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 outlets," 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.
USA Today is using digital media to reclaim its spot as America’s largest-circulation print newspaper, reports Leslie Kaufman in The New York Times (4/14/14). One new locus of its efforts is Social Media Tuesdays, a day when its reporters "must act as if there is no other way to get their articles except through sites like Facebook and Reddit … The purpose is to get them thinking like their readers, who increasingly get news through their Twitter feeds instead of the newspaper’s front page or home page."
The mastermind of this is Larry Kramer, the paper’s publisher. "I hope and expect that Larry will lead a re-thinking of what the print newspaper should be in an era when so many people get their basic news 24/7 digitally," says L. Gordon Crovitz, a consultant. "Too many daily newspapers still focus on reporting what happened yesterday, despite many readers having learned yesterday what happened yesterday." The paper also runs competitions among its journalists to "create the most viral headline or add the most new Twitter followers."
Susan Page, the paper’s Washington Bureau chief, says such activities have brought more energy to the newsroom. "We file more and we file faster … and we file without consideration of whether it will make the print edition." It has also helped return USA Today’s status as America’s biggest newspaper by circulation. However, whether it will help restore profits is unclear, as "the growth in online readers and digital advertising revenues are still not making up for the sagging fortunes of their core newspaper product."
"Being good at prediction often does not mean being good at creation," reports Sendhil Mullainathan in The New York Times (7/15/14). The observation is a function of "the oldest of statistical problems: Correlation is not causation." This fundamental truth is the bane of anyone who wants to "go viral" by guessing at what kind of tweet is most likely to catch on and spread. While it may be relatively easy to guess which tweet gets retweeted, it is obviously much harder to create one that gets retweeted.
What’s more, an algorithm designed to predict which tweets will be tweeted most often has a slightly better track record than humans — "67 percent of the time, beating humans, who on average get it right only 61 percent of the time." Consider, as well, that the algorithm "has no other knowledge. It has none of the contextual information you have accumulated over the years … It does not have a sense of humor or know what a pun is. It does not know what makes a turn of a phrase elegant or awkward."
Using "a few crude features, such as length of the tweet, the presence of certain words," and so forth, it "finds information in unexpected places." It knows that "longer tweets are more likely to be retweeted," but why? Well, because they "have more content," and it’s the content that makes the difference. "Some of the most predictive variables are circular." Facebook knows that the faster a post attracts comments, the more popular it will be. In other words, if you want to write a popular post, "write one that people like."
The confluence of our digital and physical lives is creating richer brand experiences. A Hub White Paper by Beth Ann Kaminkow of TracyLocke. In the early days of the Internet — well maybe as recently as five years ago — there was a sense that we would have our digital lives and our physical (real) lives. Games like Second Life and Farmville helped perpetuate this theory. With the growing pervasiveness of the Internet, our assumption was that a person would be able to craft a separate persona portrayed only online while maintaining a distinct version of themselves offline, and never should their two worlds collide.
Perhaps we underestimated how ubiquitous the digital era was about to become during Web 2.0. Now, as we experience the ‘Internet of Everything,’ and the rise of an even more intelligent Web 3.0, there’s still more blurring and blending between the physical and virtual. This gives rise to data capture opportunities that can now track our every move online and offline. In fact, it is the very desire to gather more data that is most inspiring the building of bridges and connections between the physical and the digital world. Read the rest of Beth Ann’s White Paper.
A generation of writers found their muse playing Dungeons & Dragons in their youth, reports Ethan Gilsdorf in The New York Times (7/14/14). Junot Diaz teaches writing at MIT and says his first novel, The Brief Wondrous Life of Oscar Wao, was inspired by his "gaming years." It won a Pulitzer Prize. While his books are not of the fantasy genre, he says the "fantastic narratives" of D&D taught him "a lot of important essentials about storytelling, about giving the reader enough room to play."
It is indeed D&D’s "improvisational and responsive nature" that makes it "different from novels and other narratives … Plotlines are decided as a group," and, explains English professor Jennifer Grouling, "you have to convince other players that your version of the story is interesting and valid." Dungeons & Dragons is played "around a table, not a video screen. Together, they use low-tech tools like hand-drawn maps and miniature figurines to tell stories of brave and cunning protagonists."
The storyline is framed by a Dungeon Master, who "must create a believable world with a back story, adventures the players might encounter and plot twists … If the Dungeon Master creates ‘a boring world with an uninteresting plot’," then players are apt to take the story "in a completely different direction." Unlike a novel, which is "a finished thing … the plot is always fluid; anything can happen." Other writers who cite D&D as an influence include Cory Doctorow, Stephen Colbert and Robin Williams.
Being locked in a room with no clear means of escape is becoming a popular pastime in Budapest, reports Lisa Abend in The New York Times (7/6/14). Currently, there are about "50 room-escape games scattered throughout the Hungarian capital," and small groups of people pay about $40 each to play. The room is "filled with clues and obstacles," and players must apply "deductive logic, teamwork and a bit of luck" to find their way out in less than an hour. Attila Gyurkovics came up with the idea about three years ago.
At the time, he was looking for a game that would help build teamwork among businesspeople and students. "At first, people looked at me like I was crazy: ‘You want to open a place where you lock people inside?’" But his enterprise ParaPark, now has "four games in two locations in Budapest" and is franchising "elsewhere in Hungary and abroad … Within months of opening, versions of ParaPark were popping up all over the city. With its post-Communist feel, Budapest is well suited for room escape games."
Attila says the appeal is grounded in flow theory. "You lose yourself," he says. "You’re not standing outside yourself saying, ‘Oh, I have to call my mom’ or ‘My boss is watching over me.’ You become completely absorbed by the game." Janka Csoti, who recently played at ParaPark, concurs. "What I liked about it," she says, "is that I was fully present : no checking my mobile, not thinking about what I was doing later. I felt like I was really giving my time to my friends."
For men, a shopping bag is "a tiny badge of shame," says Bonobos CEO Andy Dunn in a New York Times piece by John Koblin (7/3/14). "You’re running around, and you want to jump to dinner or back to the office or to the gym," says Andy. "You don’t want to have to deal with this bag." That bit of insight fits neatly with the Bonobos vision for the future of retail — stores where men can try some and buy some, but then have their purchases shipped, arriving at their home "a day or two later."
Bonobos, originally an online-only retailer of mens’ apparel, arrived at this concept in 2011 after opening "the lobby to its 25th Street headquarters with some fitting rooms to see if customers wanted to try them on. Sales started picking up for its shirts and its pants as well." This followed an earlier attempt to follow up its success selling pants online with shirts. "We made these great-fitting shirts and put them on the site, and no one cared," says Andy. "They weren’t selling well."
Bonobos has found other advantages to its 10 store — or Guideshops, as they call them — where nothing is in kept in stock. "You don’t have anyone manning a stockroom or playing defense against changing rooms where customers are dumping inventory in a corner," says Andy. "You don’t have the same folding nightmare or visual presentation nightmare." The only nightmare, so far, is making money — Bonobos has yet to turn a profit. But it is heavily backed in venture capital, and plans to open 30 more stores over the next two years.
The nexus of the mobile and physical worlds is obvious. "It’s called shopping," says Cyriac Roeding in a Forbes article by Hollie Slade (7/21/14). Since 2010, Cyriac has been developing this simple reality into Shopkick, an app that "can guide you through the clutter" of the shopping experience, "and reward your perseverance." Say you walk into Macy’s. First the app reminds you to open it, and then you are rewarded with points, or ‘kicks’ just for doing so and perusing "the most liked products you can buy in Macy’s."
That will yield "50 to 100 ‘kicks’," and, depending on the store, "you can get 500 more for scanning sponsored items and 1,000 more if you spend over $75 with a linked credit or debit card. You can redeem those kicks for a gift at Macy’s or something else, from a Starbucks card (1,250 kicks) to an iPad (125,000 kicks). This is the age of the invisible apps ‘that just notify us when something is going on’," says Mary Meeker, a trend spotter and venture capitalist.
So far, "Shopkick has racked up 7.5 million users" and "has been profitable since 2012." It does face competition from Apple’s iBeacon, "a Bluetooth signal that allows messages, like flash sales and discounts to be sent to nearby phones," but Shopkick now bundles iBeacon with its own app as ShopBeacon. "The conversion rates are very high," says Cyriac, by which he means "20% to 90%." "That’s the opposite of online shopping, where conversion rates are terrible," by which he means "maybe 3%."
The ‘Internet of Things’ portends new digital pathways to brand engagement and loyalty. A Hub White Paper by Michael Miller of Catapult. In today’s wired world, even the most basic human behaviors leave behind a powerful data trail. Our phone calls, the websites we surf and nearly everything online that we view, click, e-mail, buy, sell, post or forward—all of these data points generate unique digital footprints that marketers can use to reach customers with increasingly relevant messages that drive purchases and build brand loyalty.
The problem, however, is that such a disparate data network limits brands and retailers to a one-dimensional view of the consumer. CVS is unaware of the vitamin purchases I make at GNC. Kroger hasn’t got a clue which general merchandise items I buy at Costco. The same is true of Internet companies: What I ‘like’ on Facebook remains unknown to Google. Imagine what marketers could accomplish in a world of sentient computing where digital devices all ‘talked’ to each other (i.e., shared information across platforms), and where our brand interactions were not simply dictated by cataloguing what we type, download or surf, but literally were based on what we do. Read the rest of Michael’s white paper.
"The Rare Tea Cellar has a 1949 vintage pu-ehr tea that sells for $30,000 a cake," reports Hunter Atkins in Forbes (7/21/14). It also houses "Emperor’s Private Reserve Himalayan Dream ($8,000 a kilo), brewed from the finest strands of a tea leaf delicately plucked only beneath the light of a full moon." All told, The Rare Tea Cellar has "450 varieties of tea" for those who aspire to experience "a tea higher than what the Queen of England drinks."
The Rare Tea Cellar is also "a small warehouse of the world’s greatest edible wonders: finger limes from New Zealand, peels of lemons that grow only outside the pyramids of Egypt, sapphire salt from the Himalayas, honey truffles from Hungary, sea grapes from Okinawa, tree resin from Morocco, emerald pistachios from Sicily, and pepper berries from Tasmania." This trove is the brainchild of Rodrick Markus, whose mission is to find and deliver the world’s rarest ingredients to the world’s most adventuresome chefs.
"He’s out there finding stuff for the chefs that nobody else is," says Curtis Duffy of Grace, a Chicago restaurant. Rodrick also creates his own products, such as Rare Botanical Bitters, which he claims "turns even bottom-shelf liquor into a tasty bespoke cocktail." Some ideas — like beef jerky tea — didn’t catch on, but Rodrick says he delights in what he calls ‘F.U. ingredients.’ For example: "Rather than use a pecan, you use a wild hickory nut, which is ten times the cost because it takes four hours to crack."