An old technology is enabling new conversations between brands and consumers, reports Christopher Mims in The Wall Street Journal (7/28/14). Back in "the mid-1960s, MIT professor Joseph Weizenbaum developed a computer program called ELIZA, which could engage in open-ended conversation with a real human being." Over the years, programmers have filled these "chat bots … with knowledge about the real world. They can also learn from their conversations," and can sound fairly intelligent.
The potential for brands is palpable. "If you could chat with a brand in the same way you chat with a friend, that’s powerful," says Ted Livingston, founder of Kik, a chat service. It is even more tantalizing given Ted’s assertion "that four in 10 US teens are active users of its service" and already "are having something like actual conversations with a half-dozen brands." For example, while touring Japan last fall, teen idol Paul McCartney used a Kik competitor called Line to "chat" with followers.
For perspective, Sir Paul has some 2 million Twitter followers, and 9.3 million Line followers. For the most part, the McCartney organization used the bot simply to send updates. Some brands remain skittish about the bots because they are still relatively primitive and if turned loose might say something wrong. However, some see chat bots as a possible customer-service tool, while others envision using them for new product launches, imbuing the brands with a distinctive voice and personality.
Sharing simple, quirky recipes is one of the hottest new concepts on YouTube, reports Georgi Kantchev in The New York Times (7/28/14). "Last year, YouTube’s top 20 cooking channels generated more than 370 million views and more than doubled their subscribers." A cooking channel called Sorted Food is enjoying particular success, generating "more than 11,000 hours of viewer traffic a day" and "more than 865,000 subscribers." Small numbers next to say, comedy or games, but still pretty impressive.
Sorted Food began on a lark, with Ben Ebbrell, a culinary arts major, "sharing cheap and easy recipes with his friends using the backs of beer coasters." Dishes included "simple mac-and-cheese and elaborate-looking iles flottantes — ‘floating islands’ — of soft meringues enveloped in a caramel cage." "At university we were all eating complete rubbish," says Jamie Spafford, a friend and now a partner in Sorted Food, explaining how the whole thing got started. First step was a self-published cookbook, and then the YouTube channel, launching in 2010.
The channel grew quickly. Its most popular video to date is "a three-minute segment, watched about 800,000 times, showing how to make a microwave cake in a coffee mug." (video) "Networked culture allows for little pockets of fascination to bubble up and YouTube allows us to marvel at the skills of others," says media scholar Joshua Green. Ben says he’s "now being approached by TV companies," but does not want to lose control over the channel’s content, or the relatively personal connection with his YouTube audience.
Software engineers are using big data to help customers make home-cooked meals, report Ruth Simon and Lora Kolodny in The Wall Street Journal (7/24/14). Crunching data also helps Plated, a meal-kit delivery startup, calculate the demand for Crunchy Tofu, among other dishes. It helps a similar outfit called Blue Apron ensure "a just-in-time supply of ingredients for generally healthy meals." Plated "says it aims to lose less than one-percent of its perishable inventory to spoilage."
"There is a lot of complexity going on behind the scenes that the customer should never see or know about in order to enable a perfect meal arriving at their door," says Plated co-founder Nick Taranto. Both Plated and Blue Apron "are positioning themselves to capitalize on Americans’ willingness to order even fresh food online. Each meal kit includes a dinner recipe and all the pre-measured ingredients needed" to make a meal — which typically costs "$10 to $13 per person."
Plated "ships more than 100,000 meals a month in 46 states," while Blue Apron "delivers about 700,000 meals a month." Both startups "rely heavily on the internet and social media for marketing." Blue Apron attempted "to create an algorithm that would predict a recipe’s popularity based on the underlying ingredients, but found they couldn’t quantify the magic of how those ingredients come together." US households spend $1.1 trillion annually "on food and snacks," which suggests a significant growth opportunity for meal kits.
Toph Brown is creating an app that gives travelers a virtual companion when they are traveling alone, reports Scott McCartney in The Wall Street Journal (7/14/14). The app was inspired by Toph’s conversations with "people on the streets of San Francisco what might most improve their travels." "People said they feel like cattle when they are away from home, they want to be connected," says Toph, of London-based UsTwo Studio Ltd. So, he came up with an app that lets travelers pick one person to track their journey, not unlike a FedEx package.
For example, the app will alert the designated follower — "a spouse, friend, colleague or administrative assistant" — as the traveler "passes beacons installed at airports." The follower is also notified when the traveler clears security and other key points. It’s also possible for the follower to "access menus of food for purchase on the flight and purchase a drink or sandwich as a gift." The app also prompts the traveler with gate information and "can pop up a boarding pass bar code" at the gate.
"The goal of our app is to string a light tether between two people when they travel," says Toph. The app is one of a handful resulting from a ‘hack-a-thon’ sponsored by American Airlines to develop new tools to improve the travel experience. Rick Elieson, vp of global partner marketing for American, says the app could be particularly useful for tracking unaccompanied minors or elderly flyers. American plans to continue to work with Toph to develop the app further.
The true power of big data and social networks is in collaborations between brands and retailers. A Hub White Paper by Sharon Love of TPN. Big data is young, growing and changing. We know that properly leveraged, big data allows us to understand our audience more effectively and deliver worthwhile content to meet their functional, social and emotional needs. Social networks have an equivalent forward momentum. Their application in the lives of their users is integrated, evolving and ongoing.
Today, we have the ability to target users on social networks by their likes and dislikes, shopping behaviors, social usage and digital behaviors, and hobbies. Marketers and the social community will continue to explore the boundaries of social media’s place and purpose, as the vehicles themselves will innovate to do the same. Who expected that Pinterest would serve as a magazine, cookbook, photo album, how-to manual, search tool, and ecommerce facilitator, among many other applications? It’s anybody’s guess what will bring about social’s next winning innovation. Read the rest of Sharon’s white paper.
So-called "ladder bars" stock so many kinds of whiskey they need a ladder to get to them all, reports Robert Simonson in The New York Times (7/23/14). The Multnomah Whiskey Library in Portland, Oregon, has "850 types of whiskey," and needs to use every inch of available wall space to store it all. Hard Water, in San Francisco, also uses ladders, as does "Canon, in Seattle, where roughly two-thirds of the 3,500-bottle collection are whiskeys."
These whiskey libraries "have timed their arrival well, as Americans’ thirst for whiskey, and for whiskey knowledge, has skyrocketed. Sales of bourbon, Tennessee whiskey and Irish whiskey, particularly high-end brands, have risen sharply over the last decade. In 2013, 18 million nine-liter cases of bourbon and Tennessee whiskey were sold in this country, compared with 13.4 million in 2003, according to the Distilled Spirits Council of the United States." Such growth has prompted bar-keeps to re-consider their approach.
"The traditional business model for a bar, you don’t want to sit on inventory," says Alan Davis of Multnomah. "Our business model is to have a massive inventory. We take the ‘library’ word very seriously." Bar owners report that the turnover is surprisingly fast for all but the most vintage bottles. Lew Bryson of Whiskey Advocate says the whiskey trend began with "Pappy-ophilia," a search for Pappy Van Winkle, a cult bourbon that sparked popular interest in "old and rare spirits."
Making whiskey was "essential to local economies" during Prohibition, reports Max Watman in a review of Gentlemen Bootleggers by Bryce T. Bauer (The Wall Street Journal, 7/19/14). "All around the country … hard-working rural folk in bib overalls braised together little copper stills and started putting out a quality product to refresh their friends and neighbors." This started out "as simply a way to ensure a supply of good booze for local use" but soon took on "a more important role."
Such was certainly the case in "the small town of Templeton, Iowa," whose Templeton Rye was said to be Al Capone’s "favorite tipple." At the time — "the early 1920s" — "corn prices crashed; then land prices were hit. Farmers were more efficient than ever, but there was no market for their goods." Joe Irlbeck, a Templeton local, "had bought his first gallon of whiskey for $10 in the summer of 1920, when he was 20 years old. The 18th Amendment had been in place for six months, he was working as a farm hand, and he was making a dollar a day."
So, Irlbeck started a moonshining business with the full support of local "merchants, politicians, switchboard operators and the local monsignor," who "all benefitted from the local bootlegging business that Prohibition had produced." This was critical when the Feds tried to prosecute Irlbeck, because the locals simply denied he was a bootlegger. Meanwhile, back in Washington, "Herbert Hoover … would stop off at the Belgian embassy for a brace of cocktails each evening since it was technically on foreign soil."
When Carrie Crowell got married, she also got songs written by her father and new husband, reports Eric V. Copage in The New York Times (7/21/14). In most ways this should not be surprising, given that Carrie is a daughter of singer-songwriters Rosanne Cash and Rodney Crowell. Her new husband, Daniel Knobler, is also a musician. "It was totally sweet and wonderful," says Carrie. "But it felt like, that’s what’s supposed to happen … I come from a family where music is important."
Daniel wrote both an instrumental for the wedding processional, which had a classical sound, and another for the party, which had "a country flavor." Carrie’s dad (Roseann’s ex-husband) meanwhile penned an original tune for the occasion, Tennessee Wedding Song, which he performed live, and during which "the tears started flowing," according to Rosanne, who says: "Even when no one can express an emotion, they can express a song. That’s as essential to us and our family as anything else."
Ariel Meadow Stallings of Offbeat Bride, says original wedding music is on the rise, and for those not blessed with musically legendary in-laws, it’s possible to commission a wedding song via the Doubleclicks. Some wedding bands will also revise lyrics of existing songs based on information supplied by the couples. (Editor’s note: You can also do it yourself, as I did — creaky voice and all — for my daughter’s July 4th wedding. Special thanks to Spencer Manners and Edward Dzubak, and apologies to Steve Earle.)
Major recording companies are embracing karaoke as a way to reach new audiences, reports James Barron in The New York Times (7/20/14). Since CDs, and now downloads, are on the wane, labels hope an app that lets people sing along with original studio tracks could "generate attention" for their artists … "Unlike singalong apps that play covers — renditions of hit songs recorded by anonymous studio musicians — Hook’d features everything from the original recording except the vocal track."
In other words, you can now sing along with the real B-52s, just like you always dreamed of. It’s okay if you don’t know the words because "Hook’d shows the lyrics on the cellphone screen." If you need a reminder how that vocal track goes, you can also "listen to — but not record — the original lead vocalist." Once you’re happy with your "musical selfie," you can share it with your friends "by sending out links" and share your performance on "Hook’d’s YouTube channel or on Facebook and Twitter."
Robert Taub of MuseAmi, "a pianist turned software entrepreneur," developed Hook’d, and launched it with "42 songs when it started on July 10 as a free app for iPhone and iPod Touch." He plans to add more songs "in the next few weeks," having "negotiated with three major recording companies, Warner Music Group, Sony and Universal Music Group. MuseAmi also worked out deals with the music publishers that represent the songs’ writers and composers." The app is free if all you want to do is sing along to 30 seconds of chorus, "with access to the full songs" priced at "$3.99 a month."
Stonyfield hopes to stem the Greek yogurt juggernaut with a French twist, reports Sarah Nassauer in The Wall Street Journal (7/16/14). The appeal is to those "who find Greek yogurt too thick or bitter," with a recipe that "uses cheese, not yogurt bacterial cultures, giving it a smooth texture and mild taste." It is "similar to French fromage blanc," and offers "plenty of protein and a creamy texture even in low-fat varieties." Called Petite Creme, it will be offered in "seven, mostly fruit flavors."
Stonyfield, which "has struggled to grab a major foothold in the Greek yogurt market," plays up the French imagery in its packaging. The color of the cup "is slightly gray to mimic a French bistro menu chalkboard." Stonyfield had "hoped to make the outside labels … matte, not shiny, so they felt like a chalkboard," but that didn’t work out — although they hope to perfect a matte finish at a later date. They also used a "font and twirling flourishes" in an Art Nouveau style "associated with European architecture and furniture."
The dark color is also meant to stand out on "yogurt shelves filled with white and blue cups" and generally "convey sophistication." The design also features "an upright spoon" on the label, "to suggest the act of eating" and highlight the product’s "creamy texture." The overall design is premised on the insight that shoppers who "are attracted to new products want to feel they are discovering something unknown … As a result, Stonyfield’s logo is tiny and written in black on white, not the typical blue." Petite Creme will retail for about $1.89 a cup.
Clorox now sells more salad dressing than it does its namesake brand of bleach, reports Lindsay Gellman in The Wall Street Journal (7/18/14). Driving that growth is the "buttermilk-and-herb" dressing otherwise known as Ranch, which "has been the most popular salad dressing flavor in the US since the early 1990s, when it overtook Italian, according to NPD Group." NPD "says the average American ate salad dressing 38 times last year, choosing Ranch on 14 to 15" occasions.
The dressing packs some 140 calories into a two-tablespoon serving, but many see it as the perfect accompaniment for fresh vegetables or, yeah, salad. "I would be miserable eating a salad otherwise," says Mike De Jesus who says he "tries to maintain a healthy diet." The health-food business sees opportunity in this, with Bolthouse Farms offering a lower calorie version "made with Greek yogurt … At Whole Foods Market, the number of ranch-flavored vegan and vegetarian options has nearly doubled over the past five years."
Clorox markets its dressings under the Hidden Valley brand, named for an actual California dude ranch where it was developed "in the 1950s … As it gained popularity, the owners started shipping a dry seasoning mix to customers via a mail-order business. Clorox acquired the dressing maker in 1972 and created a shelf-stable bottled version as well as dry seasoning packets." Today it "makes 24 varieties of ranch," including a version for hamburgers and fries.
Mattel is using wooden toys and paper catalogs to create tighter bonds with its young customers, reports Gregory Schmidt in The New York Times (7/19/14). The toymaker is also using e-commerce and a few specialty retail stores, but the big idea is to capitalize on the powerful emotional connection between children and its Thomas & Friends line. "Kids that collect Thomas are more passionate about the story line and the characters," says Geoff Walker, evp of global brands at Fisher-Price, a unit of Mattel.
Lisa Nelson, mother of 4-year-old Benny Nelson, agrees. "It’s a very creative outlet," she says. "My son talks to himself the whole time while playing with them." The brand-experience strategy takes a page from that of American Girl, also a Mattel property, which has used "direct-to-consumer" sales to produce "an 11 percent rise in gross sales worldwide … in 2013, the company’s only core brand to show an increase last year." The catalog is particularly effective, says Morningstar analyst Jaime Katz.
"Kids see it, and they want it," she says. "You have the train; don’t you want the track? It’s a complementary business." The direct-sales model also works with parents, she adds: "It’s really the parents who are driving those sales home." That the toys are made of wood is another factor, as Benny’s mom explains: "I think it’s worth the money because they last." Other toymakers, including Lego and Playmobil, have adopted similar strategies, and Geoff Walker says it is "a growth model for Fisher-Price as a whole."
Hasbro is using 3-D printing technology to "generate a bit of buzz" for its My Little Pony line, reports Elizabeth A. Harris in The New York Times (7/21/14). "What 3-D printing truly empowers is the creation of artwork that maybe wouldn’t make sense for mass production, but it makes sense for a unique item," says Hasbro chief marketing officer John Frascotti. Hasbro is pursuing the concept in partnership with Shapeways, a 3-D printing enterprise known for creating iPhone cases, coffee cups and other customized items, via a new site: SuperFanArt.
The SuperFanArt idea starts "with five artists whose work will be available for order online and printed in a colorful plastic polymer that Shapeways executives describe as feeling similar to sandstone." Hasbro will first approve all designs to ensure they are appropriate, however "the artists largely have free reign" on both designs and pricing. Over time, "Hasbro hopes to expand the partnership to include more artists, more of its brands and other materials," and expects that the initiative will "extend the reach of its trademarks" while maintaining control over them.
"Instead of trying to prohibit it, they’re enabling it, and I think that’s awesome," says Shapeways chief executive Peter Weijmarshausen. Walmart, meanwhile, "has begun experimenting with a 3-D printer’s potential for producing excitement among shoppers" at Sam’s Club stores, using them to create action figures with shopper faces on them. Home Depot is selling 3-D printers, too. However, Forrester’s Sucharita Mulpuru thinks 3-D printers are more about "novelty and excitement" than business models, while acknowledging that they "will transform our lives in the future."
David Rose thinks household objects should "mimic the qualities found in magical tools of fantasy and folklore," reports Penelope Green in The New York Times (7/17/14). He means things like "the swords of Arthur and Frodo, say, or the talking mirror in ‘Snow White’." The goal, he says, is to fulfill "human drives with emotional engagement and elan." His concept is to embed, for instance, "his keys, his musical instruments, his wallets and his pens … with special powers."
David refers to such devices as "enchanted objects." For example, "an umbrella that tells you when it’s going to rain, a trash can that orders food, a table that displays your Facebook photos." In his own home, he has "talking pill bottles, a teleporting cabinet (open a door and it connects by Skype to his parents in Wisconsin)." An instructor at MIT’s Media Lab, David envisions the home as a kind of "app store." This is now possible, he notes, because the "computer has atomized … and its functions can be distributed."
The limiting factor, some say, is the inherent connection to the Internet, the data it collects, and the companies that might have access to it. Among the critics is Sherry Turkle, also of MIT and author of Alone Together, who decries what she calls a "regime of memory." "We didn’t get to vote on this regime, there’s no law and there’s no going back … The new regime comes with an extravagant language of gifts and miracles … Well, that’s the way people in fairytales talk. But if you remember your fairy tales, there is always a cost."
Dyson is improving vacuum cleaners the old-fashioned way: through "mechanical innovation," reports Farhad Manjoo in The New York Times (7/17/14). The problem with vacuum cleaners is that they are too big and bulky, and encumbered by unruly extension cords. The challenge is fundamentally mechanical, because the thing that gives vacuums their power is the motor, and obviously the bigger the motor, the heavier the machine. It’s not a problem that can be solved with algorithms or microprocessors.
This is why Dyson "has been researching motors for 15 years" and invested "$300 million in a factory in Singapore where robots pump out millions of motors a year." Its latest creation, the V6, "is about the size of a fist, and is built from specialized plastics that maintain their shape while operating at high speeds … it uses a set of electromagnets that pulse on and off to coax an axle to spin … The V6 spins at more than 110,000 revolutions per minute, making it one of the fastest commercial motors ever made."
The V6 "is about 50 percent more powerful than the previous version" and powers Dyson’s DC59 Motorhead, which "is tiny, weighs under five pounds and has a slender, hot pink and purple body that resembles a sci-fi laser gun from an alien civilization obsessed with cleaning." The downside is it has a battery life of just 24 minutes and costs more than $500. The upside is that it’s handy. The cordless vacuum category grew by "over 57 percent in the last two years, and Dyson’s machines accounted for 45 percent of that growth."
Big Data and social networks enable a new system of engagement. A Hub White Paper by Gunther Schumacher of OglivyOne. The world is changing fast. You’ve probably heard that phrase so often that it’s just a bunch of word-shaped noise for you, indistinguishable from the general roar of the bazillion other things on your plate today. It is passive, anyway. You have nothing to do with it. Unspecified things are happening, and you have limited agency to spur them on or stop them cold. Unless, of course, you’re one of the folks actively changing the world.
Our smarter planet (forgive me for the IBM lingo here, but there really is no better way to put it) is sustained by a new natural resource — data. This data is used more efficiently and intensively by a large and growing cloud computing infrastructure, and as data’s potential becomes clearer, people grow ever more comfortable with sharing it. Engagement and sharing of data is an expected part of being a consumer; it’s table stakes for tapping into a better life. Read the rest of Gunther’s White Paper.
Warren Buffett is a genius in many ways, but not when it comes to investing in retailers, reports Anupreet Das in The Wall Street Journal (7/17/14). It’s the "one area where he says his investing track record is ‘awful,’ ‘pretty bad’ or ‘really bad’." It’s not that he’s invested in all that many retailers, and those that he has "are profitable … But the retail sector continues to confound the billionaire investor and his partner Charlie Munger," who have "lamented how the Internet is rapidly reshaping shopping habits."
"I think the new technology is going to be very disruptive," Charlie told an annual Berkshire Hathaway meeting in May. "Retailing in particular is facing major threats." In fact, Berkshire’s dismal track record at retail pre-dates the Internet, and includes "a 1966 deal to buy Baltimore department store Hochschild-Kohn," which was "one of the conglomerate’s biggest mistakes to that point." Warren suggests that retail is inherently challenging "because shopping habits and sales channels are constantly changing."
He has invested in retailers "that appeared to have at least some protection," but were done in by the Internet. Meanwhile, Warren "is effusive about someone who he believes figured it out years ago: Amazon.com Inc.’s Jeff Bezos," whom he reportedly called the "best CEO in America" and described as "ungodly smart." But Warren doesn’t blame anyone but himself for his retail-investment mishaps, writing in an annual letter: "I simply was wrong in my evaluation of the economic dynamics of the company or the industry in which it operated."
Chantel Waterbury created a "social retail brand" that is reinventing direct sales, reports Angus Loten in The Wall Street Journal (7/17/14). Launched in 2010, Chloe & Isabel "uses independent sales associates to sell the company’s jewelry online … Named for hypothetical best friends with opposite tastes — trendy versus classic — today the company has 80 full-time employees, including a team of jewelry designers who source and produce hundreds of styles."
The enterprise uses "proprietary software that allows its independent sales associates, known as ‘merchandisers,’ to create their own customized Chloe & Isabel web boutiques and tap their social networks for customers. The company currently has nearly 5,000 merchandisers, who start by purchasing a starter kit, comprised of 18 pieces of jewelry for $175. The sales associates earn commissions, typically 30% of their own sales." The company currently is valued at $100 million, and hopes to be profitable by 2015.
Chantel says she has no plans to open any retail stores "because the merchandisers are my stores," adding that "every single merchandiser creates her own collection. She’s a micro-entrepreneur." She says she’s managed to raise some $32.5 million in venture capital. "It’s a business model that’s disrupting the entire retail industry, and that’s something venture capitalists are always on the lookout for." Chantel is eyeing expansion overseas "to help women develop skills and foster their careers."
Miles Davis is the patron saint of the dining experience at Eleven Madison Park, reports Jay Cheshes in The Wall Street Journal (7/5/14). It’s the "loose collaborative spirit" of the jazz legend’s music that guides the way the staff interacts with diners. "In the same way that cooking is a muscle, so is hospitality and service," says owner Will Guidara. Gabriel Stulman takes the same approach, allowing his staff to "drink on the job, play their own music over the sound system, and wear just about anything they like."
"How much fun can you have as a diner if everyone around who’s serving looks miserable?" says Gabriel, owner of "six cozy restaurants around Manhattan." "We started a competition at all of our restaurants — who can get the most unsolicited hugs," he says, adding: "We have this mantra. Treat celebrities like locals, and locals like celebrities because everyone loves to be made to feel special." Staff are "encouraged to offer a drink or dish on the house every day" and generally "lavish guests with … warmth."
Will credits Danny Meyer’s 2006 book, Setting the Table, with changing the industry by creating "a new sort of dining room culture centered not on service (the technical aspects of working a room), but hospitality (the way you’re made to feel there)." Danny pioneered this "30 years ago" with "his first New York restaurant, Union Square Cafe." "In the 1980s I would go to all these hot restaurants to learn about the business," says Danny. "The food was really exciting, but I started to realize the people weren’t always that nice."
If you think you always pick the slowest line at the grocery store, you’re probably right, reports Adam Mann in Wired (7/15/14). The reason is that the "math is working against you … Chances are the other line really is faster. Mathematicians who study the behavior of lines are called queuing theorists, and they’ve got the numbers to prove this." Basically, if a store has three checkout lanes, your odds of choosing the fastest one is one in three, given that delays happen at random.
Queuing theory dates back to "the early 1900s," in Copenhagen, where "a young engineer named Agner Krarup Erlang was trying to figure out the optimal number of lines for the city’s switchboard … Erlang devised equations that took into account the average number of phone calls in a given hour and the average amount of time for each call." Where grocery stores are concerned, the solution is to "make all customers stand in one long snaking line, and serve each person at the front line with the next available register."
This is what Trader Joe’s does, and it works because "a long delay at one register won’t unfairly punish the people who lined up behind it. Instead it will slow everyone down a little bit." The only problem is "customer psychology. We human beings like to think we are in control of our lives and can beat the system if given the chance," and some prefer to roll the dice with multiple lines. Disney, meanwhile, addresses potential impatience by offering diversions while visitors wait in line, and some fix it themselves simply by fiddling with their mobile devices.