November 19, 2015
November 19, 2015
Uberfication is wending its way into traditional companies, reports Christopher Mims in The Wall Street Journal (11/16/15). For example, at Crossmark, an in-store merchandising company, full-time employees use an app developed by Gigwalk to streamline their reports. Gigwalk was designed, in true Uber fashion, as a way to help companies manage freelancers to do similar work. That didn’t work so well, because it’s critical that store managers know and can trust the merchandisers — a requirement that’s difficult to fulfill with “rotating cast of freelancers.”
“One of the things I rely on in the stores I go to is relationships,” says Jarrel Gainer, who “builds those eye-catching stacks of Huggies or pyramids of canned soup that sit at the ends of grocery-store aisles” at Walmart stores. “They know when I start and finish the job it’s going to look good and they’re not going to have to question why I did it this way or that way.” So, rather than putting Crossmark out of business, Gigwalk is helping it move into the 21st century by “upgrading its information-technology infrastructure … It is as if Uber had decided to sell its technology to taxi companies instead of driving them into oblivion.”
Gigwalk is also re-balancing work and life for people like Jarrel, who used to spend “two hours a day on paperwork and data entry alone … At the end of the day, he would have to manually enter all he had done into a website on his personal computer at home.” With Gigwalk’s mobile app, “he does essentially all his work on a smartphone,” saving about two hours each day … “his longest workday is now 4-6 hours.” “The concept of the nine-to-five workweek is an anomaly of the 20th century, a product of mass production,” says Gigwalk CEO David Hale, suggesting that this is “just the beginning” of a new era of workforce management.
November 12, 2015
Technology startups are meeting “the growing needs” of the marijuana industry, reports Elizabeth Dwoskin in The Wall Street Journal (11/18/15). “In the cannabis industry, there are a lot of people who lose track of a lot of things,” says Nic Hernandez of La Conte’s Clone Bar and Dispensary in Denver. Nic uses an app called Flowhub to “keep his operation straight.” Flowhub “helps growers optimize factors like planting schedules, soil nutrients, and lightbulb replacement.” Other apps include Eaze, which “connects users of medical marijuana with cannabis dispensaries throughout California.”
“Potbotics Inc. matches medical research with queries from doctors and patients. Leafly Holdings Inc., an aspiring Yelp for hemp, harvests customer reviews of dispensaries and perceptions of the efficacy of particular strains for ailments from bipolar disorder to multiple sclerosis.” Big data meanwhile “offers pot growers, dealers, and customers the kind of bird’s-eye business perspective that mainstream industries have come to depend on.” When recreational use was legalized in Oregon, Leafly “found that clicks from Oregonians over 65 years old rose 835% compared with the previous year when pot use was strictly medical.”
Leafly was able to identify which varietals were most preferred. “You couldn’t collect this information previously because all the transactions and purchases were conducted in the shadows via an illicit market,” says Brendan Kennedy, CEO of Privateer Holdings, which “owns three pot businesses.” Legalized pot is growing like a weed, “expected to expand by nearly 86% on top of a 74% jump to $2.7 billion in 2014,” according to The ArcView Group. While some venture capitalists are jumping on board, mainstream companies like IBM and Salesforce have neither confirmed nor denied that they have any cannabis companies as customers.
November 2, 2015
Levi’s Eureka Innovation Lab is all about creating unique jeans on a mass scale, reports Matthew Schneier in The New York Times (11/6/15). Levi Strauss & Co. is a $4.8 billion business, and when its Dockers brand is included it “produces more than 100 million pieces per year in nearly countless styles.” Its Eureka Innovation Lab, which has been around just two years, is the source of lo these many variations on the denim theme. “We’re not very old here,” says Bart Sights, who heads the lab. “But this is 13,806,” he says, referring to a recent recipe.
Eureka “is a nerve center and skunk works for innovation, a place to test out new treatments, new finishes and new ideas.” Even though Levi’s mass-market jeans are made using synthetic dyes, Bart keeps a vat of “naturally fermented indigo dye” on hand for inspiration. “Really, it’s like our blood,” he says. “This is what we came from.” Where they are headed is to replicate any number of “colors, fades, finishes and degrees of wear.” Sometimes these are based on wear patterns from jeans worn a century ago by miners, and other times jeans simply worn for a while by a designer.
If you own a pair of “distressed” jeans, the look “may have been developed by a Eureka employee, etched on a sample pair using sandpaper. GoPro cameras on each workstation record the process, and when a pattern is complete, the video is edited into a kind of digital instruction manual to guide those who will do the distressing on a larger scale at the factories Levi’s uses.” Where the designer may have used sandpaper, the factory will use laser technology to achieve the effect. Design chief Jonathan Cheung calls the faux finishes “an homage to human nature.”
October 27, 2015
Every brand has a story of some kind, and the brand is essentially the telling of that story. This can be trickier than it sounds because a story, by definition, has a beginning, a middle and an end. This is not necessarily a good construct for branding. Most people either can’t remember or have only the vaguest recollection of the beginning — the brand ‘origin’ story, as it’s often called. Perhaps this is because so many brand stories start out the same way: one or two, or maybe three or four guys (usually) had an idea and hatched it on a kitchen table or workbench. The beginning also tends to be forgotten because it is often a relatively short passage in the story, set long ago and far away — although it typically sets forth an ultimate truth against which the brand’s worth is tested over the rest of its life.
Further complicating matters, the story has no end! Or, if it does, it is an unhappy ending because it’s over for the brand. Kaput. The upshot is that brands are endlessly suspended in the middle of the story, trying to remember the beginning and hoping it’s not the end. It is not a comfortable place, and just about every brand at some point loses its way. This, of course, is another essential element of any story: conflict. Inevitably the brand, as hero, digs itself into a hole and then digs itself out … or not. Whether it survives, and lives on in the middle of its story, ultimately is a question of how well it connects with its essential truth, the thing that made the brand a success in the first place. That is, its purpose.
Then there’s the paradox: Every great story is some mixture of fact and fiction. This is invariably true, but especially so in the brand experience. Features and benefits are the stuff of products and services. The magic of brands is in the myths they create — the stories that are not literally true, but that resonate as true. Myths are metaphors for the truth. With this in mind, we fielded a simple survey of Hub readers in which we asked respondents to evaluate two-dozen highly successful brands. Does their brand story ring true or false? It’s another way of asking whether the brand is keeping its promise, or not. Continue Reading.
October 20, 2015
Microsoft hopes its new five-story flagship store will create stronger consumer connections, reports Keiko Morris in The Wall Street Journal (10/26/15). “It is a concerted push to become a consumer brand as opposed to a brand consumers know,” says Greg Portell of AT Kearney. While Microsoft is well-known “for its office software products,” some customers are unaware that “the Xbox system is a Microsoft product.” Microsoft also hopes to create stronger awareness of its “tablets, its new Surface Book laptop and its new fitness device, Microsoft Band.” The new store is designed not only to display these product but also give shoppers an opportunity to “hold and test them.”
Microsoft is pursuing its goals with “a five-story glass storefront at 677 Fifth Ave. in Manhattan,” that will reach “a global audience of tourists and local shoppers.” “We believe that they will leave with an experience of understanding who we are,” says Microsoft retail chief David Porter. The sides of the store’s first floor is lined with LED digital panels, and a 20×40-foot “culture wall” projects an “exterior display of non-commercial digital imagery that will change and complement the architecture and facade of the building.” The company’s newest products are presented on wood tables and stools, and customers will be able to “play Xbox on an 84-inch monitor in space that’s visible to passers-by.”
The second floor has “large areas for playing Xbox games, as well as an answer desk and community theater” featuring some “70 hours of workshops a week.” The third floor is dedicated to the “Dell Experience at the Microsoft store” while the fourth floor “provides space for employees and other back-store operations.” The fifth floor is dedicated “space to host meetings and events.” “Experiential retail is the wave of the future,” says Robert K. Futterman, a real-estate services executive. “Keep the customer in the store, keep them engaged. The longer they stay, the better chance you have they will buy stuff,” he says. Fifth Avenue rents, between 49th and 60th Streets, reportedly exceed $3,000 a square foot.
October 16, 2015
Researchers find that humans think of corporations and people in similar ways, reports Robert M. Sapolsky in The Wall Street Journal (10/19/15). In the study, Mark Plitt and colleagues at Baylor College of Medicine “presented some of their 40 subjects with vignettes of actions taken by humans or corporations that were either prosocial (e.g., donating money), neutral (e.g., buying a printer) or antisocial (e.g., breaking the law).” A control group was shown “Wikipedia descriptions of randomly chosen nouns.” The results skewed slightly negatively against the corporations versus the humans — “their prosocial acts elicited less positive emotions, and their neutral or antisocial acts elicited more negative emotions.”
The study’s participants “also underwent functional brain imaging while reading those vignettes” and found that their brain responses to corporate and human acts were similar.” Both produced “activation of a familiar brain network involved in ‘mentalizing’ — that is, performing social cognition tasks such as understanding someone else’s motives and perspectives.” The “mentalizing” network was also activated when the study’s subjects “contemplated corporate actions” as compared to those of “inanimate objects … In other words, people used similar parts of the brain to understand corporate and human behavior.” This doesn’t mean that people think of corporations as people, but it does offer “further evidence of the ambiguity as to who and what qualifies for personhood.
“At least one European legislature has granted personhood to other apes. The first legal challenges regarding personhood for robots could be just around the corner. At the same time, as psychologist Susan Fiske of Princeton has shown, we don’t necessarily activate that mentalizing network as much when contemplating people who are ‘others’ to us, such as the homeless.” Further research might explore whether people “implicitly imagine the humans at the helm of the corporation” or whether “subjects from a country with a less corporation-dominated culture react in the same way.” The Baylor research was published in an academic journal, Social Neuroscience (link).
October 15, 2015
Danny Meyer has decided that tipping is old hat, reports Corinne Ramey in The Wall Street Journal (10/15/15). “It’s a very odd American tradition that we think is an anachronism — that thousands of dining patrons have a better bead on what a server should be paid, or what a cook should be paid, than we do,” says Danny, whose Union Square Hospitality Group runs 13 restaurants, including the Modern, Gramercy Tavern, and Union Square Cafe. So, instead, his restaurants will add 20%-25% to its menu prices, “offsetting the average 21% tip at the group’s restaurants, so total dining costs wouldn’t change much.”
Danny also says it’s unfair that servers get tips but those in the kitchen do not. “It feels really bad at the end of a busy night, when you see that part of your team is giving each other high-fives and making extra money, and the other part of your staff is feeling great about cooking great food, but all they got extra was perspiration,” Danny says. The other issue is that “many restaurants — including the Modern … are struggling to find qualified kitchen workers.” Danny’s plan is to keep server compensation the same while increasing pay for line cooks from about $12.50 an hour to $14.00.
“Enterprising business people are thinking about their employees, they’re thinking about their customers, and they’re thinking about how to adjust to an environment where there is pressure to raise wages,” says James Parrott of the Fiscal Policy Institute. Danny is not the first NYC restauranteur to try dispensing with tips, and Melissa Fleischut of the New York State Restaurant Association thinks others may balk because patrons might object to higher menu prices. It may also make it tougher “to attract good servers.” The no-tip policy will not apply to Danny’s Shack Shake restaurants.
October 15, 2015
Intel and Twitter are using sentiment-analysis software to get a better read on their organizational health, reports Rachael King in The Wall Street Journal (10/14/15). The software, called Kanjoya, “uses language-processing and machine-learning algorithms to decipher emotions from text. The program analyzes the language workers use in open-ended survey questions and in blog posts to determine their underlying emotions, including frustration, disappointment or anger.” Richard Taylor, svp of human resources for Intel, says the company turned to this approach after getting “to a point where we have a hell of a lot of data and not necessarily that much knowledge.”
Kanjoya has been used to analyze “a set of internal blogs where employees could comment on diversity-related topics, including a $300 million, five-year diversity plan for the US workforce … While the blog comments were positive overall, the software identified agitation among employees who responded to a post by the company in June announcing it would pay double the employee-bonus if an employee referred a minority job candidate or a veteran and that person was hired. Some who posted comments wondered if this was reverse discrimination or if Intel was breaking the law.” While the messages were clear, the software helped “drill deeper into what other motivations might lie behind their comments.”
The software uncovered “that ultimately people were expressing frustration and fear based on a misunderstanding — a wrong impression that their own jobs were at risk,” which Richard says “couldn’t be further from the truth.” At Twitter, Kanjoya is used to analyze the results of open-ended questions in an employee survey that yield a richer response. In the past, says Twitter’s Subhadra Dutta, people got bored with multiple choices and just hit all 3s, yielding a neutral, unreadable response. Privacy is a concern with Kanjoya, but Richard says Intel takes care that only statements made “in a known public forum where they know their stuff is being looked at.”
October 5, 2015
A “stigmatizing attitude towards error” is a major obstacle to success. “Success brings its own rewards, but the world comes down hard on those who are deemed failures,” reports the Economist (10/10/15). “The desire to avoid such opprobrium prompts people to cover up mistakes,” according to Matthew Syed, author of Black Box Thinking: The Surprising Truth About Success. “Doctors tell patients of ‘complications.’ Police fail to drop cases against people accused of committing a crime, even after clear evidence emerges of their innocence. Politicians plow on with policies even when it is obvious they are not working. All are psychological strategies to avoid admitting fault.”
“The medical profession is especially intolerant of mishaps … This means that mistakes are not scrutinized and people do not learn from them … According to one study of acute care in hospitals, one in ten patients ‘is killed or injured as a consequence of medical error or institutional shortcomings’,” writes Matthew. One solution is to “make it easy for people to own up or speak up, as the airline industry has learned to do better than any other.” A “more novel suggestion … is the rigorous testing of business strategies … The gold standard is the ‘randomized control trial‘ (RCT), in which a treatment group is compared with a control group.”
“Capital One … has used RCTS obsessively — over the fonts it uses” as well as “the scripts at its call centers to assess which initiatives fail and which do not. James Dyson, a technology entrepreneur, and Google are other cheerleaders for this hyper-rational school of management.” David Halpern, author of Inside The Nudge Unit: How Small Changes Can Make a Big Difference, “offers an interesting, if familiar, discussion. Identifying points of failure and making small changes, he argues, reaps disproportionate gains.” David heads the British Government’s Behavioral Insights Team, aka “the nudge unit,” which, among other things, increased organ donations on car-tax form simply by appealing to the taxpayer’s “sense of humanity.”
October 2, 2015
An emerging women’s sports brand is linking feminism, athleticism and consumerism, reports Lindsay Crouse in The New York Times (9/30/15). Oiselle, founded eight years ago, wants to be “the thinking women’s brand,” says its founder, Sally Bergesen. “Women’s companies tend to get into a game where they don’t want to offend anyone, but we’ve never been shy about saying we care about winning too, and that’s worked for us,” says Sally. Oiselle is also positioned “against corporate monopolies in sport to reinforce its image as a scrappy, athletes-first, community-driven brand.”
Oiselle’s “latest milestone” is that it has become “the first solely women’s sports brand to outfit a major college running program: the cross-country and track teams of Yale.” The goal is “to galvanize a new generation of female distance runners, many of whom reach their athletic prime long after they’ve outgrown the organized athletic programs that engage girls.” “The national race-running model is focused on high school and college, when males hit their athletic crescendo, but many women run their fastest distance races between ages 26 to 38,” says Bob Lekso, himself a former Yale track athlete, and now an Oiselle “financial advisor.”
“By sponsoring Yale track, Oiselle is exposing itself to a community of motivated women who will likely keep pushing themselves later in their athletic careers, and bring their friends, whom the running community might otherwise lose,” he says. Oiselle is also taking a different approach to uniform design. “Women’s track uniforms have been the same for so many years that people haven’t seemed to think about the opportunity for something different, to make them look better and maybe mean something, too,” says Sally. The hope is that having a different kind of uniform (versus the Nike standard) will also help with Yale’s recruiting.
September 10, 2015
Marriott is tinkering with the hotel room of the future in its innovation lab, reports Andrea Petersen in The Wall Street Journal (10/1/15). It seems that “fancy shampoos and crisp white duvets” are no longer enough and that it’s more about the number of electrical outlets and the size of the desk and closet. The closets actually are getting smaller because millennials tend not to unpack. Desks are shrinking, too, because younger guests oftimes work from the bed. As for the number of outlets — the optimal number is “10 electrical outlets and USB ports” because “the typical traveler totes five devices.” Carpets, meanwhile are being replaced by hard surfaces because guests suspect that the carpets aren’t very clean.
Armoires are also being shelved because it’s no longer necessary to house big, bulky televisions, and travelers aren’t using the drawers as much anyway. The problem is that the carpets and the armoires helped muffle television noise and “clicking heels.” One solution is to put “honeycomb soundproofing material” on the backs of flat-screen TVs. Another is to add “sound-proofing in guest room walls, floors and ceilings. This isn’t difficult to do in new buildings, but is trickier when renovating existing ones.” Marriott tests out these and other new ideas at its innovation lab, where members of its loyalty club — and those of its competitors — are invited to spend time and be observed.
The bathroom is another major focal point: “In its AC and Renaissance brands, Marriott is moving to what it calls deconstructed bathrooms. The toilet and shower remain in the bathroom. The sink is open to the rest of the room, with a frosted glass divider providing some separation.” This is so one guest can use the shower, for example, while the other is putting on makeup. Marriott collects feedback on changes via a guest survey after a stay — only about one percent fill it out but Marriott finds this useful. For example, an idea to replace empty in-room fridges with a Nespresso machine was nixed after guests said they liked having the empty fridge. So much for “an upgraded coffee experience in the morning.”
September 8, 2015
A new restaurant in San Francisco “is almost fully automated,” reports Claire Cain Miller in The New York Times (9/9/15). Eatsa, which specializes in quinoa dishes, has “no waiters or even an order taker behind a counter. There is no counter. There are unseen people helping to prepare the food, but there are plans to fully automate that process, too, if it can be done less expensively than employing people.” Patrons first browse the menu on flat-screen monitors, place and pay for their orders via iPad, and then pick up their food at a “cubby” where food is deposited behind a blank screen that opens when tapped.
“Technology allows us to completely re-think how people get their food,” says Eatsa founder David Friedberg, a software engineer. While automated eateries are nothing new — Horn & Hardart automats, for instance — “Eatsa goes well beyond that by using software and supply-chain innovation to fundamentally change how a restaurant runs.” Andrew McAfee of MIT and co-author of The Second Machine Age, thinks Eatsa is of the future. “I think for a lot of the meals I’m going to want to eat out in five years, if I don’t deal with a person, that’s not going to be a net negative for me at all,” he says.
David says the point is not to eliminate people, however. The idea is rather to “open a fast-food restaurant that aimed to be faster, tastier and less expensive.” He settled on quinoa because, he says, it’s “a much more efficient way to deliver protein to people than animal protein.” Critics say the concept is a jobs killer, but David sees only growth potential. “The reality is the economic growth from new technology has always resulted in new economic activity and job descriptions,” he says. These might include “building automated machines and software systems — or growing quinoa.” While currently just one restaurant, Eatsa has “national ambitions.”
September 4, 2015
Dwayne Chambers, chief marketing officer of Krispy Kreme, details the iconic brand’s secrets of success at Hub Live: The Retail Experience Symposium. The most important thing to know about Krispy Kreme is our mission: To touch and enhance lives through the joy that is Krispy Kreme. That is not just something that is written on plaques; we talk about it all the time. We have senior-executive meetings every week where we talk about the things we do and decisions we make. These decisions are not always black-and-white, but inevitably it comes down to living our mission “to enhance lives through the joy that is Krispy Kreme.” This is what gets us to the logical decisions that align with who we are.
That’s a hard thing to do. Being a public company makes it even harder. We have all these metrics. When I came to Krispy Kreme, I was asked about business objectives. What they were expecting was sales, transactions, average check and those kinds of things. In my opinion, those are results of having the right objective. Immediately, somebody said that this sounded like a little bit of a marketing cop-out. The answer to that is: Is it easier for me to turn around some sales or to touch and enhance people’s lives? I would say that it’s much harder to touch and enhance people’s lives.
The other part is, when we start missing our expected results, we don’t look at the typical things. We look back at our mission and whether we were enhancing people’s lives the way we were supposed to. Our former CEO, who is now our chairman, was always one to talk about how we’re not in the doughnut business. We create far more than that. That’s the key for us. I have investors who come through quite often, who will say things like: So, inevitably, you will have to expand the menu when doughnuts aren’t relevant anymore. I respond by saying that this assumes we’re in the doughnut business, but we’re not. Secondly, we’ve been doing it for about 78 years. If you look at the relevance of what we do, it’s about joy. Continue Reading The Krispy Kreme Story.
September 2, 2015
The very first Google logo was a scan of the back of Larry Page’s hand, according to Wikipedia. At the time, the company was known as BackRub, and Sergey Brin was the graphic artist. Sergey also created Google’s first two logos, “using the free graphics program GIMP,” in 1998. At the time it included an exclamation point (image), aping Yahoo! Ruth Kedar, a graphic designer, brought a professional touch to the logo in 1999, and it hadn’t changed much since then — until this past Tuesday when the search giant unveiled its first major overhaul in 16 years.
Ruth’s design “was based on the Catull typeface, an old-style serif.” She recalls: “We ended up with the primary colors, but instead of having the pattern go in order, we put a secondary color on the L, which brought back the idea that Google doesn’t follow the rules.” The new logo (image) continues to feature the brand’s famous colors, albeit tweaked. The big change is going sans serif, rendered in a Google-designed typeface called Product Sans. Reviews have been mixed, to say the least, but of course Google says it has its reasons for the change.
The official rationale is functionality. Google says the old logo was fine for use on desktops but the new one is designed to work well on any kind of device or platform, no matter how tiny, and represents the “Google of the future.”(link). Others note the timing of the new logo, following the announcement of Alphabet, Google’s new parent company. Allen Adamson of Landor sees a logical link within. “They’ve almost taken a step toward Sesame Street with this change,” he told Bloomberg News, adding that the new logo “feels less corporate and far more friendly,” which makes it feel “easier to use.”
August 31, 2015
The big distillers believe they can be just as “crafty” as the little guys, reports Saabira Chaudhuri in The Wall Street Journal (8/29/15). Pressure to respond to the rise of craft-spirits distilleries is evident in that their numbers “have mushroomed in the US to 588 from 51 over the past decade.” The American Distilling Institute also projects that “craft-spirits makers’ share of the US spirits market could rise to as much as eight percent by 2020 from the current one percent.”
“The brand equity of the word ‘craft’ is spectacular,” says Tom Mooney of the American Craft Spirits Association. “It implies more care, greater quality, that you’re supporting something from within your community.” Bill Owens of American Distilling Institute says that this is “a story that the big boys can’t tell.” Diageo CEO Ivan Menezes disagrees. “Craft is just a label,” he says. “The real question is, how do you engage with consumers around authenticity, craftsmanship and stories that resonate?” There’s also a technical definition of craft production as “less than 100,000 proof gallons.”
Diageo is addressing all of the above with Barterhouse Whiskey, “which it describes as having notes of roasted grain and charred oak with a brown-sugar finish,” and Old Blowhard Whiskey, which is “hand bottled.” Larry Schwartz of Diageo says the goal is to become the largest craft-distillery in North America. Colin Spoelman of Kings County, a craft distillery, says the big guys have an advantage in their “inventories of well-aged whiskeys. It’ll be interesting to see in five or 10 years where things stand,” he says.
August 4, 2015
When Henry Wells and William Fargo established Wells Fargo in 1852, omnichannel meant the efficient delivery of messages and financial services by ship, horseback, railroad and stagecoach. It wasn’t long before the telegraph enabled electronic transactions, later followed by radio, the telephone and, of course, the World Wide Web. Yet while the technology that animates the Wells Fargo brand experience has changed dramatically over the past 160 years or more, the essence of that experience has remained remarkably unchanged. Then, as now, the mission is to help customers — whenever, wherever and however needed. To this day, the Wells Fargo culture is grounded in the philosophy that providing financial services is more about building relationships than enabling transactions.
In other words, omnichannel is not about the channels, or the means through which Wells Fargo communicates or delivers services to its customers; it is about the many interactions that color its customers’ daily lives. As Chief Marketing Officer Jamie Moldafsky explains: “We think of the brand experience as the totality of how people feel about our brand and engage with it … There is that very practical, rational level of just getting things done as quickly and efficiently as possible, but connecting with the brand emotionally goes to a different place. It means we’re committed to the relationship and are always there to help our customers.” That might sound kind of warm-and-fuzzy, especially for a bank. Then again, money certainly packs an emotional punch, and a focus on how customers feel arguably is more important than anything else.
This presents challenges not only for Wells Fargo, but also every brand striving to balance the efficiencies of technology with the vagaries of humanity. The bottom line is that Wells Fargo today is the most valuable bank on earth, with a market capitalization of $300 billion. The Wall Street Journal reported that this is “thanks largely to its relatively simple business, which doesn’t rely on many complex derivatives or risky trades using borrowed money.” It simply accepts deposits and lends that money, not unlike the way Henry Wells and William Fargo (also founders of American Express) did it back in the day. This speaks to the values that guide the Wells Fargo brand experience every bit as much as the way its associates treat customers at local branches across America. “It’s not just about providing the right solutions,” says Jamie. “It’s understanding who our customers are and why we have the right solution.” Read The Hub Interview with Jamie Moldafsky
July 10, 2015
“Chuck Taylors have become a very important source of Nike revenue and earnings growth,” reports Jeff Sommer in The New York Times (8/2/15). Converse, which first introduced its All Star sneaks in 1917 and Chucks in 1934, “is now the only Nike operating unit whose revenue and earnings are disclosed separately in Nike’s income statements.” Converse was acquired in 2003 for $305 million in cash, at a time when its revenues were just $205 million and Nike’s annual revenue was $10.7 billion. Converse had gone into bankruptcy just two years before Nike acquired it.
Today, Converse shows profits of “$517 million, compared with $4.2 billion for Nike overall” and “has been growing faster than the rest of Nike.” It currently “sells more than 270,000 pairs of Chuck Taylors a day, 365 days a year … That works out to 100 million pairs a year.” Sales may accelerate even more with the introduction of the Chuck Taylor All Star II, which feature a more comfortable sole and are priced $20 higher than classic Chucks. “A lot of our customers said they wanted Chuck Taylors to be more comfortable,” says Converse general manager Geoff Cottrill.
The new design is not a performance sneaker, just a more comfortable version of classic Chucks. Purists may not like it, but Geoff says the key was to offer a “new” kind of Chucks without discontinuing the “classic” style — avoiding the mistake Coca-Cola made when it replaced its original cola with a new version. “A considerable number of people believe the original classic Chuck is the most comfortable sneaker in the world,” says Geoff. “We’re not changing that sneaker.” The first wave of the new shoes reportedly “sold out within 24 hours,” at least in “most sizes and colors.”
July 7, 2015
Panera’s head chef Dan Kish says his “family’s farm informs his work,” reports David Gelles in The New York Times (7/5/15). The farm in question was that of his grandparents, where his “grandfather would squirt cow’s milk straight from the udder into his mouth” and his grandmother “taught him how to cook on a white enamel Westinghouse gas stove.” Dan has since been trained at the Culinary Institute of America, “worked at fine restaurants” and “apprenticed with a Michelin-starred chef in the French Alps.” He joined Panera ten years ago.
“My approach to food is pretty fundamental,” says Dan. “I want people to experience the quality of the ingredients, rather than something manipulated with additives.” Eliminating high-fructose corn syrup is one of his chief goals, because he believes it contributes to obesity and is also not “something you’d find in your home pantry.” So far, Dan has eliminated the syrup in “salad dressings and most pastries.” Soft drinks are more problematic, but Panera is working with PepsiCo “to come up with syrup-free alternatives to Pepsi, Mountain Dew and Sierra Mist.”
Ten years ago, Panera “became one of the first national chain restaurants to stop serving poultry raised with antibiotics.” Panera stopped using trans-fats in 2006, and in 2010 “became the first big restaurant chain to tell customers how many calories were in each item on its menu,” before FDA mandated such initiatives. Last year, Panera introduced its No-No List” of “more than 150 ingredients it either no longer serves or plans to phase out.” CEO Ron Shaich says it’s up to the industry to evolve along with Panera. “The marketplace may be the most powerful way to effect change,” he says.
July 7, 2015
Some corporations are re-designing offices to bring the outdoors in, reports Keiko Morris in The Wall Street Journal (7/2/15). “People were leaving the office to get better coffee, to get fresh air,” says Jacqueline Barr of Ted Moudis Associates. “Employers went, ‘Hold on a minute. Why aren’t we making those opportunities inside the office?'” The idea to introduce outdoorsy elements into office design is in many ways a response to “the stress people experience in the work environment,” says Brenda Nyce-Taylor of Gensler, a design firm. “The connection to the outdoors is a restorative thing in terms of our psyche.”
Among Gensler’s clients is Dressbarn, which “decided it wanted to create a much closer connection with the outside world at its Mahwah headquarters, where it moved after being in a cavelike office without windows. The new office has skylights and floor-to-ceiling windows with views of the hills. Reclaimed wood from pallets is used throughout the cafeteria, which serves produce grown in the vegetable garden on the premises.” “The minute you walk into the place, you almost feel like you’re outside,” says Dressbarn president, Jeff Gerstel. These “biophillic” touches can have an important effect on productivity.
“Biophilia” is a “theory that humans have an inherent affinity with nature and that this kinship plays a role in physical and mental health … more natural light, as well as different vistas, colors and patterns, can help nurture creativity, improve moods and enhance the ability to focus.” Stephen R. Kellert of Yale says the more traditional windowless, cubicle setup can have the opposite effect. “We have put ourselves, ironically in these inhumane, sensory-deprived, barren spaces,” he says, where people “get tired more readily. They are bored … and don’t think critically or solve problems as well.”
Keeping the brand promise starts with working together. A Hub Magazine roundtable discussion featuring Ram Krishnan of Frito-Lay, Kim Lefko of Weber Stephen, Josh Kern of Smashburger, Rick Dery of Gulf Oil, and Hugh Boyle of TracyLocke.
What is the secret of successful collaboration?
Ram Krishnan: The end-to-end consumer experience is owned by the entire enterprise. It’s not owned by one single function like marketing. This is especially true in an organization like Frito-Lay, where we have a sales force of 30,000 frontline, direct-store-delivery people, who call on stores and interact with store managers and consumers. They are part of owning the entire experience.
In addition, in marketing the job description is no longer as a marketer, but as a marketing technologist. This is driven by changes in three things: consumer’s expectations of having two-way conversations, technology, and data. There is no longer a single, awesome person who has all the information on everything that’s needed to build great marketing programs.
Great collaboration starts with the overall vision for the project or the assignment. Make sure that everyone knows from day one what the bigger picture is. Second is making sure you have brought the right people together from the start of the process. Don’t just bring them in towards the end and add in the PR element or the like. The third thing is to try to remove the barriers for the team. I always look at my role as CMO to be more as a facilitator than a direction giver. You also want to celebrate even minor accomplishments throughout the process and reward successful collaboration. Continue Reading.