‘Amazon Charts’ Re-Define ‘Best Seller’

The New York Times: Amazon now tracks “not only the top-selling digital and print books on Amazon, but the ones that customers spend the most time reading … With its lists, Amazon aims to redefine the notion of a best seller, expanding it to include books that are ‘borrowed’ from its e-book subscription service, and ones that are streamed on Audible. As a result, the lists give increased visibility to books that might not typically appear on other best-seller lists.”

“All of Amazon’s acquisitions and new features are having a cumulative effect, allowing the company to draw on its vast customer base and troves of data to discover what is popular, and return that information to customers, creating a lucrative feedback loop … Crowdsourcing and data mining are also driving the company’s approach to its bookstores, which act as showcases for books popular with customers on the site. While the stores have traditional categories, like fiction, nonfiction and travel, the most eye-catching shelves feature categories culled from Amazon’s customer data.”

“The first thing customers see when they walk into the store is a large display table, labeled Highly Rated, which includes books with an average rating of 4.8 stars or higher on a scale of 5 … Another display case, labeled Page-Turners, features books that people finish reading on their Kindle in fewer than three days … Another section features the most ‘wished for’ books from Amazon’s website … The books are all displayed face out. Under each book is a card with the average customer rating, the number of reviews and a featured review from an Amazon reader. Displaying the full cover of each book mimics the visual look of Amazon’s website, and might lure customers to unfamiliar titles.”

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Google Eyes: Watch While You Shop

The Washington Post: “Google executives say they are using complex, patent-pending mathematical formulas to protect the privacy of consumers when they match a Google user with a shopper who makes a purchase in a brick-and-mortar store. The mathematical formulas convert people’s names and other personal information into anonymous strings of numbers.”

“The formulas make it impossible for Google to know the identity of the real-world shoppers, and for the retailers to know the identities of Google’s users, Google executives said. The companies know only that a match has been made. In addition, Google does not get a detailed description of the individual transactions, just the amount spent.”

“Google would not say how merchants had obtained consent from consumers to pass along their credit card information. In the past, both Google and Facebook have obtained purchase data for a more limited set of consumers who participate in loyalty programs. Consumers that participate in loyalty programs are more heavily tracked by retailers, and often give consent to share their data with third parties as a condition of signing up. (Not all consumers may realize they have given such consent, according to the digital privacy advocacy group Electronic Frontier Foundation).”

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Movies & Toys: Box-Office Bingo

The New York Times: “With the decline in DVD sales speeding up and the box office stalling on a global scale — even as movies become more expensive to make — studios like Warner for the first time are looking to merchandise as an engine. Film companies will release 25 movies with toy tie-ins this year, according to Bloomberg analysis, up from roughly eight annually in the past.”

“More than ever, consumer products are influencing moviemaking decisions — namely, sequels and more sequels. Retailers are more willing to devote shelf space to tie-in products when there is already proven interest … the opportunity is too great for studios to pass up, and Exhibit A is Disney. Over the last five years, operating income at Disney’s consumer products and video game business has roughly gone from $1 billion to $2 billion … Disney is the world’s No. 1 licenser, with themed products generating $56.6 billion in retail sales last year.”

‘It is not a coincidence that Warner, Universal and 20th Century Fox have turned to Disney veterans to invigorate their merchandise divisions.” Pam Lifford, the president of Warner Bros. Consumer Products, “spent 12 years at Disney Consumer Products, leaving in 2012, when she was an executive vice president … Jim Fielding, former president of Disney Stores Worldwide, took over consumer products at Fox in January. Vince Klaseus became Universal’s consumer products and video game chief in 2014 after a long run at Disney.”

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Michael Ruhlman & The American Grocery

The Wall Street Journal: “Is there any place more American than the supermarket? Forget the airport and the voting booth; for nearly a century, the one-stop shop has remained a temple of consumerism, not to mention our particular form of consumerist anxiety … In Grocery: The Buying and Selling of Food in America” Michael Ruhlman focuses on “his beloved hometown supermarket, Heinen’s Grocery Store, a Cleveland-based chain with 23 locations in Ohio and Illinois. Joe Heinen opened the first one in 1933, three years after Michael Cullen launched ‘the first true supermarket,’ in Mr. Ruhlman’s designation: King Kullen in Queens, N.Y. Heinen, like Cullen, stockpiled meat, seafood, dairy, produce and groceries, often at a discount, under a single roof. (King Kullen’s slogan was ‘Pile it high. Sell it low.’)”

“There are now 38,000 grocery stores in America, some as large as 90,000 square feet. Heinen’s has annual sales of some $600 million—on a margin of only 1.25% to 1.5%, typical of the industry. ‘You do sales of half a billion dollars,’ a Heinen’s executive notes to Mr. Ruhlman, “and you only have profit of $5 million—what kind of a business is that?'”

Now the best grocery stores compete in a crowded marketplace by combining all of the above while becoming obligatory shopping, and even tourist, destinations. Wegmans, an East Coast chain frequently named America’s top grocery, and Central Market, an upscale offshoot of Texas’ H-E-B … have generated the kind of fervent fan bases once limited to sports franchises.” However: “Jeff Heinen fears that the supermarket will eventually go the way of the suburban shopping mall. ‘We’ll be prepared food and specialty products,’ he tells Mr. Ruhlman. Everything else, all those center-aisle products, in his estimation, will be delivered via Amazon.”

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Intuition, Math & The Supermarket Checkout

The Wall Street Journal: “We are used to the standard system of one line for each cashier. But what if there is just one big lane feeding multiple cashiers? … The single queue often snakes around, as lines do at airport security checkpoints. Mathematical queuing theory says that the serpentine system should be faster than separate lines leading to separate cash registers, but only with a condition called ‘no jockeying’—the assumption that people in multiple lines won’t hop over to a different line that has become free.”

“But that isn’t realistic, as we can all attest. If you allow jockeying in multiple lines, the serpentine system is no faster on average. It might intuitively seem faster because you won’t get stuck behind a single person taking a long time, but that same delay is just portioned out among more people, leaving the average wait time the same … In a curious twist, one recent study showed that cashiers work faster when they are serving a dedicated line. Perhaps it instills a sense of pride or connection with the customers waiting for one hardworking cashier.”

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Brendan Proctor: More than a ‘Lidl’ Different

Retail Dive: “We offer the experience of grocery retooled, rethought and refreshed,” says Lidl U.S. CEO Brendan Proctor. Among the differences: “Packaged goods will be placed on shelves in their cartons, eliminating the work that would go into unpacking. Produce displays will not be precariously stacked, making all the fruits and vegetables equally accessible to shoppers. And shoppers will bring their own bags and bag their own groceries, eliminating the cost of paper or plastic bags as well as employees’ time and effort in bagging.”

“Aside from the food items, Lidl plans to differentiate itself through its specials on non-food items … These specials could be anything from yoga pants to lawnmowers to leather jackets.” Also: “The retailer plans to streamline the grocery shopping experience and pare down customer choices. Proctor said that the product selection will be curated so that shoppers will not be overwhelmed with too many choices for staples like ketchup. Instead of multiple varieties of the same product, shelf space will be devoted to different kinds of items.”

“Lidl’s strong global presence makes imports of premium Belgian chocolates and Italian cookies to the U.S. much easier and more affordable. Lidl’s Preferred Selection brand features the flag of the item’s country of origin on the label ,,, For the time being, Proctor said the supermarket chain will concentrate on locations on the East Coast … Lidl will also concentrate on brick-and-mortar stores for shopping. There are no plans to work on e-commerce models, at least for now. People still prefer going to the grocery store over ordering online, he said.”

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Keurig Designs Eco-Friendly K-Cup

The Washington Post: “Keurig Green Mountain said it plans by 2020 to change the plastic composition in the billions of K-cup single-serving coffee containers it sells annually, making them more lucrative to recyclers while removing one of the nagging complaints that mountains of the little pods are piling up in landfills … The recycling breakthrough comes as the Keurig’s single-serve coffee machines, which helped revolutionize coffee consumption, are becoming less of a habit after years of growth.”

“The recycling breakthrough comes as the Keurig’s single-serve coffee machines, which helped revolutionize coffee consumption, are becoming less of a habit after years of growth … The problem with K-cups has been twofold. First, they have been too small for the sorting machines to ‘see’ and move to the recycling line instead of the garbage heap. Second, the material composition of the K-cup plastic did not lend itself to being broken down and reused as another material.”

“Many of the 600 or so recycling plants across the United States and Canada have reinvested in technology that can spot the K-cup pods and divert them toward reuse.”
In addition: “Keurig is in the process of changing the makeup of its K-cups from polystyrene to polypropylene.”

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The Stitch Fix Secret: Make Shopping Easy

The New York Times: Stitch Fix is a mail-order clothing service that offers customers little choice in what garments they receive, and shies away from discounts for brand name dresses, pants and accessories. Despite a business model that seems to defy conventional wisdom, Stitch Fix continues to grow … To the company’s founder, Katrina Lake, success comes down to delivering what consumers want: making it easier to shop … In her view, what was important was helping customers find clothing they liked without taking lengthy shopping trips and returning dozens of items.”

“At the company’s warehouse, Eric Colson, formerly a top data scientist at Netflix, spoke to the role that data science — once the province of high-tech giants — plays in nearly every aspect of the Stitch Fix business. Mr. Colson excitedly illustrated on whiteboards how the company’s systems can narrow down a broad range of women’s pants to a relative few that each individual customer is statistically likely to keep … Algorithms have even cut the number of steps needed for workers to pick out clothes for individual clients.”

“Yet the question remains whether customers who are initially thrilled by receiving a customized box of clothing will remain customers for months or even years … Stitch Fix executives declined to share their retention statistics, but claim that they are above industry averages.”

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Jet.com Tells Fresh Story In Real Life

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Business Insider: “Jet.com — the online retailer that Walmart bought in 2016 for $3 billion — is now selling some of its products IRL. From May 10 to June 18, Jet will have a food-themed concept shop in Manhattan which showcases artisanal accessories, cookbooks, and kitchen appliances. Most of the items are pretty quirky, like face masks made from tomatoes, kale-flavored chocolate bars, socks with ice cream prints, and banana-shaped flasks.”

“The Jet experience comes to life at Story, a 5-year-old retail space that changes its products, decor, and events programming about every month based on its particular sponsor. For the next six weeks, the sponsor is Jet, where people can also find most of the store’s items. The larger goal of the temporary store is to raise awareness around Jet’s grocery delivery service.”

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