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What Restaurants Should Learn from Apple's iPhone Event

The day should have been a milestone. Instead it was a disaster.

Apple sold one million 3G iPhones over the weekend, but the blogosphere went nuts over the repeated inability to activate those phones. Steve Smith of the Mobile Insider had a decidedly negative experience with his daughter. 

To its credit, Apple did everything they could to minimize disappointment. When the 16Gb black models were dwindling, or hours later when the white models were almost out of stock, Apple employees did their best to keep people informed of what was happening.

Retailers should take note because they will soon be sharing Apple's pain.

In the retail business there's an old saying about the difference between driving sales and driving traffic. You can have an incredible event that fails to pay for itself, because the people that go to that event aren't there to buy, and they squeeze out the people that are there to buy.

Going forward, I think retailers will need to figure out how to level peaks and fill valleys.

They will need to find ways to mollify customers who show up -- and are disappointed -- when there is a ton of traffic. And they will need to find ways to boost traffic during non-peak hours.

Traffic peaks used to be so predictable. Black Friday. The day after Christmas. When a radio station announces gasoline for a buck a gallon.

Today is a different story. The local CVB or the hotel a mile away might be hosting a conference that fills the tables. Or, a single blogger with a timely message and a receptive audience can trigger a stampede.

When business spikes like that, it may seem like a godsend. But to your clientele, especially people who think of themselves as repeat customers, that one negative experience may be the one thing that causes them to never return. Going forward, retailers should learn from Apple's experience by:

• Keeping in contact with the local CVB and local hotels to see when large conferences are scheduled. You shouldn't indiscriminately add extra staff, but you should have some of your better off-duty people on hand in case traffic improves dramatically.
• Give your customers a Plan B. If you're completely full and people just drove a half hour to visit you, have a list of suggestions available -- and better yet, take a few minutes to make arrangements with the other restaurant to make sure you don't strand your customers. Sure, you hate to refer customers to competing places, but it's better than ignoring your customer's needs.
• Visit websites like Cornell's Center for Hospitality  Research -- look for articles on revenue management and use their free tools. For example, in just a few minutes you can calculate what level of staffing will provide the best service while maximizing your profit.

Inside Burger King's $190 Burger: It's All About Igniting the Senses

When the cost of gas causes people to rethink their travel priorities, it is up to local businesses to find new ways to tell great stories that compel people to visit.

You don't have to be an upscale New York hotel with a new spin on the TV dinner to play the game. You can be a local Burger King franchise with a $190 burger, as reported by AdAge (registration required).

Determined to show the world that it takes meat quality seriously, this Burger King sandwich is only available Thursdays at a single location. All proceeds go to a local children's charity. So what goes into a $190 burger?

"...(The sandwich is) made from Wagyu beef, topped with white truffles and Pata Negra ham (which owes its nutty flavor to the fact that the pigs are fed on acorns), the burger nestles in a bun spread with organic-white-wine-and-shallot-infused mayonnaise, plus pink Himalayan rock salt, and dusted on top with Iranian saffron. It is served with Cristal champagne onion straws and a garnish of lamb's lettuce."

By all accounts, the meat is good but all the other stuff is great -- the mayonnaise, truffles and Pata Negra are all something special. Customers were especially surprised to find that the saffron's aroma really did put their nose in synch with their taste buds.

Of course, the sandwich is only part of the experience. You have to call in to reserve your spot. Once you arrive, you are ushered through a red velvet rope and up some steps to a private upscale dining room. There is crisp table linen and free-flowing 2003 Tapanappa Cabernet Shiraz from the Whalebone Vineyard in South Australia. And at your table, you're presented with a free limited-edition bottle of Coca-Cola.  And, as Riedel connoisseurs know, the shape of the bottle does affect the taste of the beverage.

People want to go places where they can experience new things. Even though the venue is Burger King, every step of the experience is laden with information that the consumer can take home with them, whether it's trying Pata Negra ham or trying to recreate Cristal champagne onion straws at home (hint: try adding herbs de provance). Companies need to do less so-so stuff and really try to ignite the senses.

Just about any restaurant can re-create this same type of experience. By asking people to reserve a spot in advance, your risk goes down because you only order what you need, and only cook when they arrive. You can bring in locally grown produce (because as Whole Foods knows, everyone wants to know the story behind what they're eating), and instead of a Coke, give them a customized coffee table book that contains fascinating stories about the region and delicious recipes from the locals.

And as for Burger King? So far 30 of the burgers have been sold and there are plans to introduce the $190 burger in Spain and Germany, also for a limited period.

What's In Style? Brows, Strong Bangs ... and Advertising Leverage

Leave it to Kim-Van Dang of hot shop KVD-NYC to identify the hottest trends for 2008. A former beauty director at In Style and Good Housekeeping (who has done just about everything from giving fashion advice to Bill Clinton to going skinny-dipping in Cannes with Pamela Anderson), she looks at the factors that influence how people experience things. In addition to advice on what's hot for 2008, she weighs in on the latest trend in content, which isn't in Techcrunch or PaidContent but instead the latest issue of Harper's Bazaar.

The July issue of Bazaar devotes a whopping 40 editorial pages to four celebrities and models — Gwyneth Paltrow, Elizabeth Hurley, Carolyn Murphy and Hilary Rhoda — who also star in the advertising campaign for Sensuous, a new fragrance from Estée Lauder. It's significant because it significantly blurs the distinction between advertising and editorial. Magazines typically dedicate a page — or even just a blurb — of editorial space to a new perfume.

Dang predicted that other marketers will seek to mimic Bazaar's example, demanding similar editorial attention:

"...Advertisers have something to show now and say, ‘Why am I not getting this treatment?’ In the current economy, I think advertisers have more muscle."

Fact is, cosmetic companies generally treat their product introductions like movie premieres. They hire stars and models who can land magazine covers and other media attention, or sometimes go even further, like creating a joint venture with Sarah Jessica Parker to create the Lovely fragrance. While I don't see videogame placements anytime soon, product placement is going to continue to stretch conventional definitions. I stand by my 2004 prediction that we'll see product placements in places like Second Life.

Paid placement is something I've blogged about here, here and here. If I've got a restaurant and I want to be noticed by a local upscale hotel, senior Yelp reviewer or blogger, I need to pay or comp them.

Yet the public blogosphere likens this quid pro quo to a crime, as seen on my recent conversation on Mashable. For small to medium sized businesses, you cannot wait for the infrequent blog post or twitter about your company. You have a requirement to shape the conversation.

I think there's going to be a collision, soon, between the online purists and the businesses that sell in the real world. (And it wouldn't surprise me in the least to see Bonnie Fuller's hand in this.)

And as for Kim-Van Dang's thoughts? 

• Brows are the new eyelashes. Brow salons are popping everywhere, as are brow-growing and grooming products.
• Green is the new brown (replacing purple).
• Strong bangs are back. Witness model Kate Moss and designer Erin Featherston.
• It’s all about super-peptides, lasers and injectables in NYC and it’s all about eco-chic facials and elixirs in L.A.
• Do you love visiting spas? Now you can live at one. Luxury condos with built-in spa facilities and services are the next big thing.
• Oh, and lots of French stuff: French butters, French cheeses (Vacherin), French perfumes (Jicky, Shalimar, and Rose Barbare), and French teas (Mariage Freres).

(Hey NYC and Company! You need to recruit Kim-Van Dang into your Ask-A-Local program!)

Reliving the 70s: The Loews Regency Park Reinvents the TV Dinner

Talk about history repeating itself.

Classic TV shows like I Dream of Jeannie are popular on Hulu.com. My friend Sandy went from a straight cut to the Farrah Fawcett wave. Twitter is doing its best to repeat the rapid rise (and unfortunately, the rapid decline as well) of the CB radio craze. And now, the Loews Regency Park in New York City rejuvenates the TV dinner concept: introducing Park Avenue Fried Chicken (above), Wasabi Crusted North Atlantic Wild Salmon (right, top), and the Slow Braised Pot Roast (braised in Pinot Noir, below right).

Jeff Davis over at the wonderful foodie blog Foodfete (go ahead, check it out) appreciates what Chef Andrew Rubin is trying to do...and loves the warm, fuzzy feeling it gives him.

The trays are porcelain, not aluminum or plastic. The fried chicken is free range and the macaroni and cheese is cheddar asiago with a Parmesan crust.

While not designed for a low-fat diet, the good news is that this food may be good for you in other ways. Some research suggests eating certain foods can help reduce stress (and no, this research did not come from Mireille Guiliano, author of French Women Don't Get Fat).

As Sewell Chan blogs over at the NY Times Citydesk,

"...research out of Cornell University suggests that females tend to prefer snack-related comfort foods (candy and chocolate) while males prefer more meal-related comfort foods (pasta or casseroles). The researchers speculate that the gender differences may relate to upbringing. Men may have been conditioned to prefer hot or labor-intensive meals (conjuring up memories of their mothers taking care of them) while women seek convenient comfort foods (a form of self-indulgence)."

As scientists figure out how changes in brain chemistry make us happy, we also are witnessing people who take a more active interest in understanding how their food is produced. I think it's only going to be a matter of time (months, even) before these two trends collide: maybe not TV dinners from your local farmers' market, but certainly using comforting iconography (the old dairy box the milkman would use to deliver milk to your door, or the brown bag lunch) to market locally grown produce.

Louis Vuitton Revisited: What Web 2.0 Can Learn from Luxury Brands

Louis Vuitton Mallatier has been getting a lot of press for its efforts to build and protect its intellectual property. While many pooh-pooh Louis Vuitton's extensive litigation efforts as being misguided, the results are hard to argue with. Nadia Pleisner's inappropriate use of Vuitton IP has been shut down (the Facebook page has been disabled and she has published a statement on her web site) and even giant Google has been taken to task, again: The Paris District Court forbade Google and its French subsidiary from selling search ads against trademarks owned by Louis Vuitton.Google was also ordered to pay 200,000 euros, or $257,430, for unfair competition, misleading advertising and trademark counterfeiting, reports CNET.

So why should Web 2.0 companies care? The idea that Louis Vuitton is wrong is based on the premise that awareness (or eyeballs) continue to be more important than revenue.

That premise leads people to believe that Louis Vuitton should take the high ground whenever someone attempts to link their brand to a controversial issue. The argument is that if Louis Vuitton gets engaged in the issue - through sponsorship of workshops, through education, through advocacy - it will somehow advance their brand.

That same premise leads people to believe that every Google search for "Louis Vuitton" creates greater value for the brand and the company.

After spending years in this area -- I was a member of the IAB committee that established the standard terms and conditions for Internet advertising, and have worked and blogged extensively about Louis Vuitton -- I'm led to the conclusion that Louis Vuitton is doing a much better job at helping its retailer network make money than Google does.

As social networks and Web 2.0 apps alike try to court third parties, many like Microsoft program manager Dare Obasanjo and former Palm CTO Michael Mace are starting to make the argument that if your company has an API, you need to do a better job of showing developers how they're going to make money.

This is the difference between Yahoo and Microsoft right now: Yahoo is doing a bang up job of opening itself up, but its efforts at showing how Panama was going to make money for advertisers, or showing how third parties can make money off of Yahoo's search services in general, pale in comparison to Microsoft's ability to mint millionaires (through real revenues, not appreciation of stock) -- some 10,000 by the year 2000, according to a NY Times article.

Meantime, Google does help people make money through its advertising system, but the way it's currently designed, it does a much better job at creating visibility for Louis Vuitton knockoffs, who used to be confined to seedy places like Canal Street in New York but have found a terrific platform for visibility in Google.

At the same time, Louis Vuitton is building on other initiatives that one wouldn't expect from a house of couture. AdAge reports that on the 10th anniversary of launching its line of local city guides (which I covered earlier here), it contracted with Soundwalk, a company specializing in audio guides, to produce three tours of Chinese cities. This is a natural evolution of custom publishing, or brands using the Internet to become de facto media brands unto themselves.

According to a Louis Vuitton spokesman:

"[It] is a new concept in urban tourism, and we really want to offer a new way of traveling to our customers ... with China hosting the Olympic Games in 2008, it was natural for Louis Vuitton ... to open its Louis Vuitton Soundwalk series with a trilogy of Chinese cities."

Beginning June 16, the tours will be available as downloadable MP3 files (via louisvuittonsoundwalk.com). They will be sold exclusively online for $17 each, and are available in English, French, Cantonese, Japanese, Korean and Mandarin.

Retail Storytelling, Part I: What Every Bricks & Mortar Retailer Should Consider for their First Web Video

After thousands of conversations with traditional retailers about online media, I'm often asked why companies should blog.

My answer is that they should do it just to make sure their story gets told.

We've entered this Golden Age of storytelling -- thanks to blogs, podcasts and web video, everyone is a producer, and everyone is a critic. People are going online to find stories that help them make up their mind.

But here's an example that brings it a little closer to home. Every day, I walk my dog past a hot dog vendor. He's had good business, but he asked me how hard I thought it was to get people to walk just thirty feet.

As it turns out, pretty darn hard. There's a reason why grocery stores pack their aisles with messages and easy-to-reach displays.

So, he's changed his thinking recently. While he gets good loving from Yelp, he's learned that he gets lots of play by storytelling, and then spreading the story to local news outlets. (And what a headline: "Hot Dog! Biker Jim's Excellent Adventure!") His web site has been a great brochure, but he's started to look at web video.

Retail storytelling is the natural evolution of virtual tours. The more your customers know about your store and where things are, the easier their shopping experience is. The great thing about web video is that it puts the consumer in charge: it tells the whole story to an interested customer, and lets an uninterested customer cut the story short.

Here are some things for retailers to consider when putting together their first web video:

• What's the name of your store? You can't assume that just because someone has clicked on the video, they'll remember the name of your store. Reinforcing your store name makes it easier for your customers to Google you at a later time or recommend you to someone else.
• How long have you been in business? The longer you've been in business, the more likely you'll be there when the customer shows up. At least that's the assumption your customer makes. The biggest frustration of consumers today is when they Google a retailer online, only to drive to the location and find out that it's not there. History communicates trust and credibility. If they trust you they're more likely to visit you and hence, buy from you.
• How many locations do you have? Despite what people say about their preferences for mom and pop stores, the more locations you have the more trusted you are. If their first experience with you is in New York City they're more likely to tell their friends when you open a location in their neighborhood.
• What's your specialty? Understanding your theme or "elevator pitch" makes your store more memorable the next time your customer goes shopping. You may not have what all of your customers need all the time, but they need to remember your theme when they're looking for gifts for friends.
• What do you sell? Today's consumer is all about saving time. When you offer a menu of your products you save them time. You also allow them to consider your store for future needs. Describe your merchandise using broad keywords and major brand names. Take the time to use tools like Facebook Lexicon to determine what keywords are most in use (here we compare Prada vs Gucci, or Celtics vs Lakers), and use the most popular keywords.
• What's new? New sells! Send an email blast or text message pulse to give your best clientele a chance to see and buy your new merchandise before everyone else does. Create a web video that shows off the new stuff that just arrived.

Comfy Shoe? Or the Next Media Giant? Inside Crocs 'Cities By Foot'

Does advertising work?

Not when every consumer is overwhelmed by magazines and images that all pretty much look the same. So, to cut through the clutter, Crocs' director of marketing Ed Wuensch set out to engage their consumers by offering a service, not an ad. They just launched "Cities By Foot", which was designed and managed by Denver agency Red Robot. One of the most interesting things is that the site features some 70 videos of different destinations, all two to three minutes long, and all owned by Red Robot and licensed to Crocs.

(It kind of reminds me of how the first soap operas were paid for by Proctor and Gamble, Colgate-Palmolive and Unilever...but ended being the basis for powerful television empires that we know and love today. By the time they figured out the opportunity they had missed by not taking an equity stake -- well, it was too late.)

The Latest in Destination Marketing: Rethinking I (heart) NY

Given the general state of the economy, tourism groups across the nation are scrambling to promote their corner of the world. Take New York as an example: it was a pioneer with its NYC & Company effort  and DoITT, an aggressive 311 service that I blogged earlier. By organizing information about the city the way a mall would, the city was handling 43,000 questions a day.

So, it's useful for any destination not named Walt Disney to review New York's approach to tourism, which was unveiled earlier today.

First, following the trend to market cities as a collection of neighborhoods, New York is promoting the entire state as a vacation destination. They plan to use the powerful appeal of the city to woo visitors to other locales, using the phrase "The state with the heart of the city."

This is important given the trend away from two week vacations. The state vacation book that ran almost 200 pages is being replaced with a 40-page "Getaway Guide" which focuses on three- and four-day trips. The primary focus will be the 80 million people live within a three- to five-hour drive of New York State.

Video brochures will join search as a key component of their online strategy, as well as a user-generated content contest sponsored by the IFC television network which will ask consumers to create “I love New York” commercials. This echoes the findings of a recent PhoCusWright travel study, which indicated that people found rich media - particularly photos, maps and video - to be more influential than reviews.

Inside Lucky Magazine's LiveToBuy

Readers of Lucky Magazine will be able to pay for goods mentioned in that publication by text messaging, thanks to a new program co-developed by Conde Nast, PayPal and NY interactive shop Anomaly.

Sephora VP of Retail Marketing Allison Slater -- clearly not afraid of new marketing approaches -- joins Avon, Liz Claiborne, Estee Lauder, L'Oreal, Perry Ellis, Target and Unilever's Sunsilk haircare line in LiveBuyIt. This story, which broke in the July 10 NYTimes, mentions that the companies that participate are among those the companies that are buying a full-page color ad - currently $165,000 for the 1x rate.

Unlike Conde Nast's earlier ShopVogue.com initiative -- which I estimated brought in $1 million in additional ad revenues -- this new initiative takes two major risks: will people (1) buy using their mobile phones, and (2) will they do it via PayPal?

Earlier research shows that the average shopper conducts 13 searches before making a purchase. If this trial shows that a single mobile search eliminates the need for 12 more comparison searches over the web, this could be a major development for marketers.

Text2Buy, which was developed by Anomaly with PayPal, represents a much more sophisticated approach than previous interactive media added-value programs. LiveBuyIt is a much more focused approach than the Hearst Co's $10 million 30 Days of Shopping campaign, which is reportedly combining blogs, podcasts, text messaging and other interactive marketing vehicles to capture information on what people are buying. Lucky Magazine publisher Alexandra W. Golinkin hopes to launch a "Text To Try" program where shoppers purchase samples of advertised goods using micropayments.

Anomaly reportedly receives a percentage of sales from purchases made through Text2Buy (see previous coverage including processing fee breakdown). 

PayPal has to move fast. Incremental promotions with marketers like Burger King may be useful at selling penny-ante merchandise but do little to change the rules of the game. The advent of Google Checkout - illustrating eBay's increasingly limited growth upside, relative to more traditional businesses - may have already played a role in precipitating the resignation of eBay COO Brian Swette.

Link: MediaPost interview with Anomaly Chief Strategy Officer Mark Kaplan on the future convergence of mobile and mass marketing.

The New Payola: Online Hotel Reviews

The hotel industry should be concerned about the number of hotels that are trying to pay online sites for positive reviews. Today's New York Times reports (subscription required) on the incentives hotels are currently providing to people that post "real" reviews on sites like Citysearch.com. For example, one NYC resort is "discreetly offering a free reflexology treatment to customers who posted a positive review of the establishment online."

Hotels run the risk of repeating the same mistake that the radio industry did. Let's look at the definition of payola, according to Wikipedia:

"...In the music industry, the illegal practice of record companies paying money for the broadcast of records on music radio is called payola, if the song is presented as being part of the normal day's broadcast."

Are people being paid - either in cash or for consideration for their "reviews"? The Times article is clear that the answer is "Yes". In response, the hotel industry rightly points out that the vast majority of comments on review sites are negative, which reflects basic psychology: you're more motivated to warn people about a bad experience than to share a good one.

But if readers were to ever believe they were being lied to -- there might be a backlash against both the sites and the hotels that paid for the reviews.

I think hotels should continue to encourage travelers to submit reviews, but should drop the requirement that the review be positive. Furthermore, if there are incentives involved in giving positive reviews, I think the online sites need to do a better job of informing their readers of potential biases.

Consumer Reports (subscription required) recently described the simply awful advice being given out by these so-called experts. Let's hope that the next expose isn't about outright dishonesty.