Crowdsourced Insights: The New Focus Group

“Crowdsourcing is fast, cheap and scruffy, especially when you need to move quickly,” says Lee Mayer in The New York Times. Chris Hickens of UserTesting, which uses crowdsourcing to get at consumer insights comments: “Crowdsourcing has replaced focus groups. It’s faster and a lot cheaper. Innovation is going so fast that we need faster answers.”

“Josh Gustin, co-founder of the online men’s wear store Gustin in San Francisco, put his own twist on crowdsourcing. He was searching for a better way to sell his handmade wares, which include jeans from denim woven on vintage shuttle looms … The company’s new approach is simple, yet deeply cost-effective. A garment is designed and then posted on the site. If 100 people order it, for example, it goes into production. The result: zero inventory and zero waste.”

Gustin comments: “We suffered through the old retail model and the capital requirements. You can never guess right.” The efficiency realized via crowdsourced insights also enables him to “offer jeans once priced at more than $205 for $81, and a $200 Japanese cotton button-down shirt for $69.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

365: Like A Playroom for Foodies

The New York Times: 365, “the much anticipated new grocery concept from Whole Foods Markets …feels like a sort of foodie playroom. Shelves, racks and refrigerated cases are splashed with bright primary colors and surrounded by exposed insulation and polished concrete floors. All the fixtures are low profile — the highest shelving rises just 72 inches. Electronic terminals are lined up, ready to accept orders.”

“Instead of a human sommelier, there’s Banquet, a wine app developed especially for 365 stores by Delectable. Want a bottle of special Frankies olive oil for $9.99? That’s a so-called green-and-gold product, the name for goods procured and sold exclusively at 365 and only temporarily available.”

The 365 stores will stock roughly 7,000 items, compared with 35,000 to 52,000 for a traditional Whole Foods. Meat is sold only in packages, lowering the cost of offering specialty cuts of meat served up by a butcher. The store will still sell a wide variety of organic produce, though its selection of conventional produce is wider … The 365-branded locations will have about 100 employees, compared with 250 to 500 in a traditional Whole Foods.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Shah & Shah: A ‘Speakeasy-Style’ Jewelry Store

The Washington Post: Colin Shah “has put his family’s jewelry trade in a time machine and turned it back to the speakeasy approach that great-grandfather Izzy used when he ran it in the 1930s. There is no storefront. No marketing. No signs. Shah & Shah boutique lies behind a door on the sixth floor of a downtown office building. You push a doorbell to get buzzed inside.”

“Most customers are referred, which means they come in more positive than fearful … A lot of hustle is involved. Word of mouth means socializing with clients, talking to people, attending parties. Last week, he held an open house with champagne and chocolates for Mother’s Day … Everything is a throwback to the days of personalized jewelry sales. The walls include black-and-white photos of the family’s shops from the past. There is a photo of a young Jack Benny.”

“Shah wants every touch to hint at elegance. He plops down a beautiful silver candy dish filled with Edward Marc dark-chocolate nonpareils. He follows with a bottle of Hildon water, which looks like glass artwork that might be for sale. Most of his business is in creating jewelry for the 2,500 customers on his client list … Shah did more than $2.3 million in sales last year … Profitability can run well into the middle six figures.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Lord & Taylor Is Coming Up Roses

Washington Post: Lord & Taylor “has ordered up a big roster of rose-emblazoned pieces, many of them exclusives from labels like Karl Lagerfeld Paris and Calvin Klein, that are meant to cater to the contemporary, trend-conscious shopper … In addition dresses and blouses, they’ve lined up offbeat items like rose-flavored gummy candies and rose-shaped temporary tattoos. And in some stores, the products will be featured in a shop-in-shop it calls The Birdcage.”

“It’s a major merchandising and marketing effort that executives hope will … telegraph a fresh, contemporary direction … without alienating the loyal shoppers who might fondly remember that the rose was a staple of Lord & Taylor marketing from 1946 until it was phased out over the last 20 years … The idea … to harken back to the company’s heritage … is a tactic retailers across all price points are turning to right now based on the belief that millennials will respond to this kind of storytelling.”

However, “the story of the rose may be so obscure and unfamiliar to young shoppers, it may be hard for them to even understand the collection as an ode to history and heritage.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

The Gucci Experience Goes Up In Smoke

The New York Times: “On Java Road in Hong Kong, a new pair of brown leather Gucci loafers, lovingly wrapped in cellophane, hangs from a storefront — the deal of a lifetime at less than $3. Just not this lifetime. The shoes are paper replicas, meant to be burned as offerings to relatives who have died — a modern twist on an old Chinese custom … But the Gucci handbags and shoes that grandmother may have cooed over when she was among the living now appear to be out of her ethereal reach.”

“It seems Gucci’s zeal to protect its brand extends into the hereafter. Last week, its parent company … sent a letter to six local stores that sell the paper offerings, telling them to stop selling replicas of Gucci products because they were using its famous trademark.” However, a Hong Kong law professor “said Gucci would have a difficult time” making its case. “To successfully sue for trademark infringement … a company has to demonstrate that people confuse the cardboard replicas with real Gucci products, which is highly unlikely.”

“The shopkeepers lament what they see as the absurdity of it all. Their target market — the dead — does not appear to intersect with the well-heeled, or aspiring-to-be wealthy, living and breathing Gucci customers who frequent the outlet’s shops in Hong Kong, one of the company’s top markets. ‘Our customers are totally different,’ said one shopkeeper … ‘They burn these things to send to the spirits’ … Jing Zhang, fashion editor for The South China Morning Post, wrote: ‘The symbolism of a global, multibillion-dollar luxury company ‘warning’ perhaps some of the poorest retailers in the city over items that could not ever be taken for the real thing just seems a little bullying’.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

There’s Nothing ‘Illegal’ About Retail Subscriptions

Bloomberg: “Adore Me is among a group of buzzy Internet retailers accused of sometimes placing customers into unwanted and hard-to-cancel retail subscriptions. Several of these companies have been hit with lawsuits alleging unfair business practices, including JustFab (apparel), Blue Apron (food delivery), and Birchbox (beauty samples). Adore Me is currently facing a lawsuit from a disgruntled subscriber.”

“There’s nothing illegal about retail subscriptions, of course, and many businesses with automatic renewals make the billing process crystal clear. Some services are transparent in their mission and describe themselves primarily as pay-each-month subscriptions, like razor seller Dollar Shave Club.”

“But weak and misleading disclosures are pervasive among subscription e-commerce businesses, says Francisca Allen, the deputy district attorney of California’s Santa Clara County. Allen pursued the JustFab and Stamps.com settlements, both of which included reforms to the companies’ websites. Consumers are losing tens or even hundreds of millions per year on unwanted automatic-renewal subscriptions, she says, and there’s not enough regulatory muscle to monitor and stop unfair practices.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

The Storefront Index

City Observatory: “The Storefront Index “measures the number and concentration of customer-facing businesses in the nation’s large metropolitan areas … by mapping the locations of hundreds of thousands of everyday businesses … and then identifying significant clusters of these businesses—places where each storefront business is no more than 100 meters from the next storefront.”

“The result is a series of maps, available for the nation’s 51 largest metropolitan areas, that show the location, size, and intensity of neighborhood business clusters down to the street level … The Storefront Index helps illuminate the differences in the vibrancy of the urban core in different metropolitan areas.”

For example: “In Portland, there are about 1,700 storefront businesses in a three-mile circle—with substantial concentrations downtown, and in the close-in residential neighborhoods nearby … New York and San Francisco have the densest concentrations of storefront businesses in their urban cores … Maps of the Storefront Index for the nation’s 51 largest metropolitan areas are available online here. You can drill down to specific neighborhoods to examine the pattern of commercial clustering at the street level.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Shakespeare & Co: Amazon Isn’t Its Problem

Wall Street Journal: “Soon after Dane Neller bought Manhattan bookseller Shakespeare & Co. last May, he shut the doors and built the bookstore where he wanted to shop … After Mr. Neller got done tinkering … the store, on Manhattan’s Upper East Side, had a distinctly different look. Space inside the store dedicated to books has been cut by nearly 40% to 1,200 square feet.”

“Mr. Neller … is also chief executive of a company that makes a desk-sized device called the Espresso Book Machine, which prints new paperbacks in five minutes or less. An $85,000 unit is featured prominently at Shakespeare & Co. ‘It’s the secret sauce,’ says Mr. Neller. ‘The machine enables a bookstore to have a much smaller footprint’.”

He “says book sales from September through the end of March are up 10% compared with the same period when the store was under different ownership” and “attributes the gains to better-chosen titles, increased store traffic attracted by the store’s new cafe and the Espresso machine … ‘Amazon isn’t my problem,’ he says. ‘My customer is here because they care about more than price. They want to be greeted, they want a sense of community, and they have a craving for culture’.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Tractor Supply: It Has What Amazon Does Not

Forbes: “The typical Tractor Supply customer owns land, keeps pets, raises chickens and drives a pickup … Tractor Supply has approached retail’s cardinal rule of ‘Know Your Customer’ as both mission statement and math problem, and in the process has become an (albeit unlikely) lifestyle brand, famed for an in-store experience so satisfying that its rustic-chic brick-and-mortar operations are well fortified against the onslaught of consumers who want to buy everything on their smartphones.”

“Tractor Supply has 1,500 locations spread across 49 states; the company plans to open around 115 stores in 2016 and about 120 stores per year after that until 2,500 are in operation, mostly in rural or exurban areas … Roughly 15% of store merchandise is tailored to each ‘hyperlocalized’ market: One Kentucky store may cater to equestrians while another mere miles away carries products for life in coal country … the average 16,000-square-foot Tractor Supply store is manned by a team of 12 to 15 local ‘lifestylers’–the type of people who would shop at Tractor Supply even if they didn’t work there.”

The store’s “exclusive lines ensure that customers can’t find an item cheaper on Amazon … Not that Amazon is a big concern. Less than 1% of Tractor Supply’s revenue comes from e-commerce, and increasing that number isn’t a top priority. Physical stores and a deep connection to the countryside remain at the company’s core.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Upgrade Downgrade: Bad News for Apple’s iPhone

The Wall Street Journal: “The death of the two-year cellphone contract has broken many Americans from a habit of routinely upgrading their smartphones … Citigroup estimates the phone-replacement cycle will stretch to 29 months for the first half of 2016, up from 28 months in the fourth quarter of 2015 and the typical range of 24 to 26 months seen during the two prior years.”

“Since the early days of Apple Inc.’s iPhone, most customers have avoided paying for the full price for the latest model. But the success of AT&T Inc. and Verizon Communications Inc. since 2013 in shifting customers into plans that force them to pay the full price for devices—and separate that cost from monthly service fees—has consumers holding on to their devices longer.”

“Analysts see the longer device life as positive for the carriers because it could lead to fewer service cancellations or defections in the competitive industry … The longer upgrade cycle lowers equipment revenue for the telecom companies, but Verizon’s Chief Financial Officer Fran Shammo argued last month that the top-line shift is painless … The shift isn’t as benign for Apple. BTIG analyst Walter Piecyk recently cut 10 million units out of his fiscal 2016 and 2017 iPhone estimates because of shifting upgrade rates in the U.S.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail