like instant coffee, napkins or trash bags.”

“Buried in the e-commerce company’s terms and conditions is that the Subscribe & Save discount is applied to the price of the item at the time that the order is placed. And on Amazon, prices change frequently — including sometimes rising.”

“In Amazon’s online forums, dozens of people posted about prices of Subscribe & Save items fluctuating, with some calling the program a ‘bait and switch’ subscription scheme. Amazon declined to comment. The company emails people 10 days before a recurring subscription delivery, when it informs customers of a new price of their item so they can change or skip the order. Any sticker shock, analysts said, may be the result of Amazon’s complex pricing system coming into conflict with consumer expectations of a traditional subscription.”

“Sucharita Mulpuru-Kodali, an analyst for Forrester Research who follows Amazon, said the retailer was probably pushing prices up to test how loyal customers are to products and how much more they are willing to pay for them. Yet the sharp price changes on Subscribe & Save items caught her by surprise.” She comments: “It doesn’t seem as customer-friendly as Amazon typically is. That’s what’s unusual.”

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Lowering The Bar: Soap Loses Lather

The Washington Post: “More than half of consumers — 55 percent — say bar soap is inconvenient when compared to liquid varieties, according to a new report by research firm Mintel. Among their chief complaints: Bar soaps leave residue in the shower, require a dish for storage, and aren’t as long-lasting as liquid options.

“An earlier study by Mintel found millennials are eschewing cereal for similar reasons. Roughly 40 percent of those surveyed by Mintel said ‘cereal was an inconvenient breakfast choice because they had to clean up after eating it,’ according to The New York Times. As a result, cereal sales have slipped by nearly 30 percent since 2000.”

“But when it comes to soap, the perception of cleanliness may also be a factor. Nearly half of those surveyed said they believe bar soaps are often covered in germs, a view that was more widely held among younger consumers than older ones.”

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Lovefone: Outside the (Phone) Box

New Atlas: “A smartphone and tablet repair outfit has found a fitting way to breathe new life into the UK’s iconic red telephone boxes. Lovefone is converting the underused booths into the kind of mobile phone repair shop that should probably be avoided by those with a fear of enclosed spaces. Each one will sport workbenches, charging stations and free Wi-Fi.”

“Lovefone is exploring yet another approach. The Lovefonebox takes the firm’s device repair services out of its shop premises and into the 1-sq m (10.8-sq ft) units across London and beyond … Lovefone staff are being rotated across the firm’s lab, shop and phone boxes every three days to provide variety in their roles and to minimize the potential for phone box ‘claustrophobia.’ The rotation also aids the firm’s approach to formal and informal learning for staff.”

“The first Lovefonebox opened last week in the Greenwich area of London, with another eight already planned across the city. Lovefone’s aim is to open around 37 locations in London over the next 18 months, as well as to offer franchise opportunities elsewhere in the UK.”

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Cool Beans: America’s New Favorite Snack?

Christian Science Monitor: “Once relegated to the canned food aisle and the far reaches of the salad bar, the bean suddenly is becoming a star. These days, it’s popping up in the most unexpected places: in pasta and chips, and even as a centerpiece of dishes at the world’s best restaurants. And it’s no wonder, considering beans are packed with protein and a plethora of other nutrients, say nutrition experts. They’re also inexpensive and among the most environmentally benign agricultural crops.”

“Last year in the United States, sales of pulses – which are the seeds of legumes that are used as food, including peas, beans, lentils, chickpeas and fava beans – grew by 8 percent. By comparison, sales of meat grew by 3 percent. Global demand is also rising, especially for foods with green or yellow split peas and coral-colored lentils, reports market researcher Mintel.”

“Pepsi has launched a bean chip under its Tostitos brand, as has General Mills, under its Food Should Taste Good brand. The Good Bean chips are now available at many conventional grocers, including Costco. Its sales doubled in 2015 and are expected to do the same this year, says the company. Even 7-Eleven has signed on to carry the chips.”

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Home Depot: Stores Are Fulfilling

The Wall Street Journal: “About 42% of Home Depot’s online orders and almost 90% of its online returns for the second quarter were handled by its stores, executives said this week as they announced a 9.3% increase in net profit to $2.4 billion, on a 6.6% increase in revenue.”

“Many in the retail industry believe fulfilling online orders from physical stores can be provide store owners an advantage over online competitors like Amazon.com Inc., allowing brick-and-mortar shops to serve as both showrooms and well-located mini-distribution centers.”

“Home Depot says it is aided in part by its existing delivery service, which previously only served in-store customers, and its investment into new order management software. Online purchases can now be delivered from more than 700 stores, faster and with shorter scheduled-delivery windows than previously possible.”

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Quote of the Day: Dick Johnson

“The facts are that most of the basketball shoes that we sell never see a basketball court. Most of the running shoes that we sell never see the roads or the trail or the track. They just look really good, and they’re part of the sneaker culture that we really support.” – Dick Johnson, CEO of Foot Locker, reporting that second-quarter sales at existing Foot Locker stores rose 4.7%, via The Wall Street Journal.

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Cupping: The Next Big Olympic Sport?

FiveThirtyEight: “For the past two weeks, people at the Olympics have been losing their minds trying to collect yellow and blue plastic souvenir cups that feature the silhouetted athletes of each sport. The cups are sold only with the official Olympics beer — Skol — though many collectors are just dumping out the beer or paying full price (13 reais, or about $4) for an empty cup, several vendors confirmed.”

“But although the cups, which are an advertising product for the beer, have been hugely popular, there is little in the way of official information from the company about the collectibles, which has led to the curious situation of visitors trying to complete a set of some indeterminate number.”

“The confusion comes in part because no official marketing materials were released by Ambev, the South American distributor of Skol, stating the number of cups or how best to collect them. But the mystery has only fueled fascination, making the frenzy around the cups more happy accident than calculated guerrilla marketing.”

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