The Hub Cool News

Patagonia Profits

patagonia-wetsuitPatagonia’s "unusual commitment to sustainability" sometimes comes "at the expense of its bottom line," reports Diane Cardwell in The New York Times (7/31/14). "Business that puts profit above people and the environment is not going to be a healthy and sustainable way for us to live and for the planet to survive," says Patagonia CEO Rose Marcario. Rose adds that company founder Yvon Chouinard has "said that every time he made a decision that was right for the environment, it made the company money, though sometimes not for a while."

One of Patagonia’s newest products, a wetsuit that "is made not from conventional petroleum-based neoprene but from a natural rubber derived from a desert shrub," is a case in point. "Instead of holding the manufacturer of the rubber, Yulex, to a yearslong exclusive contract, Patagonia is encouraging its competitors to use the product, hoping to see its use grow and drive down the price." This is in the tradition of Patagonia’s introduction of "organically grown cotton products in the 1990s," which lost both customers and money.

However, the suit, "priced at $529 – $549 … will earn the company money and bolster its green credentials, an important part of how it tried to appeal to customers." Mitch Taylor, a surfer, is sold: "I was really stoked on it," he said. Another surfer, Walter Valesky, was less enthusiastic, noting that he could get a good used surfboard for that money. Yvon’s son, Fletcher Chouinard, remains optimistic: "People are starting to put their money where their mouth is, but it’s slow," he says.

Sephora Photos

coloriqSephora is using visual data to achieve an in-store experience that couldn’t happen online, reports Issie Lapowsky in Wired (8/1/04). Sephora’s "new flagship location in New York City … is filled with digital accents designed to bring the brick-and-mortar experience closer to the world of online retail, including everything from a touchscreen quiz for finding the best perfume to a skincare product finder that culls e-commerce data and serves up online reviews."

However, Sephora is also using technology in its stores that can "unlock some interesting data that brands could never collect online. The most obvious example of that … is a program called ColorIQ, which attempts to match shoppers’ skin tone with the appropriate shade of foundation. To do that, Sephora partnered with Pantone to identify every possible skin tone in the world. They then created a piece of hardware that filters out external light to photograph a shopper’s exact skin tone and match it to makeup that’s in stock."

Using ColorIQ revealed "that some of the 121 skin tones identified were more popular than others" but Sephora didn’t have products "for several of the most popular tones." The retailer has since "worked with brands to build out a more diverse range of shades." "Brands had never been able to see that data before says Sephora marketing chief Julie Bornstein, who adds: "I feel strongly that physical retail will never go away … It’s been a pastime since the beginning of mankind.”

Under Armour Pirhouettes

misty-copeland-uaUnder Armour hopes to connect with women by featuring a non-athlete in its advertising, reports Andrew Adam Newman in The New York Times (7/31/14). Of course, describing ballerina Misty Copeland as a "non-athlete" is debatable, as Misty herself observes. "A lot of people think of dance as a really sort of frivolous thing, that you just kind of get on the stage and twirl around," she says. However, she adds, "we are just as hardworking as any athlete." The Under Armour commercial in which she’s featured supports her point.

In the commercial (link), Misty "rises to the tips of her toes, the muscles in her calves as angular as bent elbows, and her bulging quadriceps resembling a soccer player’s." Under Armour’s Leanne Fremar says Misty "brings a modern athleticism to a very traditional art form, and she pushes the boundaries on the status quo of the word ‘athlete’ … There are a lot of sports, activities, hobbies and passions that women are engaging in that are athletic and physical and should be celebrated, whether it’s dance or soccer or kickboxing or spinning."

Under Armour’s other female athlete endorsers include skier Lindsey Vonn, tennis player Sloane Stephens and soccer player Kelley O’Hara. Advertising critic Barbara Lippert says the Misty commercial, which also communicates the obstacles she faced as an African-American ballet soloist, is effective because "it doesn’t feel forced and manipulated and the same old, ‘We can do it gals,’ sort of thing," adding that the spot is "very powerful because she has a very interesting story and is an inspirational figure."

Petite Creme

petite-cremeStonyfield 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.

Bet The Ranch

ranch-dressingClorox 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.

Big Blue Skies

john-kennedy-ibmIt was headline news, in 1956, when Arthur L. Samuel of IBM programmed a computer to play checkers. What made this feat so remarkable was that the computer actually learned from its experience. This was a first, and a blinding flash of the future of artificial intelligence. And, yes, this particular revolution was televised! Six years later, IBM’s computer went on to defeat checkers master Robert Nealy, sending a chill down the spine of human beings everywhere. More than a half-century later, we are still trying to come to terms with the implications of a machine’s capacity to outperform people — and IBM continues to lead the way into a world where technology and humanity not only coexist, but also prosper together. The tension created when machines begin to ‘think’ is particularly pronounced within the universe we all know and love as marketing.

The rise of big data, accelerated by the flood of information produced by social networks, sparks considerable controversy. Some embrace big data for its potential to shed new light on the relationship between brands and their customers, while others dismiss it as just another buzzword, perhaps finding solace in criticizing what they don’t yet understand. Today’s version of Arthur Samuel’s computer is IBM’s Watson, which you may remember as the machine that won a game of Jeopardy! a few years ago. More recently, Watson demonstrated the ability not only to process data within a vernacular context, but also reason to the point where it can effectively make arguments for and against any given point-of-view (see sidebar).

It’s not as alarming as it might sound, and IBM’s John Kennedy is here to comfort the uncomfortable on issues of big data, cognitive computing and artificial intelligence. For all the apparent complexity of a landscape awash in data, his message is simple: The essentials of building powerful brands remain the same. However, the future belongs to those who use available data to bring unprecedented insight and understanding into customers’ daily lives and the many ways in which they experience brands. As John expresses it: "Marketing now is not so much in service of selling — which helps the marketer — but more in service of what the customer wants to do." Anything less, and guardians of the brand experience may well find themselves losing at checkers while their competitors are winning at chess. Read The Interview with John Kennedy.

Lego Fusion

lego-fusion-smLego’s newest offering bridges “virtual and physical play spaces,” reports Wilson Rothman in The Wall Street Journal (6/21/14). Called Lego Fusion, the “idea is simple: Build something using the special platform and bricks … then launch a free app on your Android or iOS device. Take a picture of your creation, then watch as it gets sucked into one of four virtual worlds on your smartphone or tablet.” The target audience is “7- to 12-year olds (and let’s face it, their gleefully Lego-obsessed parents.)”

Among the games is Town Master, which lets users “build houses and other structures” and Battle Towers, where you repair “your damaged citadels in the real world, using Lego bricks, of course.” Then there’s Create & Race, where rather than “building a car and then taking a picture of it, you design it in the app, then get step-by-step instructions on how to construct it with bricks.” Different color bricks serve different purposes; for example, a red brick “might make your car go faster, while a blue one could give it a turbo boost.”

By logging in with a Lego ID, you can race against friends, or, in Town Master, “visit other people’s towns and share yours with others.” The limitation is that users must “build on special platform pieces (which help the app’s image recognition to work), and the app only imports what is essentially a two-dimensional facade of your structure.” However, kids “will no doubt start dreaming up castles, cars and bungalows that even the game’s developers could never have seen coming.”

DreamHouse

shrekWe’ve just begun to scratch the surface with experiences,” says DreamWorks Animation’s chief brand officer Michael Francis in a New York Times piece by Brooks Barnes (6/18/14). Experiences matter to DreamWorks because “movies by themselves are a slow to no-growth business. A lasting film enterprise, at least in today’s marketplace, must have other engines.”

For DreamWorks, this includes DreamHouse, a “2,000 square-foot ‘cottage’ with walls that are essentially video screens,” to be installed at shopping malls during the holidays. Inside, naturally, is Santa Claus, and children will be able to “go on a virtual sleigh ride with Shrek” before they meet him. “No more waiting in line; appointments will be made by app.” DreamWorks is also diversifying into television and the Internet, most notably with AwesomenessTV, “a thriving collection of YouTube channels focused on teenagers,” and DreamWorksTV, “a family-oriented YouTube channel.”

The studio is also snapping up former Disney executives, such as former Disney Stores chief Jim Fielding (a Hub Live headliner!) who is “leading a September charge into stores” with AwesomenessTV products. Michael Francis, himself a former Target Stores CMO, is also moving into “higher-end retail,” working with “fashion designer Jeremy Scott, for instance,” on a clothing line for young women, perhaps including a Shrek bra. “Everything we are doing is carefully designed to make our brand continue to ascend,” says Michael.

WeatherTech Mats

weathertech matsDavid MacNeil has made a boatload of money "wrapping $150 car floor liners in the flag," reports Dale Buss in Forbes (6/16/14). David is founder of WeatherTech, which he started with "a $50,000 second mortgage" in 1988, and is today a $400 million business. After noticing "the poor quality of car floor mats," he "began importing expensive mats from the United Kingdom" and then switched to "an American contract manufacturer." David’s next move was to measure each vehicle digitally to produce "a precision-fit liner."

He also designed his mats "to trap water, road salt, mud and sand, and edges that ride all the way up to the top of each foot well — a sine qua non for picky car owners trying to protect their investments. Its thermoplastic elastomers don’t turn brittle in midwestern subzero temperatures or break down in summer heat." His next move was to bring all manufacturing in-house, and make a virtue of ‘Made in the USA.’ He figured "there’s a competitive edge to having his factory next to his office and not a half a world away."

David’s plan, however, was not just about a ‘Made in the USA’ advertising message; keeping production at home ensured product quality and on-time delivery to his high-end customers. He pays his semi-skilled employees as much as $20 an hour (the average for comparable work is $16) and refuses local tax abatements because of "strings attached." "If I had to report to a board, there are some decisions I couldn’t justify," says David, who is now dabbling in new products, including a TSA-safe plastic belt for men.

Alliance Rubber

rubber bandBonnie Swayze keeps her ‘Made in the USA’ rubber-band company growing by finding new uses for rubber bands, reports James R. Hagerty in The Wall Street Journal (6/2/14). Alliance Rubber is a family-owned, 150-employee business, and it gets plenty of competition from manufacturers in Thailand and China. In addition, "some of the biggest traditional uses for the product — such as holding together newspapers and bundles of mail for home delivery — are withering away."

Yet Alliance Rubber enjoys sales topping "$35 million a year — higher than ever and up from $26 million a decade ago — and are growing about 5% annually." However, "the bulk of Alliance’s products are spinoffs from the original rubber-band concept, including bands used for stretching exercises, holding together bunches of produce or flowers, organizing electrical cables or strapping down bundles of almost anything. Alliance’s Slip-On Grips are designed for helping people twist off bottle caps or hold tools more firmly."

Alliance also makes wristbands "infused with fragrances that it says relieve stress," and Eraselets, which are wristbands that double as erasers. The company keeps its new product pipeline pumping by offering $1,000 to employees who come up with marketable ideas. It also supplies bands to Wonder Loom, a maker of "colorful interwoven bracelets." "We’re the Starbucks of the industry," says Bonnie. "You don’t like that color? You don’t like that size? Give us about five minutes and we’ll come up with something that suits your purpose."

Bend It Like Fender

Fender EVP Richard McDonald on the power of music to transform lives, motivate, celebrate, inspire, heal … and build brands.

eye-oh-VEEN

Jimmy Iovine says the difference between Apple and other tech companies is that other companies are "culturally inept," reports Ben Sisario in The New York Times (5/29/14). "You go into any recording studio in the world and you see candles, lights and that Apple light from a Mac," says Jimmy, who along with Beats Electronics co-founder Andre "Dr. Dre" Young, will now try to help the Apple brand "see around corners" and find its way in the music business.

Having sold Beats to Apple for $3 billion, the two men will join the company "in senior positions," reporting to Apple content chief, Eddy Cue. While there’s no truth to the rumor that the merged company will be called Beatle, Jimmy was a long-time friend of the late Mr. Jobs and once fetched tea as John Lennon’s recording-session gopher. Jimmy and Dr. Dre are expected to bring not only music-industry acumen but also a certain star power that’s been missing from Apple since Steve Jobs died.

Venture capitalist David Pakman offers a mixed prognosis for the Apple-Beats deal, however: "Jimmy has time and again proven his ability to understand the tastes of the mass market, in an extraordinary way … But he hasn’t yet proven his ability to get a digital music service off the ground," he says. Pop star Gwen Stefani refers to Jimmy’s persistent style as "Jimmy Jail" — as he repeatedly sent her back to the studio to write "that career-changing track. "The good news is, he’s Jimmy," says Gwen. "The bad news is, he’s Jimmy."

Fender Bender

fender Paul Hewson and David Evans are going to help the Fender brand find its way in the digital age, reports Michael J. de la Merced in The New York Times (5/29/14). If that doesn’t quite have the ring of Jimmy Iovine and Dr. Dre joining Apple, it’s probably because relatively few people know that Paul is U2’s Bono and David is The Edge. Both men are slated to join Fender’s board to help build the Fender brand, design new products, and tighten connections with its customers.

"I believe that guitars are here to stay and, far from digital technology being their death knell, I think it throws up some new ways to power creativity and give people greater access to the huge potential of the electric guitar," The Edge says, adding: "It was the combination of time-honored traditions of guitar production with some very fresh ideas about what the company can do going into the future that hooked me."

Speculation is that Fender could also get into "headphones and other sound systems," as well as "digital education … The company already makes a guitar that can plug into a computer; a natural next step could be online guitar education." The U2 alliance does not mean The Edge will give up his "array of Gibson and Gretsch guitars and Vox amps," however he says,"I’m excited about what new instruments and hardware I can help create with Fender."

Zappos Insiders

Zappos is establishing a social network, Zappos Insiders, dedicated to recruiting and hiring new employees, reports Adam Auriemma in The Wall Street Journal (5/27/14). The goal "is to make the hiring process faster and easier by keeping a pool of willing and able candidates at the ready." Using software via Ascendify, Zappos’ "seven-person recruiting team" plans to sort candidates "based on skill sets or personal interests, shuffling them into ‘pipelines’ such as merchandising or engineering."

Rather than reviewing "cover letters and resumes" the Zappos recruiters "will spend time pursuing candidates in the Insiders group with digital Q&As or contests … to help gauge prospective hires’ cultural fit." The expectation is that this will also create "more time to spend on targeted outreach … such as following up on employee referrals." Michael Bailen, Zappos’s head of talent acquisition, says applicant privacy will be respected, that they "can engage with us in a very public way or private way if they’d like."

Some question whether applicants will "remain engaged … if months go by without job opportunities," but Michael "thinks those who identify with the company’s vision will stay connected for as long as it takes." Zappos currently employs 1,500 and last year fielded some "31,000 applicants," hiring 1.5%. It expects to hire "450 people this year." Zappos eliminated job titles recently and "also practices holacracy, a management system that rejects hierarchy and instead spreads authority … evenly across an organization."

Google Eyes

google chromeWhen it comes to privacy, it seems that you can hide but you cannot run. As reported by Claire Cain Miller in The New York Times (5/27/14), sensitive personal data has always been available; it’s just that "the Internet has … made it much, much easier to find." Before Google, anyone could dig up dirt by visiting a "newspaper’s morgue to flip through the physical archives," for example. Today, because search engines streamline that process, some are pushing to make such searches harder.

Mario Casteja, a Spanish lawyer, is at the center of that pushing having "spurred the European Union’s controversial ‘right to be forgotten‘ ruling this month." Mario "was livid that a Google search for his name brought up a newspaper article from more than a decade ago about his debts … The European court mandated a technological solution from Google. But some technology experts say what’s really needed is a cultural movement to create new standards of online etiquette and responsibility."

One problem is that while Google can erase links, it can’t do anything about information as originally published. It’s also likely that "a new cottage industry of search engines to scour hidden corners of the web would spring up in response." Avoiding social media doesn’t solve the problem either, because it "just means that when someone posts information" about an individual, that person won’t know about it. "We often conflate privacy through obscurity with inaccessibility, control or security," says Coye Cheshire of the University of California, whose proposed solution is "regular online information checkups, similar to credit checks."

Cast Irony

Cast-iron cookery is enjoying a moment, but its greatest asset is also its biggest liability, reports Zach St. George in Bloomberg Businessweek (5/19/14). The asset, of course is cast-iron’s durability. "The bitch of it is there’s no planned obsolescence," says Bob Kellermann, ceo of Lodge Manufacturing, a leading manufacturer of cast-iron skillets, dutch ovens and the like. "When people say, ‘I’ve got my grandmother’s pan,’ I say, ‘That’s not helping me a damn bit’."

Cast-iron’s staying power doesn’t actually seem to be hurting Lodge all that much, either. Ever since "Lodge won a Good Housekeeping ‘Good Buy’ award for its pre-seasoned skillet" in 2002, and "appeared on Food Network," its sales have grown with each passing year. The company currently turns out some "20,000 pieces a day," and with new equipment will soon increase production by 50 percent. Overall, US shipments of cast-iron cookware has "increased more than 225% since 2003," according to industry data.

Some of this growth comes from collectors like Greg Stahl, who "once owned about 2,000 pieces." But even he says he "loves his hundred-year-old waffle iron" best. Others attribute cast-iron’s renaissance to "a response to consumerist throwaway culture." Its rise is also thought to be connected to growing interest in Southern cuisine, as well as its affordability relative to stainless steel, copper and even cast-iron from China. What’s more, "most of the the raw materials" used to make cast-iron "are recycled."

Banker Glamour

prudentialPrudential is dressing up its retirement services in a red-carpet gown, reports Christina Binkley in The Wall Street Journal (5/15/14). Okay, the gown is not actually made of red carpet, but it was worn by actress Naomi Watts and “created by Marchesa in collaboration with Francesca Azzara, a retired new Jersey real-estate agent who at 61, is finally getting a shot at her dream of working as a fashion designer.” The big idea, courtesy of ad agency Droga5, is to use fashion’s allure among today’s younger consumers in hopes of selling them on retirement services later on.

“Fashion rose to the top because it’s hip,” says Prudential advertising chief Colin McConnell. “It’s part of pop culture, which is a hard place for a financial brand to get traction.” The message is that Prudential “can help retirees chase their dreams, and is banking on the novelty of the gown’s backstory to go viral on social media. It is also buying supporting radio and billboard ads.

Francesca, the story goes, “was discovered by a casting agent while dining with her husband at a Manhattan restaurant … She fit the bill for what Droga5 sought: a financially comfortable retiree who once had a dream of designing glamorous clothing.” She attended the “Fashion Institute of Technology and worked for 17 years designing children’s apparel before quitting to raise her son,” and later became a real-estate agent. Marchesa recruited Naomi Watts to wear the gown at the Cannes film festival.

Profits v. Growth

IBM’s Virginia ‘Ginni’ Rometty sees profits — not growth — as the priority, and investing in data analytics as its biggest profit center, reports Steve Lohr in The New York Times (5/12/14). "Profit trumps growth at IBM," says Ginni, adding: "We don’t want empty calories. So, when people keep pushing us for growth, that is not the No. 1 priority on my list." Revenue growth has proved elusive for IBM, largely because of the trend toward cloud computing — "in which processing and software is delivered remotely over the internet."

The trend toward cloud computing has depleted sales of IBM’s "hardware, software and services." IBM is also now pursuing its own cloud computing solution, SmartCloud, albeit a bit late to the game. However, "IBM’s largest single investment in growth is in helping companies exploit the digital data deluge from corporate databases, sensors, smartphones, the web, social networks and elsewhere" — otherwise known as big data. Indeed, "IBM has invested $24 billion in the data analytics business" since 2005.

As of 2013, IBM’s big-data initiatives have "generated nearly $16 billion in revenue." IBM’s plan is "to make more money helping its customers make sense of data, to cut costs, increase sales, innovate and personalize product offerings." Central to the strategy is Watson, a technology that stands "at the summit of the new field of data-driven artificial intelligence." IBM is investing "$1 billion to create a separate Watson business unit, and fund startups that want to build applications on the Watson technology."

Wally Olins

The late Wally Olins "turned @WolffOlins into the command center of a brand revolution," reports the Economist (4/26/14). Wally’s idea was "that not just bars of soap but organizations, people and places can have brands." This may not sound revolutionary now, but "in the early 1960s," the notion of thinking "more seriously about the collective identity" of an organization "changed the focus of advertising and the relationship between the admen and their clients."

Brand-building, as Wally saw it, isn’t just something you buy when launching a new product, but rather "an integral part" of a "long-term strategy … He urged companies to apply brand thinking to every corner of the corporate world, from the sort of people they recruited to the look of their delivery vans. Everything had to be ‘on brand’. He also applied brand thinking to an ever-wider range of institutions, from individuals to NOGOs to museums to cities to countries." Even the Beatles hired him, for Apple Corps.

Wally "insisted that he never applied his prescriptions to himself," although he did cut "a highly recognizable figure, with his round glasses, bow ties and multicolored socks." (image) He also "once argued that the French Revolution was a perfect example of rebranding," complete with a logo, slogan and jingle. Ultimately, perhaps his greatest insights were that "the most precious resource … is people’s attention" and that people sought meaning, not just utility, in what they buy. Wally Olins was 83.

Planet Walmart

walmart logo Walmart chairman Michael Duke wants to grow the retailer’s business, while reducing its carbon footprint, reports Gerard Baker in The Wall Street Journal (4/9/14). Michael says "there’s nowhere in our strategy that says we want to shrink the company … we do want to keep growing the company, but at the same time, per store, per square foot, per customer served, per associate, we want to improve the impact that we’re having on the world."

Those goals include "100% renewable energy" as well as "products that are sustainable for both individuals and the planet" and "a reduction of 20% of energy consumption, kilowatt-hours per square foot." In terms of producing "zero waste," Michael says that "80% of what used to go to the landfill no longer goes to the landfill. It goes to recyclable efforts and to produce good material from what some might call trash." He also says Walmart is working with "suppliers in China" to improve "energy efficiency" and "sustainability."

Meanwhile, Michael says Walmart last year launched "a big initiative on product made in the United States," so that more products are "made closer to the consumer." Michael says Walmart’s green goals are "really about customers" and "also about the people who work for the company. People want to work for a responsible company today … It’s about getting two million people that work for Walmart excited all over the world about sustainability … And along the way, we’ve saved hundreds of millions of dollars."