Connie: Hilton’s Concierge Robot

“Concierge is getting a robotic makeover at one Hilton Hotels location,” reports The Christian Science Monitor. “The McLean, Va., Hilton is the site of a pilot program featuring a robot concierge. The new hire stands in at two-and-a-half feet tall and has been placed on the desk beside human reception staff. More than just a shiny piece of equipment, the robot’s brain is packed with artificial intelligence.”

“Connie, named after Hilton founder Conrad Hilton, is a partnership between Hilton Worldwide and IBM. The brains behind the robot are IBM’s artificial intelligence program Watson and another partner program called WayBlazer, imbuing the new concierge with enough AI to carry on conversations with guests and answer questions about the local area.”

“Connie’s body, though small, is also designed to help it serve. The body is based on the Nao robot designed by Aldebaran, with fully functional arms and legs and eyes that change to express humanlike emotions … Is the future of Hilton concierge robotic? Definitely not, according to Jim Holthouser, Hilton vice president of global brands.”

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Customer Service Declines When The Economy Improves

Quartz: “Consumers are more unhappy with customer service at department and discount stores than ever. According to the University of Michigan’s American Customer Satisfaction Index, satisfaction is at its lowest level since 2008, falling during the last year by 3.8%. Consumers are griping about store cleanliness and slow checkout lines, specifically.”

“Of the bigger companies, the steepest decline in satisfaction—an 8% drop—went to Macy’s … While an improving housing market increased competition between Lowe’s and Home Depot, both groups saw drops of 9% and 4%, respectively. Among supermarkets, Whole Foods took a 10% hit, knocking its ranking below Trader Joe’s, Kroger and Meijer.”

“The relatively buoyant economy is partly to blame. After 2008, competition for consumer dollars intensified, prompting discounts and better service. Employees fearful of losing their jobs stayed motivated to work hard pleasing shoppers. Then, things got better.”

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Loyalty Is a Two-Way Street at Starbucks

What defines loyalty in the customer-brand relationship? Until this week, Starbucks defined it as the number of times the customer bought a cup of coffee; buy 12 cups and you get one for free. The retailer has now re-defined loyalty as the amount of money spent. This has caused upset among some of its “loyal” customers, who now must purchase 32 cups of coffee to get that free cup. Starbucks apparently was inspired by certain airlines — Delta and United — that now award loyalty points based on the amount of dollars spent, and not on the number of miles traveled. This might telegraph as: We want your money but we don’t want you.

The Starbucks switch was at least partly motivated by profits; obviously it is more profitable to motivate its most profitable customers. However, it also suggests a change in culture. As reported in The New York Times, the Starbucks loyalty program previously was premised on a warmer, fuzzier idea, as articulated by a Starbucks marketing manager in a 2012 blog post: “At Starbucks, our rewards program comes from a different philosophy. At its simplest, we like seeing you, regardless of whether your purchase is a short-brewed coffee or four Venti White Chocolate Mochas. My Starbucks Rewards is designed to show our appreciation simply for stopping by.”

This would be consistent with the way Starbucks famously welcomes everyone to hang out as long as they like at their stores, even if they buy nothing at all. Sadly, such “customers” are the poor cousins of those who gamed the Starbucks loyalty program by asking cashiers to ring up each item separately to artificially inflate their number of visits. This subterfuge also caused lines to slow, making the Starbucks experience worse for everyone else.

The Starbucks-customer relationship in total calls into question the very meaning of “loyalty,” and whether it even exists in a commercial context. As the Times article notes: “Starbucks fell into a trap that is common with loyalty programs: establishing not just an exchange relationship with its customers based on mutual benefit, but a communal relationship based on mutual caring and support … If customers are going to take a ‘hey, it’s just business’ approach to their relationship with Starbucks, they should expect the company to do the same — and it has.”

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Fresh Air: Glade Discloses Ingredients

Huffington Post: SC Johnson is “the first major player in the household chemicals industry to list 100 percent of the ingredients used to create fragrance in one of its lines of scented products, the Glade Fresh Citrus Blossoms collection of wax melts and air fresheners. That includes the chemicals ordinarily glossed over with catch-all phrases like natural ingredients or essential oil.”

“Its goal, in part, is to create a new standard of transparency that would challenge upstart competitors, who sell themselves as greener alternatives, to disclose every single component in their fragrances.”

“It’s important to lay it all out there for the scrutiny of the world what goes into our products if consumers are going to trust us,” says Herbert Fisk Johnson III, the company’s chairman and chief executive. “In the absence of information, people tend to think the worst.”

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The Future of Shopping May Be Underground

Tech Insider: Garden Santa Fe, a 7-story-deep underground shopping mall in Mexico City, is a peculiar hybrid of basic infrastructure needs and a re-envisioning of contemporary retail. At a time when urban real estate is a precious commodity, going underground might just be the future of shopping … The Garden Santa Fe Mall has … circular courtyards, complete with live trees at the bottom and second level of the mall, providing a release from what would otherwise be a claustrophobic environment.”

“The presence of three full story glass atriums essentially brings the outdoors to the underground … The entire building is buried 7 stories deep, making heating and cooling much more energy efficient. Overall, the mall uses 60% of the energy of a comparable retail space. An extensive rain collection system and onsite grey water treatment and water reuse system make a similar impact in water consumption.”

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Wild Turkey Inks an Older, Prouder Bird

Bottles of Wild Turkey bourbon and rye whiskey now feature an older, prouder bird, reports The Wall Street Journal. The newly redesigned labels cap a $100 million expansion and modernization of the Wild Turkey distillery, following its acquisition by Gruppo Campari.

Campari marketing vice president Melanie Batchelor says the previous turkey looked “a little sad … not proud.” Consumer research also found that the turkey looked too young, which “conflicted with the idea that the bourbon is aged.” The new illustration is “more of a close-up image, with prominent eyes and fluffy feathers.”

“Wild Turkey also wanted to better highlight its master distillers, Jimmy Russell and his son, Eddie,” whose “signatures are now larger and on the fronts of the bottles, rather than the necks … Bottles also include the words ‘Crafted With Conviction’ … They wanted to avoid using ‘handcrafted,’ a phrase Ms. Batchelor feels has become so common in the spirits industry that it sounds generic.

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Less is More: Soda Pops as a “Cheap Treat”

The Wall Street Journal: “In some ways, the soda industry is returning to its early 20th century roots, when bottles were typically about 6 ounces and pop was a treat saved for a special occasion. It wasn’t until 1976 that 7-Eleven Inc. launched the 32-ounce Big Gulp at its convenience stores.”

“Now, once again, American soda drinkers ‘want to consume less but they still enjoy their favorite brands,’ said Marty Ellen, Dr Pepper’s chief financial officer. Dr Pepper is rolling out 7.5-ounce cans nationally this year, replacing 8-ounce cans it launched as an alternative to 12-ounce cans. Each 7.5-ounce can holds about 95 calories, compared with 150 calories for a 12-ounce can.”

This works out well for soda companies, which have stemmed losses by charging more for less: “At a Publix supermarket in Atlanta recently, a 12-pack of 12-ounce Coke cans was priced at $5.29, or 3.67 cents per ounce. An 8-pack of 7.5-ounce cans was priced at $3.99, or 6.65 cents per ounce.”

Mr. Ellen says the higher cost per-ounce aligns with consumer behavior because soda is still a “cheap treat.”

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Loyalty & The Late Adopter

Those who are slower to adopt new products or services tend to be more loyal to their choices, reports The Wall Street Journal.

Typically, a late adopter is “a person who buys a product or service after half of a population has done so. Late adopters tend to share certain characteristics: They are skeptical of marketing and tend to point out differences between advertised claims and the actual product. They often value a product’s core attributes, ignoring the bells and whistles intended to upsell the latest model. They may not try something new until weeks, months or even years after the crowd has moved on.”

“It takes a long time to change late adopters, but once they’ve done all that research, and once they are convinced about a product, they are going to stay for a long time,” says Sara Jahanmir of the Nova School of Business and Economics in Lisbon.

Late adopters are also believed to have “important things to tell companies about the role new products should play. Because they tend to be highly critical, late adopters can be useful to companies perfecting their wares … By listening to late adopters of the old version of a product, developers can create a new version that is quicker to be adopted.”

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