Home Depot: Retail ‘Oasis’ Against Amazon

The Wall Street Journal: “Do-it-yourself chains Home Depot Inc. and Lowe’s Cos. appear to have built a retail oasis mostly walled off from the reach of online behemoth Amazon.com … Executives from the home improvement chains cite a litany of favorable housing trends for their good fortunes. New households are being formed and housing turnover remains steady. Millennials are even willing to buy homes … All that spurs trips to large chains to pick out appliances and paint colors, and plan projects around the home.”

“But the e-commerce giant doesn’t have a toehold in large parts of the home improvement space, like lumber, paint and gardening supplies. Home Depot says just 25% of its business—smaller, easy-to-ship items like power drills and small hand tools—faces tough online competition.”

“That doesn’t mean either chain is immune to Amazon. A UBS survey in June found that 11% of consumers planning a home improvement project themselves planned to buy something from Amazon. That is far behind the 36% who said they planned to shop at Home Depot and the 21% at Lowe’s, but up from just 7% a few months back.”

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Grocery Spoils Target’s Profits

The Wall Street Journal: “Target Corp. has a problem in its grocery aisles: Shoppers aren’t visiting often enough to buy the retailer’s fresh meat, fruits and vegetables before they spoil … The issue, in part, is that Target’s supply chain wasn’t built to transport items with a short shelf life … Perishable foods, which usually are the big traffic drivers at most grocery stores, have been a drag on Target’s profits.”

“Shifting more control to a third-party vendor would move Target in the opposite direction of its biggest competitors. Wal-Mart Stores Inc., which gets more than half of its U.S. revenue from grocery, has invested in infrastructure to transport fresh foods on its own.”

“Target has made an aggressive push to add organic and gluten-free brands … Target also has spent more than $1 million per store to improve the look and inventory management of 25 locations in Los Angeles. The refurbished grocery area features new lighting and signage that highlights the organic and fresh products. The stores now get more frequent deliveries and carry more localized products. But rolling out those changes to all 1,800 Target stores nationwide would require a massive investment, analysts say.”

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Combrr: Like Uber for Beach Eats

The New York Times: “It’s called Combrr, and it will soon allow people to buy items from concession stands from their towels, avoiding lines that lately stretch clear across the (Rockaway Beach) boardwalk.”

“Combrr works a lot like Uber: Customers drop a pin at their location. Vendors can accept or decline an order, and customers can track its progress from the app. There’s a $5 delivery fee, and the entire transaction, including the tip, is done digitally, bypassing the city’s requirement for a permit to sell items on the beach. But in addition to geolocation technology, Combrr relies on customers’ selfies and instructions. A sample note: ‘We’re wearing pink bikinis sitting under a polka-dot umbrella on 99th’.”

“The Rockaway Beach concessions, which appeared in their present artisanal incarnation in 2011, have been credited with turning the beaches into culinary hubs. So far, the seaside food scene has remained charmingly low-tech — operating out of sandy-floored bunkers and brightly painted shanties with surfboard racks … Combrr, which is free, will be available not long before the concessions close, a week after Labor Day.”

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Binu Binu: Soap as Body-Soul Exorcism

The New York Times: “For the Toronto native Karen Kim, 36, the memory of her Korean grandmother buffing her body when she was 5 years old left a lasting impression … Something about the purity of a simple “soap and water” beauty routine stuck with Kim. So much so that last spring, she left her job in fashion at La Garçonne in New York City … to try her hand at soap making, reinterpreting the old-fashioned traditions of Korean bath life into a line of modern cleansing goods.”

“Called binu binu (or ‘soap soap’ in Korean), it comprises six restorative bars, all made with a base of boricha, a barley tea that’s prized for its detoxifying powers.”

“Each bar starts with a story, many of which include strong female characters in Korean culture. Her Haenyeo Sea Woman soap, for example, is an homage to the haenyeo deep-sea divers of Jeju Island … Her blend of black Hiwa Kai sea salt, seaweed extract and peppermint oil riffs on the bracing feeling of plunging into the ocean. Others, like her Shaman Black Charcoal soap, conjure up the modern mudang shamans … the essential oils in the charcoal soap — lavender, cedarwood and clary sage — are often used in purification ceremonies and provide a deep cleanse that, she says, is akin to ‘an exorcism’ for the body and soul.”

“Kim cuts the bars by hand, forming monolithic shapes inspired by the severe blocklike aesthetic of Donald Judd. ‘I love the idea of soap being a little sculptural element in your bathroom,’ she notes.”

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Parity Airlines: Copycats in the Sky

The Wall Street Journal: “The big three U.S. airlines—American, Delta and United—match each other more closely than ever … They’re all intent on not letting one rival gain a cost or product advantage.”

“When United announced it would begin flying lie-flat beds on cross-country routes such as New York-Los Angeles, Delta and American also switched to lie-flat beds in premium cabins. When Delta was first with luxury-car rides across the tarmac for top customers at major hub airports, the other two found luxury cars, too. Fees for good seats? Check. Start charging higher ticket-change fees? All three went up to $200 on domestic trips.”

“Airlines say the similarities just mean they are all coming to the same conclusions about what customers are willing to pay for and what they aren’t.”

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Jet vs. Jetsons: Amazon Bets on Drones

Farhad Manjoo: “If Amazon’s drone program succeeds (and Amazon says it is well on track), it could fundamentally alter the company’s cost structure. A decade from now, drones would reduce the unit cost of each Amazon delivery by about half, analysts at Deutsche Bank projected in a recent research report. If that happens, the economic threat to competitors would be punishing — ‘retail stores would cease to exist,’ Deutsche’s analysts suggested, and we would live in a world more like that of ‘The Jetsons’ than our own.”

“Amazon … has built many different kinds of prototypes for different delivery circumstances … for instance, drones could deliver packages to smart lockers positioned on rooftops … Amazon’s patent filings hint at even more fanciful possibilities — drones could ferry packages between tiny depots housed on light poles, for example.”

“Amazon has filed patents that envision using trucks as mobile shipping warehouses … a drone might fly from the truck to a customer’s house, delivering the item in minutes … according to Amazon, the earliest incarnation of drone deliveries will happen … within five years, somewhere in the world.”

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Adidas ‘Speedfactory’ Customizes Faster

Quartz: “Adidas is bringing some new robotic manufacturing to the US. The German sneaker and apparel company … plans to have a robot-staffed ‘Speedfactory’ up and fully functional in the Atlanta, Georgia, area by the end of 2017. The aim is to bring Adidas products to US customers as quickly as possible, and Adidas says the factory will also allow it ‘unprecedented’ customization opportunities beyond what it currently offers.”

“Adidas, which debuted its first Speedfactory in Germany last year, believes decentralizing production and building factories closer to its major consumer markets will let it react more quickly to demand … Adidas’s goal for its US Speedfactory is to produce 50,000 pairs of sneakers, primarily running footwear, in the back half of 2017, but in the mid-term it aims to manufacture 500,000 pairs of shoes for running and other activities.”

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Self-Checkout: A Shoplifter’s Dream?

The New York Times: “Self-service checkout technology may offer convenience and speed, but it also helps turn law-abiding shoppers into petty thieves by giving them ‘ready-made excuses’ to take merchandise without paying, two criminologists say.”

“The scanning technology, which grew in popularity about 10 years ago, relies largely on the honor system. Instead of having a cashier ring up and bag a purchase, the shopper is solely responsible for completing the transaction. That lack of human intervention, however, reduces the perception of risk and could make shoplifting more common, the report said.”

“In a behavior known as ‘neutralizing your guilt,’ shoppers may tell themselves that the store is overpriced, so taking an item without scanning is acceptable; or they might blame faulty technology, problems with product bar codes or claim a lack of technical know-how.”

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Topo Chico: Mexican Water Goes ‘Viral’

The New York Times: “Topo Chico … This super bubbly agua mineral, in retro green-tinted glass bottles, has developed a fervent following here in Texas. Devotees stock entire refrigerators with the stuff and tattoo themselves with the brand’s logo, an Aztec princess who legend has it was healed by drinking the water, which emanates from an inactive volcano in Monterrey.”

“Carbonation is added, but just enough to restore any fizziness lost during purification, in keeping with F.D.A. rules for products sold as sparkling water. The bottler makes no health claims other than that the water ‘quenches thirst’ and ‘aids in digestive processes.’ But some Texans insist it’s the best hangover cure.”

“Beyond any curative powers, many fans of Topo Chico will tell you that it just tastes good … All this love has taken the bottler of Topo Chico somewhat aback. Family-run since the turn of the 20th century, the company merged at the turn of the 21st century … to form Arca Continental, the second largest Coca-Cola bottler in Mexico … its marketing is endearingly un-slick. (Its website has numerous grammatical and spelling errors.)”

“But as part of an agreement announced in May, the Coca-Cola Company will take a 20 percent stake in Arca Continental’s Latin American beverage businesses … it’s fair to wonder whether Topo Chico will lose some of its outsider, underdog appeal.”

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Simple Products Beget Simple Packages

The Wall Street Journal: “Instead of burying ingredient lists in the fine print on the back of the package, food manufacturers are trumpeting simpler formulas prominently on the label’s front … More people care deeply about what’s in their food and insist on recognizing the ingredients. The litmus test for many consumers is whether those ingredients might appear in their own kitchen cupboards.”

“Simply Tostitos Organic Blue Corn Tortilla Chips boast only three ingredients: blue corn, organic expeller-pressed sunflower oil and sea salt. This past June, General Mills Inc.’s Larabar snack bar line launched Larabar Bites. The bites—available in flavors such as double chocolate brownie and cherry chocolate chip—resemble truffles and contain few ingredients which are prominently displayed on the front of the package.”

“New ads for Haagen-Dazs ice cream in major cities such as New York and Los Angeles show a spoonful of vanilla ice cream. ‘5 ingredients, one incredible indulgence’ read ads, which also list the recipe of cream, milk, sugar, eggs and vanilla … This fall, ConAgra’s Bertolli Frozen Meals is rolling out a new, reformulated line of meals that feature a shorter ingredient list that reads more like a recipe.”

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