Hundreds of shopping centers across the U.S. are facing obsolescence, abandoned by shoppers who are going online or getting choosier about where they shop. ... in its combination of novelty, technology, and customer pampering, Roosevelt Field embodies the strategy that has helped its owner, Simon Property Group, navigate retail’s crisis to stay on top of the mall world. ... Its U.S. portfolio includes 108 malls, most of them high-grossers like Roosevelt Field, and 72 discount outlet centers. ... including the Forum Shops at Caesars Palace in Las Vegas, King of Prussia outside Philadelphia, and the huge high-end New York outlet mall Woodbury Common ... The key to that success: constantly adapting to figure out what sells, at a time when many of the businesses that fill its malls—especially department stores and apparel retailers—aren’t selling. ... Simon dominates the so-called A-malls, those with the highest sales per square foot. To win in that category, Simon has been diligent about staying ahead of trends and modernizing its centers, and quick to replace struggling brands with those on the upswing. ... acknowledge the risk posed by the wave of store closings. ... Analysts generally believe America is “overmalled” to begin with: There are 2,353 square feet of space of shopping centers in the U.S. for every 100 Americans, compared with 1,636 in Canada and 458 in Britain ... From the 1960s through the 2000s, developers built hundreds of malls per decade. But since 2010, only nine new ones have been built ... the typical anchor store pays around $4 per square foot in annual rent; the average non-anchor tenant paid $42.22 per square foot a year as of the third quarter of 2016
Because: after Howell dropped out of Yale in 1967 (“the whole world was exploding at that point”) and met his future wife, Laurie, and moved to Berkeley and visited the first Peet’s Coffee, changing his conception of coffee shops forever; and after he then tasted a cup of lighter-roasted coffee made by the Bay Area Capricorn Coffees, which changed his conception of coffee further still; but before he moved to Boston and started his café company, the Coffee Connection, where he invented the Frappuccino and pushed light roasts and sourced single-origin beans when the whole world was drinking anonymous dark-roasted muck; and before he sold the whole kit and caboodle to Starbucks for $23 million in SBUX stock in ’94; and before ... He was, at the time, mostly preoccupied with the beauty and power of the psychedelic yarn paintings that the Huichol made as a part of their shamanic religious practices in those remote Mexican mountains. ... mostly they talk about his pragmatically mystical conviction that a higher truth of coffee exists, and that we can figure out how to get to it. ... These are boom times for fancy coffee. You can buy locally roasted bags of expensive Ethiopian varietals in small American towns, and every major city with a recently gentrified neighborhood is now home to at least one coffee bar serving pour-over made with single-origin beans and a small roaster setting up shop in a industrial brown zone near a canal.
Cosmetics companies have been fighting counterfeiters for as long as they’ve been in business, but the scope of their efforts isn’t widely known. The Estée Lauder Cos., the $30 billion company that owns MAC, Clinique, and other brands, has waged an especially aggressive campaign. Since 2003 its global security team has been led by the former head of the U.S. Drug Enforcement Administration’s New York office, and it employs 42 full-time agents around the world. They infiltrate flea markets, make test purchases on EBay, and gather evidence for civil suits against counterfeiters. Increasingly, they’re coordinating with local and national governments. That includes pointing Chinese police to the country’s dingy fake-makeup factories and advising U.S. prosecutors on criminal investigations here ... Global seizures of counterfeit perfume and cosmetics jumped 25 percent from 2011 to 2013, according to a recent report by the Organization for Economic Cooperation and Development, making them a growing sector of the $461 billion annual trade in pirated and counterfeit goods. ... becoming a dealer in the U.S. no longer requires having shady contacts in Asia or smuggling suitcases through airports: Anyone with a few thousand dollars can buy contraband wholesale online and resell items individually on EBay and Amazon.com, or through more traditional channels such as flea markets, beauty salons, and mall kiosks.
Smoking rates were in decline among well-educated consumers in developed economies; to make up for slipping sales, the companies were raising prices, which they could do for only so long. Meanwhile, a growing number of customers were switching to e-cigarettes in the hope of escaping their addiction or preserving their health. The devices, which use battery-powered coils to vaporize nicotine-infused solutions, had leapt on the scene seemingly out of nowhere. One of the first commercially available e-cigarettes had been created circa 2003 as a smoking cessation device by a Chinese pharmacist whose father had died of lung cancer. By 2013 the e-cigarette market had $3.7 billion in annual sales, according to Euromonitor International, and was expanding rapidly. ... Philip Morris International scrambled to fashion newfangled nicotine-delivering devices that would catch the wandering eye of the restless tobacco consumer. ... Everywhere you look in the industry, companies are pouring money into product development while borrowing liberally from the style of Silicon Valley. ... Tobacco executives often sound like media owners talking about content. That is, they’re open to delivering their drug via whatever pipe the consumer chooses—be it e-cigarettes, heat-not-burn devices, gum, lozenges, dip, or some medium that hasn’t been invented yet.
Nothing about Smith or the simple design of the sneaker itself — neither has changed much since 1971 — explains how Adidas was able to sell 7 million pairs by 1985. Or how that number had grown to 22 million pairs by 1988. Or why Footwear News named it the first-ever Shoe of the Year in 2014. Or how it surpassed 50 million shoes sold as of 2016. Or how the sneaker grew far beyond its start as a technical athletic shoe and became a fashion brand, its basic blank slate evolving and taking on new meaning and purpose. ... The sneakers weren’t even designed with Smith in mind. Adidas heir Horst Dassler made them in 1965 for the French tennis player Robert Haillet. ... It was the most technically advanced tennis sneaker of its time, one of the first made of leather in a field of canvas, with a herringbone bottom designed for use on clay courts.
Domino’s Pizza Inc. has decided that modern works better than authentic, and fun is best of all. For the past five years, the company has been emphasizing all the ways you can order pizza with minimal human and maximal digital contact. ... Since the end of 2008, when Domino’s was threatened by declining sales and distressed franchisees, its share price has increased 60-fold. The company is now worth $9 billion. The second-biggest U.S. chain has also been stealing customers from rivals, notably from the biggest, Pizza Hut Inc. Domino’s went from having a 9 percent share of the pizza restaurant market in 2009 to 15 percent in 2016 ... Given how the company’s technological prowess and financial fortunes have improved in step, you could be fooled into believing the former is entirely responsible for the latter. But the truth is, most customers don’t use a voice-activated app or emojis to order pizza, and most pizza is still delivered by humans in cars or on scooters or bikes. And although Domino’s offers 27 toppings and sauces, most people still order just pepperoni. As much as tech, what buoyed Domino’s was a once-in-an-industry strategy: In 2009 it admitted that its foundational product was … bad.
The boy whose teen and young-adult years were ripped from him by the murderous Nazi rampage through Europe would show millions of children and adults how to play, how to squeeze more fun out of their lives. ... Orenstein now speaks English with a borscht-thick European accent that’s just one notch above a whisper. He is still alive, still gambling and still winning most of his bets. Glancing out the window of his New York City pied-à-terre, which offers sweeping views of Central Park, he leans forward and rests his elbows on the large poker table in front of him. ... The story of how Henry Orenstein went from a small town in Poland, through five concentration camps, all the way to his 24th-floor apartment on one of Manhattan’s most expensive strips of real estate is the stuff of fiction, and science fiction. He bluffed and cajoled to survive the Holocaust, and just a few years later, armed with unrelenting drive and rare creativity, he tinkered and hustled his way to the top of America’s toy industry, helping to put dolls, race cars and one of the most successful action figures in history into the hands of generations of children. Then he transformed poker from a game played in dimly lit rooms to a billion-dollar business.
The company’s e-commerce platform was involved in purchases by more than 100 million individual shoppers in 2016, yet it is invisible by design, enabling the end-to-end operation of its customers, some 400,000 individual retail shops and brands. It proudly operates not from San Francisco or SoHo but from six floors of an inconspicuous office tower in Ottawa ... the company has quietly but aggressively encroached on territory occupied by retail giants like Amazon and eBay to carve out a lucrative niche in e-commerce. ... Lütke’s goal is a lofty one: to make commerce easier for everybody. Just as WordPress made it easy for anyone to set up a blog or content website, Shopify lets anyone set up and run a digital store immediately, without needing any technical prowess.
They think Amazon is going to grow faster, longer and bigger than almost any firm in history ... only ten firms with sales of more than $50bn have managed to grow by an average of 15% or more for ten years straight since 1950; no company with sales of more than $100bn has done so. If Amazon were to pull it off, it would be the most aggressive expansion of a giant company in the history of modern business. ... That raises two questions. The first is how Amazon could possibly achieve this. The second is which industries it might upend in the process. ... Mr Bezos claims, as a corollary to thinking only of customers, never to think of rivals. However, the list of current and possible competitors that Amazon is required to include in its annual filings is long and getting longer. It ranges from retailers and search engines to film producers and, as of last year, logistics and advertising firms. ... the best defence is simple: sell something that customers want and Amazon does not have. Exceptional merchandise and service helps.
They were assigned perhaps the most urgent rescue mission in business today: Repurpose Wal-Mart’s historically underachieving internet operation to compete in the age of Amazon. ... Lore cuts an unusual figure at the Bentonville headquarters, which he now visits once a month on a private company plane, and in the geeky hallways of San Bruno and Sunnyvale, Calif., where most of Walmart.com’s engineers work. He’s a former bank risk manager and longtime New Jersey resident who’s a fan of Bruce Springsteen and of figuring out ways to simplify the routines of daily life. He recently ditched his Tesla and uses only Uber, for example, and he visits the same sushi restaurant near his office four times a week, always ordering the salmon sashimi. He also spends time on customer-pleasing contrivances that, in the parlance of Silicon Valley, do not scale. He recently devoted a 12-hour day to recording a thousand variations of a video greeting for new Jet customers. Now when customers sign up, Lore welcomes them by their first name. ... He’d like to extend Jet’s sensibility and business model to Walmart.com, the second-biggest e-commerce destination in the U.S., according to ComScore Inc. ... Wal-Mart has a lot riding on Lore. Last year he received $244 million in pay, 10 times that of his boss, Doug McMillon, Wal-Mart’s CEO. His project could determine the future of Sam Walton’s legacy and the eventual success of McMillon.
- Also: Barron's - The Amazoning of American Retail 5-15min
- Also: Bloomberg - Why the Retail Crisis Could Be Coming to American Groceries < 5min
- Also: Bloomberg - The Long, Hard, Unprecedented Fall of Sears < 5min
- Also: Bloomberg - Mall Owners Fighting Online Stores Turn to Concerts, Food Trucks < 5min
While some supermarkets are better than others, it's probably not unusual to find a few stray shopping carts littering the parking lot to the dismay of shoppers who may think that a parking spot is open, only to find that it's actually being used by a shopping cart. It seems like a basic courtesy to others: you get a cart at the supermarket, you use it to get your groceries and bring them to your vehicle, and then you return it for others to use. And yet, it's not uncommon for many people to ignore the cart receptacle entirely and leave their carts next to their cars or parked haphazardly on medians. During peak hours, it can mean bedlam. Where does this disregard come from? ... The data above suggests that as a situation broaches on deviance, more people will trend toward disorder; once we have permission to pursue an alternative action, we will do so if it suits us.
Pick any other major city or metropolitan area in the U.S., and the situation’s probably the same: a massive surge in deliveries to residential dwellings, one that’s outstripping deliveries to commercial establishments and creating a traffic nightmare. ... It’s estimated that, on average, every person in the U.S. generates demand for roughly 60 tons of freight each year, according to the National Capital Region Transportation Planning Board. In 2010, the United States Post Office—which has overtaken both FedEx and UPS as the largest parcel-delivery service in the country—delivered 3.1 billion packages nationwide; last year, the USPS delivered more than 5.1 billion packages. The growth in e-commerce is fueling a commensurate rise in the number of delivery vehicles—box trucks, smaller vans, and cars alike—on city streets. ... While truck traffic currently represents about 7 percent of urban traffic in American cities, it bears a disproportionate congestion cost of $28 billion, or about 17 percent of the total U.S. congestion costs, in wasted hours and gas.
Shopping involves scrolling through an intoxicating admixture of goods: Commodity necessities appear next to fast fashion and knockoff apparel; extraordinarily cheap but on-trend electronics mingle with what I can only describe as global manufacturing overspill. ... These shipments were made in accordance with a bilateral trade agreement between the United States and China that originated in 2010, meant to address the rising tide of cross-border e-commerce. Items up to 4.4 pounds — more than the weight of, for example, a violin and bow — can be shipped as ePackets, at extremely low rates with tracking numbers and delivery confirmation. ... This obscure trade deal has become the quiet conduit for an explosion in a new and underexamined American consumer behavior: buying things directly from their countries of manufacture. ... Because of ePacket, and the decades-old international postal agreements that serve as its foundation, lightweight product shipments from China are heavily subsidized by the U.S.P.S. ... Wish certainly illuminates the peculiarities of international shipping, but it casts a much brighter light on the state of globalized manufacturing and commerce. In fact, it offers a somewhat convincing vision of what they might become in the near future. ... Wish wastes no such effort on concealing its international character. Its product selection feels like a churning, infinite cascade; its lack of any sort of organizing principle is part of the reason it’s so hard to stop scrolling.
The market for portable battery packs generated $360 million in the 12 months ending in March 2017 in the US alone. The brands behind these packs are largely anonymous — Kmashi, Jackery, and iMuto — and they often stay that way. ... Except Anker. The steady rise of the company’s profile is proof that it’s possible to meet one very specific consumer need and ride that wave as it continues to ripple out to other markets. A majority of Anker’s sales come from cables and wall chargers, and it’s now moving into the smart home and auto market — anywhere a plug and a cable can solve a problem. ... Yang and his team started a company with the sole purpose of selling a better third-party accessory. But they stumbled onto a more lucrative reality: mobile phones, once niche luxury items, are now ubiquitous centerpieces of our digital lives. Each of these phones, and all the products that connect to them, need their own cable and plug. And each and every day these devices die before we want them to. ... In many ways, Anker’s success is born from the failures of premier manufacturers like Apple and Samsung. Where those companies introduce points of friction — like ever-thinner devices with short battery lives — Anker offers a remedy. ... Anker takes a more straightforward approach by solving the inevitable problems technology creates.
Handing over control of a company is always tricky—Schultz, 63, officially relinquished the CEO job on April 3—and doubly so when it involves a charismatic, longtime leader who all but founded the company. ... In Schultz’s case, how does a notorious perfectionist who craves total control apply his perfectionism to the act of ceding control? That challenge is all the more fraught because his most notorious professional failure by far was his last attempt to leave as CEO, in 2000, a slow-boiling disaster that eventually concluded with his triumphant return. ... Beyond covering the planet with coffee bars, Starbucks has two main growth initiatives, which Johnson calls the “most critical things for the future of the company.” Johnson will be in charge of one of them: the continuing development of Starbucks’ digital and mobile operations. ... second key area will fall to Schultz. As executive chairman, he’s leading Starbucks’ push to develop a higher-end brand and “experiential destinations” to entice people who have abandoned malls to stop by a store. That strategy involves a three-pronged attack consisting of (1) the Roastery, a handful of massive, ultraluxurious coffee palaces inspired in part by Charlie and the Chocolate Factory; (2) a new brand of rare and single-origin coffee beans called Reserve; and (3) a second line of boutiques—a notch above a regular Starbucks but not quite as over the top as the Roastery—also called Reserve.