JC Penney To Display Dresses Like Oreos

The Dallas Morning News: “What does a $2.49 package of Oreo cookies have to do with a $24.99 colorful summer dress? … A prominent display of Oreos in the supermarket includes pictures of the cookies, maybe with milk, and a discounted price in big print. Then there’s a rack of cookies right there. If you had to hunt down the Oreos, you might forget about them.”

At Penney’s, a “rack of dresses will be right behind the mannequins where shoppers can find them. Plus there’s a big sign with the price.”

“We’re making it as easy as possible to buy the dress,” says JC Penney CMO Mary Beth West, who “spent most of her career in the consumer packaged goods business devising ways to get us to spend billions of dollars on brands such as Ritz, Philadelphia, Nabisco, Kraft Mac & Cheese, Jell-O and Cool Whip.”

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Macy’s Simplifies Its Shopping Experience

The Washington Post:”This week, Macy’s announced that it is shaking up its discounting practices: The coupon system will remain in place for full-priced items, but the retailer is implementing a different strategy to get shoppers to pounce on its clearance merchandise. The move is effectively a bet that shoppers prefer simplicity over the thrill of demonstrating their shopping savvy.”

“Here’s how Macy’s new approach works: When an item is on clearance, you can’t apply coupons or other discounts to it. Macy’s said it will apply deeper cuts to the ticket price than it did previously, but the price you see on the tag is the price you will pay. The retailer has also moved all the clearance items to a centralized area in the store — one for men’s apparel, one for women’s — instead of having the racks scattered throughout the store. So far, Macy’s has seen upbeat results from the change.”

“In a conference call with investors this week, Macy’s chief financial officer Karen Hoguet offered this explanation for why the change was getting traction: ‘I think what happens is, customers want simplicity. And when you are looking for deep clearance goods you could just see the price of the item and not have to do the math in your head. And it’s easier.'”

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Bluetooth Can Be a Driving Headache

“The road to the autonomous future, it seems, is not as smooth as it appears,” The New York Times reports. “Problems related to cars’ rapidly advancing technology are now at the top of the list of consumer complaints, according to the 2016 J. D. Power Vehicle Dependability Study.”

“The biggest issues are balky voice recognition systems and problems with Bluetooth pairing, accounting for 20 percent of all customer complaints. Over all, the discontent drove a 3 percent decline in vehicle dependability in the study … Complaints about technology have gone from being fifth most troublesome in the 2014 study, to third last year, to now being first.”

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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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Zappos Pushes for National Leap Day … Day

Fast Company: “On February 29, everyone at Zappos will get a paid day off. It’s the first time, since the company opened, that its call center—normally open 24 hours a day, all year—will ever close. Their reasoning: Leap Day is extra time, and we should probably use it for something we normally wouldn’t do.”

“On Change.org, the company is leading a push to get 100,000 signatures on a petition to make Leap Day an official national holiday. Because the petition only ensures that congress and the president will have to consider the idea—and they’ll still need support—they’re also trying to convince other companies to give employees a paid day off, and pushing for states to adopt it as a holiday too.”

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Does Diversity Fuel Innovation?

The Economist: “Ronald Burt, a sociologist at the University of Chicago, has produced several studies which suggest that people with more diverse sources of information consistently generate better ideas … And internal surveys at Google have found that diverse teams are often the most innovative.”

However: “Diversity does not produce better results automatically … It does so only if it is managed well. (Source: David Livermore, author, Driven By Difference). The biggest challenge is to do with trust. Employees need to trust each other if they are to produce their best work … it is easier to establish trust with those you have a lot in common with … Diverse teams … are more likely to produce truly innovative ideas, but they are also more likely to fail completely.”

“A second challenge is to do with culture. Too many companies fail to rethink their management styles as they open their doors to new groups. They issue ambiguous instructions which presume that everyone comes from the same background … They evaluate people on their willingness to speak up without realising that some people—women especially, in many countries—are brought up to hold their tongues and defer to authority.”

“It is easy for companies to think that they have embraced diversity if they appoint the right number of people with the right biological characteristics. That can be hollow if they all come from the same backgrounds … Companies will find it hard to make a success of diversity if they refuse to recognise that it brings challenges as well as opportunities.”

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Is Creativity a Fruit of Dementia?

The Wall Street Journal: “There are several theories on the connection between dementia and artistry. The first involves the prefrontal cortex, contained within the frontal lobe, home of high-level analysis and planning. When the region is damaged in frontotemporal dementia, people stop filtering their behavior and let go of their inhibitions. In the absence of the prefrontal lobe’s self-monitoring, an underlying creative drive emerges.”

“By looking back at the brains of these patients, researchers have found that most of the damage is on the left side—leading to a second theory. Many studies have shown that while the left brain is more analytical and calculating, the right hemisphere is better at interpreting visuospatial relationships and, by extension, creating artwork. When the previously dominant left hemisphere is damaged, the visuospatial faculties of the right hemisphere rise to prominence.”

Also: “It turns out that psychologists have noticed the prevalence of artistic talent among dyslexic children. Studies of university students further reveal high rates of dyslexia among art students. Based on studies of the writing of Leonardo da Vinci, Jackson Pollock and Andy Warhol, some scholars believe they were dyslexic.”

“With further study, we may come to confirm traditional lessons on how to harness creative potential—by releasing our inhibitions, not overthinking, and engaging in free association.”

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Samsung: Retail as a ‘Cultural Center’

Samsung’s NYC flagship store — Samsung 837 — is a “cultural center” that is designed “to build experiences rather than push product,” reports Engadget. “Across three floors you’ll find a 75-seat amphitheater, a full working kitchen and plenty of bench space for tech support and workshops. The amphitheater hosts a three-story interactive screen that was used for an art installation this week, but will be repurposed for screenings and presentations as well.”

“The ground level art gallery showcases works that use technology in a major way. The current exhibition, ‘Social Galaxy’ by Black Egg, contains a mirrored tunnel lined with Samsung devices. Users input their Instagram handle at the entrance and then, within seconds, the displays pull in images and comments from their accounts, creating a rapid cacophony of sound and color.”

“A set of chairs in the front of the store offer up a ‘4D’ virtual reality experience, by having you strap a Gear VR to your face as you sit in a chair that bobs in time whatever you’re looking at … Samsung 837 sourced a lot of its style locally as well. The employee uniforms came from designer line Rag & Bone, which has a location right across the street. The store also has a partnership with the nearby Standard hotel. Samsung 837 considers itself part of the Meatpacking District community, as well as a destination for both tourists and locals.”

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The End of Average

The New York Times: “We march through life measuring ourselves on one scale after another, from developmental markers through standardized tests and employment evaluations, cardiac risk and bone density scores. Not to mention the ready-made clothes that never fit anyone quite right. Does it have to be that way? … Absolutely not, says Todd Rose in The Age of Average, a subversive and readable introduction to what has been called the new science of the individual.”

“For educators, it’s all those brilliant underachievers (not to mention all those idiots with Harvard diplomas). For doctors, it’s all the outliers who survive dire disease predictors — or even dire diseases — decades beyond expectation … For human resource personnel, it’s the new hires who satisfy every single one of a dozen standard criteria and yet utterly fail to perform.”

The author cites “the not-unfamiliar notion that all human characteristics are multidimensional, not only in specifics but also in time and context. Reducing this mass of data to a single simple variable (as in a ‘slow’ toddler, an ‘aggressive’ teenager, a ‘prediabetic,’ a Harvard graduate) may well result in a set of flawed conclusions.”

“In other words, big data may have landed us in the Age of Average, but really enormous data, with many observations of a single person’s biology and behavior taken over time and in different contexts, may yield a far better understanding of that individual than do group norms.”

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