Virtual Eateries Put the ‘App’ in Appetizer

The Wall Street Journal: “Tucked inside industrial parks, commissary kitchens and refitted basements in cities like New York, Chicago and San Jose, these restaurants have no dining room, no wait staff, no takeout window and no signage … Many don’t take orders over the phone and are accessible only through online services like Grubhub, DoorDash or Postmates. Virtual restaurants, with their low overhead, are allowing restaurateurs to shift away from the capital-intensive model that kills 60% of new restaurants in their first five years toward something decidedly more techy.”

“Virtual restaurants tap into a larger trend: Americans’ increasing aversion to cooking for themselves. For the first time ever in 2016, Americans spent more at eating and drinking establishments than on groceries, according to U.S. Census data. The food-delivery market is a small slice of that sector: It is only $30 billion in 2017, but Morgan Stanley estimates it could balloon to $220 billion within a few years.”

“The fundamental challenge that all these players are trying to solve is that prepared food remains one of the least-scalable businesses in our economy: Production has proved resistant to automation, the materials themselves are highly perishable and swiftly changing consumer tastes can destroy momentum. A typical internet startup can go from 3,000 customers to 3 million customers just by spending more on Amazon Web Services. No restaurant can do the same.”

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The Huarache: When Weird is Beautiful

Quartz: “The Nike Huarache almost never existed. The shoe, made of a sock-like bootie encased in a supportive exoskeleton, was definitely unusual when Nike began showing around the prototypes in the early 1990s. Practically nobody placed orders, and Nike seemed to have little choice but to kill the idea. Lucky for Nike, one product manager didn’t listen … the Huarache has become Nike’s top-seller globally.”

“The shoe dispensed with a number of conventional ideas in sneaker design. It had no heel counter—the firm backing of the shoe that wraps around your heel to support it—opting instead for the distinctive, harness-like strap, similar to a sandal. (A ‘huarache’ is a kind of Mexican sandal.) It also used neoprene, which had never before been done in a running shoe … when no one placed orders after seeing the prototypes, Nike decided not to make the shoe for release.”

Tinker Hatfield, who designed the shoe picks up on the rest of the story in his new book, called Sneakers: “But one of our product managers actually thought it was awesome, and without proper authorization, he signed an order to build five thousand pairs even though there were no orders. He stuck his neck way out there. He saw what I saw. And he took those five thousand pairs to the New York Marathon, not a place you typically went to sell shoes, and he sold them all in like three days at the exhibition hall right there near Times Square. Word got out. They went like hotcakes. In a month, we went from zero orders to orders for half a million pairs.”

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V8 & Mr Peanut: Iconic Brands No More?

YouGov BrandIndex: “Two of the most well-known legacy supermarket products — V8 Vegetable Juice and Planters Peanuts — show significant declines in multiple consumer perception metrics over the long-term … From 2013 through the present, both of these brands have suffered their own distinct issues, and one big shared one: millennials.”

“Both V8 and Planters Peanuts are seeing their levels steadily eroding over the past four years, almost entirely brought down by millennials. 94% of all consumers were aware of V8 in January 2013, slipping down to its current 85%. Planters took a steeper drop of 17 percentage points, dropping from 95% down to 78% over the same time period … Millennials change the picture entirely, especially for Planters Peanuts: V8 is down 14 percentage points (from 86% awareness to 72%) with the younger crowd, and Planters Peanuts sees a 32 percentage point fall (from 83% awareness to 51%).”

“V8’s Value and Quality perception with overall consumers has also been falling steadily since 2013. Except in this case, instead of millennials, adults 50 and over dominate the growing negative numbers behind these two metrics, perhaps having been priced out of purchasing the vegetable juice. Consequently, Purchase Consideration by boomers of V8 has declined as well: the juice went from 43% of adults 50 and over considering buying V8 the next time they were purchasing a beverage to 33% now.”

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Clubhouse Culture: How Houston Solved Its Problem

The Wall Street Journal: “Under Jeff Luhnow’s stewardship, the Houston Astros developed into the industry’s most analytically driven organization, relying almost entirely on data to navigate through a full-blown rebuild … But for all of their bold ideas, the Astros too often forgot about one important aspect: their players.” However a willingness to embrace “the value of chemistry and culture paid enormous dividends in 2017: The Astros won the World Series, their first since the franchise’s creation in 196.”2

“It represented a subtle, but crucial shift in the Astros’ thinking. Though numbers remain their focus, the driving force that propelled them from the bottom of the standings to the pinnacle of the baseball universe, Luhnow learned a lesson along the way: To deny the significance of chemistry ignores a critical component of the equation that equals a championship roster.”

“For sure, the Astros didn’t revolutionize the concept of caring about chemistry. The Chicago Cubs, the World Series champions in 2016, also prioritized traits they could not measure in players. Few expected the Astros to do the same. Now, however, they will parade down the streets of downtown Houston as champions.” Luhnow comments: “Culture is a hard thing to really quantify. But when you see it you know it’s there.”

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Tiny Houses: New Media for Big Brands

The New York Times: “The tiny house … is catching the attention of corporate America and entrepreneurs nationwide. Businesses are piggybacking off the trend, wooing customers and solidifying their brands … In December, the developer of Mountainside at Northstar in Lake Tahoe, Calif., unveiled Rendezvous Cabins, a set of three 400-square-foot homes … prospective buyers of homes in the development can spend a night in a tiny house or model home to experience the neighborhood. The plan seems to be working: About 90 percent of the visitors become buyers after experiencing a weekend there.”

“Tiny houses are also used to help companies bolster their presence on social media sites like Instagram, Snapchat and Facebook. This summer, Hormel, the maker of Spam, sponsored a Tiny House of Sizzle Tour with an ornate unit painted in blue and yellow. The home on wheels made stops at festivals, malls and ballparks, where company representatives handed out samples as people took pictures inside and marveled at the Spam souvenirs.”

“Untuckit, a New York apparel retailer that specializes in untucked shirts, hauled a tiny house that resembled one of its stores throughout the East Coast in 2016, stopping at universities and in small towns. The aim was to expose Untuckit to more consumers and determine where to open locations, said the company’s chief executive and co-founder, Chris Riccobono. ‘If we sold shirts, that was a bonus,’ he said.”

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Fake Meat: Growing Bloody Fast

Business Insider: “Fake meat is a fast-rising food category that could change the way we eat. It replaces animal products with alternatives made from plants that look and taste like meat, with the goal of reducing the global dependence on animal agriculture.”

“The substitute meat market is expected to grow 8.4% annually over the next three years, reaching $5.2 billion globally by 2020, according to Allied Market Research … Companies that produce fake meat and seafood, ranging from ‘bloody’ burgers to sushi made from tomatoes, have targeted college campuses as testing grounds for their creations … In October, startup Impossible Foods announced it will expand distribution of its vegan burger, which sizzles on the grill and bleeds juices like real beef, to universities and company cafes.”

“Impossible Foods opened its first large-scale production facility in September, which will allow it to produce at least four million meatless burgers a month by year’s end … New Wave Foods, which manufactures an algae-based shrimp alternative, and Ocean Hugger Foods, which is working on plant-based seafood — including a raw tuna substitute made from tomatoes — have also set their sights on food-service companies as a path for distribution.”

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Fake Apple Store: Not Bloody Likely

Boing Boing: “The good-natured prankster group Improv Everywhere had some fun a few Sundays ago when they converted Manhattan’s 6-train glass elevator at 23rd street into a fake Apple store. They told people it was a pop up to replace the iconic glass Apple store which is closed for renovations until early 2018.”

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Burberry & The Death of Aesthetic Alchemy

The New York Times: “Christopher Bailey’s decision to step away from Burberry, a brand with which he was almost synonymous, underscores a new belief in the fashion world that it is no longer expected, or even desirable, for a designer to remain at a house for a long period of time. And it further redefines that role as less of an aesthetic alchemist and more of an employee with a transferable skill set.”

Luca Solca, an analyst, writes: “We believe this is a necessary move to make Burberry exciting again. Creative directors — like all artists (painters, composers, singers) — tend to produce variations on a theme. Most brands that have gone through a revival had to first find new creative resources.”

“Like Karl Lagerfeld at Chanel, Mr. Bailey’s skill lay in taking the major ingredients of a heritage brand — in Burberry’s case, the checks, the trench coat and its roots in the British countryside — and continually moving them toward the abstract and into a cooler, more contemporary aesthetic. He was among the first designers to embrace the digital age.” However: “Aesthetic inspiration seemed to have been traded for strategic change: under Mr. Bailey, Burberry was among the first brands to merge multiple lines at different price points into a single offering, combine the men’s and women’s shows into one, and move to a see now-buy now system in which clothes became available as soon as they were shown.”

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Amazon & The Delivery Experience

Axios: “Amazon has gotten so good at moving merchandise that it now accounts for 43 cents of every dollar spent online in the U.S., according to eMarketer … Lost in this torrent of news are indications that Amazon’s revenue formula is fundamentally changing: from a reliance on retail and cloud services, the e-retailer appears likely to power future growth with fulfillment and shipping services to third-party sellers.”

“Amazon’s latest offerings — Seller Flex and Key — are next in the line of this tradition. Seller Flex launched last month: It’s a new courier service that ships goods from outside sellers to customers’ homes. Amazon Key was announced last week: Using a smart lock and an indoor security camera, this program offers in-home delivery for Amazon Prime members. ‘This is not an experiment for us’: Peter Larsen, Amazon’s vice president of delivery technology, tells WSJ, ‘We think this is going to be a fundamental way that customers shop with us for years to come’.”

“The key to understanding Amazon is its monomaniacal focus on giving the customer what he or she wants, even before they know they do. Amazon is not going to wait around for FedEx and UPS to experiment with changes that could improve the customer experience, whether that means new products for home entry or faster delivery options. And history shows it would be wise to take notice when Amazon starts experimenting in your backyard.”

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Toyota Yui: Your Father the Car

The Wall Street Journal: “If you love your car, Toyota Motor Corp. thinks your car should love you back. That’s the reasoning behind the company’s artificial-intelligence project, dubbed Yui: an onboard virtual assistant that gauges your mood, indulges in personal chitchat and offers to drive if it senses you are sleepy or distracted. In one Toyota video, shown at the Tokyo Motor Show, a woman sits on a seaside cliff, talking about her father with her car. ‘He sounds like a great father,’ says Yui, in a baritone male voice. ‘You’re a bit like him,’ the woman says.”

“To be sure, rarely do futuristic vehicles at auto shows make it to the roads. But Toyota plans to start testing a car equipped with Yui on Japanese roads in 2020. In autonomous-driving mode, the seats recline and massage your back in a manner Toyota says will slow your breathing and calm you down … Toyota imagines Yui being treated like a friend or family member, with whom access to social-media accounts is shared.”

“It wants to monitor your social-media posts to know if you are obsessed with a particular band or sports team. It also wants to monitor the news, so it has potential context when you look happy or sad. Did your favorite team drop out of the playoffs? Did your favorite singer come out with a new song? … Not all car makers see people wanting a humanlike relationship with their cars … ‘I’d rather not have this, because I’m a private person,’ said Yasuko Takahashi, a 54-year-old office worker… ‘I’d rather have the cars talk to each other, instead of me,’ she said.”

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