Brand Promises: Final Sale? Just Kidding!

The Wall Street Journal: “The phrase used to mean a last-ditch promotion, with steep price reductions on end-of-season castoffs and no chance of returns. But lately some brands are using a different sort of ‘final sale,’ strategically discounting slow-moving merchandise in mid-season, even though future discounts may still be possible. The new tactic still means no returns or exchanges … Fickle shoppers, hungry for discounts but accustomed to changing their minds, aren’t pleased.”

“Lauren Taylor Baker, a 31-year-old digital entrepreneur in Atlanta, says she used to get a thrill from finding a great bargain marked final sale … But after several final-sale purchases she regretted, Ms. Baker says she feels burned and no longer believes a final-sale price is the lowest it will go. Now, she says, when shopping for something marked final sale, she ignores the original full price and evaluates it based on quality and fit.”

“Katie Amato, of Buffalo, N.Y., does most of her shopping online. While she likes a sale, she tends to avoid final sale items. ‘Things might not fit, or the quality might not be as expected, and then you are stuck with it,’ says the 30-year-old postdoctoral researcher. Final sales make her feel ‘trapped or manipulated,’ she says.”

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Game Changer: In-App Purchases

The Wall Street Journal: “In-app purchases are ‘dramatically changing the mobile-entertainment landscape,’ said Andrew Phelps, director of digital media at Rochester Institute of Technology. They ‘engage people in a longer financial discourse than you would have in an upfront sale’ … The secret sauce behind many in-app purchases is the countdown clock—a frustration tax that forces gamers to idle before they can perform duties such as farming crops or replenishing fuel, unless they pay for more turns or items to speed up the action.”

“Converting players into spenders without turning them off is key; gamers have derided free-to-play games as ‘free to play, pay to win’ for years. Developers, though, have gotten savvier about giving players more free things to do to keep them hooked until they start spending. In ‘Pokémon Go,’ players can go weeks capturing dozens of ‘pocket monsters’ without needing to spend money. After investing so much time, players might be more inclined to dole out cash to upgrade their gear so they can carry more items and creatures, for example.”

“Algorithms are playing an increasing part in nudging players to spend. Based on dozens of data points—how often gamers play, what model mobile device they use, location and gender—developers might raise a game’s difficulty level, making no two players’ experiences exactly alike … Data on players’ behavior also are used to strategically tweak prices for virtual goods in real time … Other tactics: tapping into players’ “fear of missing out” through limited-time events, and cultivating relationships between players.”

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Dollar Shave & The Digitally Native Vertical Brand

The New York Times: “The same forces that drove Dollar Shave’s rise are altering a wide variety of consumer product categories. Together, they add up to something huge — a new slate of companies that are exploring novel ways of making and marketing some of the most lucrative products we buy today. These firms have become so common that they have acquired a jargony label: the digitally native vertical brand.”

“By cutting out the inefficiencies of retail space and the marketing expense of TV, the new companies can offer better products at lower prices. We will get a wider range of products — if companies don’t have to market a single brand to everyone on TV, they can create a variety of items aimed at blocs of consumers who were previously left behind. And because these companies were born online, where reputations live and die on word of mouth, they are likely to offer friendlier, more responsive customer service than their faceless offline counterparts.”

“It’s striking how few of these online companies could have taken off in the presocial age. At the very least, they would have been sunk by the inability to target ads to the demographics they’re aiming to serve.”

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The Sweet Science of Designer Deodorant

The Wall Street Journal: “Brooklyn, N.Y.-based Soapwalla charges $14 for a 2-ounce jar of deodorant cream. It has the consistency of buttercream frosting … male customers have said they prefer it over a waxy stick, which snags and pulls hair. Cream also makes it easier to apply to other places on the body, such as the feet.”

“Prices for these offerings are reaching new heights, well beyond the old standard of two or three dollars a stick. Sprays and stronger stick offerings, known as clinical strength, come with $5 to $10 price tags. Natural deodorant often costs $15 or more. Tom Ford has two sticks, from his Oud Wood and Neroli Portofino fragrance lines, priced at $52 a piece … … A spokeswoman for Tom Ford Beauty … says the brand’s $52-per-stick price tag reflects the effort it takes to translate a complex, premium fragrance into a deodorant.”

Meanwhile: “Thirty percent of women reapply their deodorant during the day, according to Procter & Gamble Co., maker of Secret, Old Spice and Gillette; 20% of women say they keep it in their car, 25% in a purse and 30% at work. It all stems from a sneaking suspicion that deodorant could work better or has failed altogether. Executives at personal-care companies acknowledge that could be the case, but say many times a shopper has bought the wrong product or is mistaking a weak fragrance for an ineffective deodorant.

“Now more women buy Old Spice, a line typically targeting men, because of how strong its scent is … It is especially popular with women headed for the gym.”

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Dress Local: Starbucks Fashion in the ‘Hood

The Washington Post: “Starbucks employees will continue to wear the green or black aprons that you’re used to seeing when you hit up their stores. But lots of subtle changes are coming to what workers can wear underneath. Previously, they could only wear black, white and khaki clothing; now, the palette is more varied and includes other subdued colors such as blue, gray and brown. And they are now permitted to wear patterned shirts.”

“By giving employees more flexibility in how they dress, Starbucks is trying to distinguish itself from other employers with comparable schedules and wages … But the dress code for any retailer is not just a talent strategy: It’s also about telegraphing a certain feeling to customers. And by allowing more personalized attire, Starbucks seems to be doing something that is in keeping with a broader strategic trend in retail these days. Mega-chains across a variety of shopping categories are trying to make individual stores reflect their local neighborhoods.”

“Starbucks workers in Brooklyn will likely embrace the dress code differently than those in Miami or in a small, Midwestern college town. And perhaps that can give each of the chain’s outposts a more varied, localized feel.”

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Zappos: A Short Story About a Long Call

Business Insider: “A Zappos employee recently had a customer service call that lasted 10 hours and 43 minutes, breaking an internal record at the Amazon-owned online retailer … Steven Weinstein answered a call from a customer who needed some help with an order of a few items. The two began to chat, and even after she was helped, she stayed on the line.”

“Weinstein said he only took one break during the nearly 11-hour period, about two-and-a-half hours on, to go to the bathroom. One of his colleagues brought him food and water during the call.”

“At Zappos, call center employees are trained to use interactions with customers as a way to build relationships, not make a sale. And if a call is going long during a particularly busy time, then it’s up to the employee overseeing the call center to assign more people to calls rather than encourage an employee to end a call early. The last longest customer service call was set by Mary Tennant in 2012, at nine hours and 37 minutes.”

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Meet the Spuglies: Walmart Attacks Food Waste

Quartz: “Shoppers tooling down Walmart grocery aisles now encounter brands that package and sell ugly produce. The ‘Spuglies’ brand markets misshapen potatoes and the ‘I’m Perfect’ brand offers apples that have gone askew. These companies pushing misfit fruits and veggies into the mainstream give consumers a way to fight food waste with their wallets.”

“Since it began tackling food waste within its own system in 2013, the retailer says it has diverted 82% of food that would have otherwise gone to landfills. That amounts to about 2 billion meals. According to ReFED, a food waste advocacy group, a 20% reduction in waste would reclaim the 1,250 calories per capita that goes into landfills each year. That’s enough to feed America’s food-insecure population three times over.”

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Mueller Chocolate: Gross Profits

The Washington Post: “It’s a Saturday afternoon at Philadelphia’s popular Reading Terminal Market … On a busy day like this, Mueller Chocolate might serve 800 customers … As crowds of shoppers move past the Mueller stall, some stop to point, stare and whisper: ‘Oh, my goodness, what is that?’ Well ‘that’ is a display of kidneys (with candy kidney stones), brains, livers, eyes, hands, feet (with almonds as toenails) and noses — all edible, all chocolate.”

“It started, Glenn Jr. recalls, one Valentine’s Day in the late 1990s, when his mother decided that ‘these heart-shaped boxes are stupid.’ She had a mold created based on a drawing of a human heart in her son-in-law’s medical school textbook … When the chocolate heart made national news, orders came in from around he world, he said, and demand hasn’t slowed down.”

“The sweet stuff takes hundreds of forms at the Mueller stall, none more infamous than the chocolate-covered raw onion. It was created in 1983, when the creator of a local children’s television show, ‘Double Muppet Hold the Onions,’ asked the Muellers to make a chocolate-covered onion for Kermit to present to Miss Piggy.” Glenn Meuller Jr. explains: “The chocolate onion . . . is hideous, but we’ve been doing it for 30 years. It changed our trajectory.”

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Cover Story: Fashion That’s Fast But Not Loose

The Wall Street Journal: “In India, consumers want their fashion fast, but not so racy. So, for Cover Story—India’s first domestic fast-fashion chain—that often means censoring international looks … Many Indian women aren’t comfortable showing their midriffs, for example, so Cover Story began layering crop tops … Dresses with deep necks were deemed too daring, so the company’s designers added netting along the neckline.”

“Color is another point of difference: Indian consumers tend to favor brighter colors than Western apparel shoppers. When the Cover Story designers saw black, white and gray striped clothes on the runways they swapped out the shades for blue and red.”

“Cover Story plans to bring fresh styles to its shelves every week. It expects to open 100 outlets in the next five years, particularly in smaller towns where consumers are more likely to find the unedited international styles too provocative. Competing global chains say they don’t plan to open even half that number of stores.”

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Michaels: The Art & Craft of The Retail Experience

“We’re not Apple. We don’t make the new iPhone that people will line up in advance for. We need products that people want in an environment they want to shop in,” says Chuck Rubin, CEO of Michaels, in Forbes.

“Michaels is one of the most surprising retail successes of recent years. It has stuck to transforming its brick-and-mortar stores while almost completely ignoring e-commerce … While the company’s core hasn’t changed–it sells cheap craft supplies–Rubin has modified its stores to make it easier for novice crafters to find items. They’re bringing in more of those types of customers by moving beyond sewing-room basics, adding cooler items, like those coloring books, and Michaels-exclusive products, such as Isaac Mizrahi-branded yarn.”

“The most striking part of Michaels’ success is how it contradicts the digital era’s implied mandate for retailers–that survival hinges on selling online. But Michaels hasn’t wasted millions competing with Amazon.com on e-commerce. It’s grown while focusing squarely on improving what’s within its stores’ four walls … The Web remains a no-man’s-land for Michaels … Rubin knows all that stands between Michaels and Bezos is the in-store experience.”

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