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06.23.2010

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Curious Retail Experiences

As many of you likely know firsthand, corporate travel is on the rise again.

And if you’ve found yourself returning to busy airports and lounges, you’ve no doubt noticed that these things we used to call magazines now resemble the special advertising inserts that were once used to allow magazines to look more like magazines.

So in the spirit of anticipating our readers’ unmet needs for both content and brevity while traveling in these most interesting of times, today’s Hartbeat will be fashioned as a collection of easily digestible snippets. Bursts of rich, analytic goodness that can be easily consumed after boarding but prior to take-off.

Starbucks (finally) goes to completely free WiFi

Maybe it sounds bratty to gloat and say we told you so, but we did. On March 19, 2008 to be precise. Our original advice is reprinted verbatim below:

Firstly, Wi-Fi should be complimentary, unrestricted and free from any corporate sponsorships or tie-ins. To treat Wi-Fi as anything other than a public good utility (e.g. water, air, electricity) is to tie one’s self needlessly to a dated, 20th century worldview. When we walk into a hotel or a restaurant, we know we can use the restroom and wash our hands without having to worry about whether the place has struck a deal with the same service provider of water that we utilize in our house. Why should Wi-Fi be any different? If Starbucks is serious about relating to local communities as a third place, there should be unrestricted internet access, end of story. No AT&T, No T-Mobile, No iTunes, just Wi-Fi. This is a no brainer. Hello?!?!?

But one significant point of difference remains, which suggests to us that they are still not thinking about what is in their customers best interest. Namely, they plan to create a “Starbucks online experience” that will offer access to otherwise paid content (i.e., The Wall Street Journal) as well as a host of other geocoded content from the likes of Zagat, Foursquare and Yelp—all designed to foster strategic partnerships that will lead to future content-delivery opportunities.

Once again, this is Wi-Fi. It is designed to let your customers use the internet, and it is increasingly viewed as a public utility. Rather than simply offering a complimentary service as a token of appreciation to your customers, why must you seek ever more complex ways of engaging your customer in experiences, services and “leveraging opportunities” they have not requested? Enough already. Just give them their WiFi and call it a day. Stop the marketing madness.

McDonald’s hot-coffee sales are down significantly

According to a recent article in Crain’s Chicago Business, sales of hot-coffee drinks are off more than 50% since their introduction. To wit: Sales of hot-coffee drinks fell from about 55 a day per restaurant when they were launched in May 2009 to about 25 a day per restaurant earlier this month. In contrast, McDonald's is already selling more than 80 frappes a day per restaurant after rolling out the slushy drinks this spring, according to company data obtained by Crain's.

"The McDonald's customer may not be a latte or cappuccino drinker," says Larry Miller, an analyst in Atlanta at RBC Capital Markets. "It makes sense that frappes would do better because they are basically coffee shakes, and McDonald's customers like shakes."

We also get credit for calling this one. As ardent fans of McDonald’s ourselves, it is just intuitively obvious that the McDonald’s experience is not conducive to the same sort of savoring social moments one finds in a Starbucks, or even a local coffee shop. McDonald’s does many things well. But first and foremost it is a large food preparation operation, with significant noise and many uncomplimentary aromas. No matter what kind of coffee beverage you offer to your customer inside a McDonald’s restaurant, they are not going to engage in the same kind of experience they would find in a coffee shop. To be clear, most McDonald’s customers likely do drink coffee drinks, they just prefer to do so elsewhere in a different setting and occasion.

Curious retail experiences

What follows are some of the more interesting retail experiences we have encountered—for better as well as for worse:

First Class Cross-Merchandising:
It is Cinco de Mayo. Make guacamole! Drink beer! Get drunk! Consume your Happy Planet Detox Shot on Seis de Mayo! Huzzah!

Poor loyalty discounting strategies:
Which wines are “on sale” with a loyalty club discount? They all are!!!! And, as any reasonable person knows, if everything is on sale, then nothing is really on sale. It becomes a fake gimmick just to get you in the door. A door you just might decide not to open again.

Experiential shelf set:
Wow! If I were smoking out of a hookah with a camel, I, too, would probably be scoping out a bag of Falafel Chips. Undoubtedly many would be concerned as to whether or not this kind of merchandising conveyed the wrong image for their retail brand. Which is pretty much why most the vast majority of retail brands fail to generate much in the way of brand love.

Obtrusive cross-merchandising:
Someday soon, an army of frozen waffles SKUs will revolt and attempt to regain their rightful place in the shopper's line of sight. For now, legions of toaster pastries sit suffocated by syrups and microwave egg kits. Remember, cross-merchandising does not equate to cluttered merchandising.

The Fresh Paradox:
All retailers seek to activate on fresh, yet many shy away from obvious wins due to misguided beliefs that their customers desire a uniform, pristine environment. In this case, the patina on the muffin pans sends a powerful message to the consumer that these muffins are “…made from scratch, as if they came from mom’s kitchen.” One wonders how many grocery retailers and/or managers would have the wherewithal to allow their fresh products to be displayed in tarnished, worn, dented pans, the likes of which we find in our own kitchens?

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