REI-mania: Flagship Store Was Beatles Arena

The Washington Post: “The vaulted, concrete-domed Uline Arena in Northeast Washington” is now the “East Coast’s largest REI store, a popular outdoor specialty chain that hopes to become a destination in the nation’s capital … Ice distributor Miguel Uline opened the eponymous arena in 1941 as a hockey rink and repurposed it into housing for service members during World War II. After the war, it was restored as a hockey and basketball arena … it was 1964 when the arena … made its biggest headline: The Beatles performed their first U.S. concert there shortly after their famed ‘Ed Sullivan Show’ appearance.”

‘Throughout the 1990s, the arena served as a trash-transfer station until Douglas Development purchased the property in 2004 … The 51,000-square-foot REI store now joins a changing NoMa landscape filled with luxury condos, office buildings and retail shops.” Norman Jemal of Douglas Development comments: “This is transformative. We looked at it as a game-changer for the community. You’re talking about a lot of history here. A lot of Washington, D.C., here. It touched a lot of people.”

“As an ode to the arena’s history, columns throughout the store are covered with concert posters of the Beatles, go-go bands and artists who performed there. One wall contains rows of seats from the original basketball arena … The store has event rooms, a courtyard and a La Colombe Coffee cafe. The National Park Service also has a kiosk inside, where an employee from the federal agency will be on hand to recommend outdoor travel destinations to customers.”

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Grocers Trust Their Gut When Buying Stock

The Washington Post: “Blue Yonder, a retail tech company, surveyed 750 grocery managers and directors in the U.S., U.K., Germany and France … The most disturbing metric: 48 percent said they use a ‘gut feeling’ when making inventory decisions … The study also found a quarter of grocers feel they are not delivering at the speed that their customers require–not a great sign in an age where customers are becoming more and more demanding for speed and convenience and would have little patience for stores running out of stock.”

“Losing customers is one risk of not automating. But there are other costs. For example, according to Blue Yonder’s research report 4 million tons of food is wasted each year by the grocery industry in the U.K. alone. That translates into a big cost in what is historically a low-margin business.”

“Adding even more pressure to the typical small grocer is this week’s rumors that Amazon it is entering the brick-and-mortar grocery business. You can bet the managers at Amazon will not be making their inventory decisions based on a ‘gut feel.’ They’ll be using data and automation. Lots of it.”

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The Temple of the Muses

Literary Hub: “Today, few people are likely to remember James Lackington (1746-1815) and his once-famous London bookshop, The Temple of the Muses, but if, as a customer, you’ve ever bought a remaindered book at deep discount, or wandered thoughtfully through the over-stocked shelves of a cavernous bookstore, or spent an afternoon lounging in the reading area of a bookshop (without buying anything!) then you’ve already experienced some of the ways that Lackington revolutionized bookselling in the late 18th century.”

“The Temple of the Muses, which was one of the first modern bookstores, was a mammoth enterprise, by far the largest bookstore in England, boasting an inventory of over 500,000 volumes, annual sales of 100,000 books, and yearly revenues of £5,000 (roughly $700,000 today) … Lackington wanted to find a way to make books more affordable and accessible while still turning a profit, and with this in mind, he set about revolutionizing the book trade in at least four ways. His first innovation was to eliminate a staple of 18th-century commercial life: credit. He ran a cash-only business.”

“His second innovation had to do with his handling of remainder sales … Lackington bought huge lots—sometimes entire libraries—and then drastically reduced the prices of all the books in order to sell them at high volume … Lackington’s third innovation will be familiar to anyone today who loves a bargain: he convinced his customers that they were getting a deal by refusing to haggle over prices … He named the shop The Temple of the Muses, and above the entrance a plaque boldly announced: Cheapest Bookstore in the World. The Temple of the Muses became a tourist attraction, and this was Lackington’s fourth innovation: the sheer size of his bookstore—a spectacle that dwarfed all other bookshops of the time—made it a destination in itself.”

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Abercrombie & Fitch Tries ‘Inclusion’

The Wall Street Journal: “Abercrombie & Fitch, once the mean girl at the mall, wants shoppers to know it has grown up. The brand that drew teen fans to its stores with shirtless male models, dim lights and heavy perfume is cleaning up its image amid a sharp drop in sales. With a new marketing campaign, and a redesigned logo and website … Abercrombie hopes millennials who knew the brand in high school will give it another chance.”

“What was cool in Abercrombie’s heyday is decidedly out of fashion now. Today’s teens embrace diversity and reject anything that resembles bullying … like a teen culling her Instagram posts after a breakup, Abercrombie is deleting all existing pictures on its website and social-media channels.”

“New pictures will feature brighter lighting, looser styling and a more optimistic mood … Abercrombie plans a new store prototype for 2017; meanwhile, it’s making changes at existing locations … Shoppers can expect more variety within the brand’s jeans, jackets and sweaters” … Abercrombie’s Fran Horowitz comments: “We are a positive, inclusive brand, with a nice sensibility, very different from what they encountered in the past.”

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Brilliant Books: How Local Goes Global

The New York Times: “When Peter Makin opened Brilliant Books five years ago, he quickly realized his business wouldn’t survive in this remote locale if his only customers were local buyers … he believed that online buyers would flock to Brilliant Books if they experienced the same customer service that shoppers in his physical store do … He began offering free shipping … and hired a full-time social media manager, who promotes the store and has used Twitter and Facebook to talk to readers who would never find themselves near Traverse City.”

“One of his most successful ways of getting repeat business is his store’s version of a book-of-the-month program, which makes personalized recommendations for each of its nearly 2,000 subscribers every 30 days. Rather than use an online form to track preferences, Brilliant sends each new subscriber a customer card to fill out by hand and mail back. Employees then scan the card into the system so that when it is book-selection time, they can see what the customers said they liked and how they said it.”

“Once the selections are made, the back-end system orders books from the publishers and prints postage and address labels. After the books arrive, the staff mails personalized packages. The investment is paying off: Sales are up 14 percent this year, and Mr. Makin anticipates that 30 percent of Brilliant’s sales will come from online orders — doubling last year’s total. Facebook customers buy more nonfiction titles, while Twitter conversations generate more sales of young adult and children’s books.”

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Innovation & The Theory of Jobs To Be Done

The Wall Street Journal: “Businesses succeed when they help people do certain jobs. They fail when they lose sight of what that job is … Jobs are defined by the customers who hire companies to do them. The jobs are … expressed in verbs and nouns, not adjectives and adverbs. Some of the most successful companies in the world … are those whose very names have become synonymous with the job they help you do, such as Google, Uber, Xerox and TurboTax.”

“By contrast, ‘I need to have a chocolate milkshake that is in a twelve-ounce disposable container’ is a preference that confines both the customer and beverage provider to the milkshake category … The job customers ‘hire’ the breakfast milkshake for is … ‘I need something that will keep me occupied with what’s happening on the road while I drive. And also, I’d like this to fill me up so that I’m not hungry during a 10:00 a.m. meeting’ … Putting it that way forces drive-through owners to think much more broadly about what’s for breakfast.”

The Theory of Jobs to Be Done, as presented in Competing Against Luck by Clayton Christensen, et. al., recommends “creating internal processes that flex according to the needs of the job to be done, not the needs of the organization. When you buy something on Amazon, it will tell you something along the lines of: ‘If you order within the next 2 hours and 32 minutes, you’ll receive your product Tuesday.’ That isn’t Amazon simply trying to keep you posted. It’s a way to force the company’s internal processes to stay focused on what matters to the customer—the basic, all-too-easily forgotten job that customers need done.”

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Scrip: Pain in the Cash

Quartz: “Research indicates that paying with cash can actually feel painful—and thus act as a deterrent to mindless spending. It’s also long been shown that consumers spend more (and are often willing to pay more for the same items) when they’re paying with a credit card because money feels much more abstract.”

“One firm believes that it can help people stop buying useless things by making cashless transactions feel more tactile. Scrip is a small copper-colored digital payment device designed to mimic the experience of paying with cash. Currently a concept, the device was created by the firm NewDealDesign, which is behind the design of Fitbit’s wearables.”

“To make a payment, a person would swipe his or her thumb over the device in a manner similar to counting bills. The device then shows the account’s updated balance … Gadi Amit, the founder of NewDealDesign … came up with the concept for Scrip when he noticed his teenaged daughters were often out of funds, something that wasn’t a problem when they were younger and used only cash for purchases.”

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Queue Theory: The Science of Customer Service

The Wall Street Journal: “Imagine three lines feeding three cash registers. Some shoppers will have more items than others, or there may be a delay for something like a price check. The rate of service in the different lines will tend to vary. If the delays are random, there are six ways three lines could be ordered from fastest to slowest—1-2-3, 1-3-2, 2-1-3, 2-3-1, 3-1-2 or 3-2-1. Any one of the three (including the one you picked) is quickest in only two of the permutations, or one-third of the time.”

“Queues can be trivial, like a line at an ATM, or they can be serious, like a list of people waiting for an organ transplant … A basic queue funnels clients demanding service to one or more servers who respond. If the servers are busy, other demands must wait. The clients may include a line of people, a series of 911 calls, or a string of commands issued over a computer network (think of a printer queue). The servers are the cashiers, the dispatchers or the devices that respond.”

“Queuing theory helps untangle the mess of requests, or at least smooth it out, by estimating the number of servers needed to meet demand over a given period and designing rules for advancing the queue. The best system depends on the situation. ‘First come, first served’ is most familiar, and people often prefer it because it seems fair. But most also accept that a heart attack should take precedence over a sprained ankle or someone with five items shouldn’t have to wait behind a procession of brimming shopping carts.”

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The Branding of ‘Bodega’

The Wall Street Journal: “Bodegas are hot. Yes, the humble corner stores, with their grouchy cats and reams of toilet paper, are fast replacing the taxi and the bagel as a symbol of New York authenticity, lending urban credibility to any endeavor. There’s Bodega, the clothing line, and Bodega, an art gallery on the Lower East Side. Not to mention the Bodega, a wine bar in Bushwick, and Bodega Pale Ale, a craft beer only distributed in New York. Bodega 88, a sports bar, opened in August on the Upper West Side, in a former bodega.”

“Bodega Magazine, ‘your literary corner store,’ is an online monthly … Managing editor Cat Richardson says each issue provides a quick, accessible hit of contemporary fiction, poetry and creative nonfiction, with a few surprises thrown in. ‘It has everything you need, like toilet paper, and then something unexpected,’ she says … Mark Littman, founder of Bodega Studios, a video-production agency with offices in Chelsea and San Francisco, says the outfit’s name is a nod to its New York roots and personalized service.”

Bodega Pizza “co-founder Jose Morales, who grew up in the neighborhood working in his father’s bodega, remembers corner stores where everyone gathered to drink and play the Dominican lottery … The facade of his pizzeria … is a yellow metal awning featuring a traditional bodega’s red lettering and flashing bulbs. The front windows are stacked with green tins of Keebler Export Sodas Crackers, pillar candles and faded Brillo boxes. Mr. Morales … says he’ll soon offer groceries along with the pizza. ‘You can eat a nice pie, have a beer and go home with some soap, cereal and toilet paper,’ he says.”

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Wing on Wo & The ‘Wow’ Project

The New York Times: “Wing on Wo’s humble red-painted storefront at 26 Mott Street is said to be the oldest continuously run business in Chinatown. It opened on Mott as a general store in the 1890s … The family that established Wing on Wo more than a century ago still runs things … although the shop’s appearance doesn’t suggest any important heritage. Its shelves are dusty, its pace is sleepy and foot traffic is slow.”

“Wing on Wo’s salvation appeared in Mei Lum, 26, the second-youngest of the family’s five grandchildren … She is now reinventing the shop, molding it into a community space that operates against the backdrop of Chinatown’s history … she envisions a forum for panels on issues like neighborhood politics, exhibitions for local artists and a coffee shop. Ms. Lum held an event recently at the store on the neighborhood’s gentrification, and a planned panel will include influential businesswomen from Chinatown. She calls her concept the W.O.W. Project.”

“Ms. Lum’s new vision for Wing on Wo, ironically, resembles the store’s original incarnation over 100 years ago … General stores like Wing on Wo were crucial hubs in this early village-like stretch. They sold tastes of home like dried fish, herbs and tofu, but they also operated as social clubs, representing Chinese villages and counties, and provided mail and money-wiring services.”

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