How one company brought savings into the digital age
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I’m a huge fan of RTR, with both a PRO and Unlimited membership. Up until now, I hadn’t really put much thought into the logistics behind the business, but just relied on them to have clothes to me when I needed them, looking like new. I liked how you applied not only theory we’ve learned in TOM, but also in FRC. The goal around spotting is really well aligned to what they’re trying to accomplish.
I’m really curious how all of this will translate to their Unlimited model, which the company launched in March 2016 [1]. Under this service, members get three items (accessories, clothing, cocktail dresses, etc.) at any time. Members can keep these as long as they wish, which could represent a logistical nightmare, especially as others wait for a specific clothing item. Also, branching out of dresses means that RTR will need to carry more inventory and become even better at trend spotting across a wider variety of clothing items. So far, it has worked out for me, but in order to justify the expense, RTR will need to ensure even fast turnaround times (on the consumer end) than mentioned above. For example, I would be incredibly unhappy if RTR took a week to change out clothes and send me new ones, leaving me paying for a service on a monthly basis, but only getting two or three weeks of use from it. This could be a barrier to expansion in the future, unless they decentralize their warehouses, which has other implications.
Either way, I’m excited for the future of RTR and so thankful it exists.
[1] http://fortune.com/2016/03/23/rent-the-runway-unlimited/
I’ve always been intrigued by blockchain and its ability to really transform the financial system. It seems like a really great opportunity to not only cut costs, but also to create better operational management. There also seem to be opportunities to use blockchain outside of the financial industry, such as government management.
However, I wonder why blockchain technology hasn’t really taken off, especially given the major cost savings for banks, who would likely have the capital to invest in building systems. Blockchain was first thought of in 2008 [1]. Even being generous by giving this technology a couple of years to take off, I’m surprised that every bank isn’t currently employing it today. I’d be interested, @Quinn, as to what you think is the cause of this, given your expertise with the industry.
Great topic! It is really interesting to see how an ages-old institution has transformed with the times. I wonder though, how the congregation is transforming. Yes, overall, we are becoming a more tech-savvy population, but, in the case of religion, I wonder if people are stuck in their ways. For example, you talk about moving tithes online. In a way, this is great for the Church, because people have been shown to spend more when they’re not using cash [1]. However, at least in the churches I’ve attended, donating is a very public affair. Given that this form of giving is still in transition, I think that people may be hesitant to move to digital (a more private form of giving) for fear of judgment (and not the kind by God). It is something the Church should keep in mind when they invest in a digital infrastructure.
[1] https://www.nerdwallet.com/blog/credit-cards/credit-cards-make-you-spend-more/
First, I loved that you used Future Girl. I think this is one of the best examples of communicating a long-term vision for a company. You can really tell what they’re going for here. It actually got me THIS close to taking a job at the Connected Fitness HQ in Austin, despite the whole Harvard thing.
I’ve been a big fan of UA’s move into digital. They are definitely leading the industry, and I think a lot of this has to do with their flexibility. You mentioned the partnership between Nike and Apple and how hard it is to break. What UA has done well is not insisted upon everything being on their platforms. While they have introduced HealthBox, they’ve realized that some people may have been using other scales, trackers, etc. Instead of forcing them to switch hardware in order to access UA’s software, they’ve made things more accommodating. I can’t speak for Nike at this time, but when I first downloaded their running app a few years ago, I immediately deleted it and moved to Map My Run after they wouldn’t let me pair it with my Jawbone tracker. By being open to competition, UA has been able to win over users.
I also hadn’t thought about how UA can use this data to improve its products, so thanks for calling that out. It is a great use of feedback loops and good means of really getting know understand user problems.
I completely agree with the idea of Tesco using technology to enhance the customer’s experience in the store. I also think that Tesco’s biggest advantage is the vast trove of data it is now collecting on shoppers through its mobile app and loyalty program. There are benefits to both the brand and consumer of Tesco having this data.
On the consumer side, Tesco can use this to enhance the customer experience, as you mentioned above. For example, since Tesco knows what a shopper has purchased, and how frequently, on average, either that shopper or similar shoppers replace a specific item, Tesco could use this to remind shoppers to buy something that they may be running low on. They can also use this to delight shoppers by suggest recipes using things they’ve purchased or offering savings on things they might want to try. They will need to handle this carefully as to not venture into “creepy” territory.
On the brand side, Tesco can unite the data from the POS and mobile device to understand which products a shopper was considering, but did not ultimately purchase. This information is extremely valuable to brands and can help them target shoppers in a way that maximizes their spend.
To Jessie’s point above, I’ve always been amazed by how much packaging comes along with my little tube of cleanser, lipstick, etc. I’ve also experienced the unwrapping of multiple layers of cardboard to get to my GlamGlow mask and it has done nothing but frustrate me. It’s great to see that L’oreal is taking steps to remedy this in the industry. Hopefully smaller up-and-coming beauty brands will follow such a giant industry player.
On the other hand, I hadn’t really thought much about how they’re impacting the environment in a more broader sense. I would love to see them do two different things:
1) Look into a packaging recycling program. So many makeup containers could be refilled. If you think about how most L’oreal consumers buy makeup at drugstores, this may not be as difficult to implement as it would be in other industries.
2) Instead of simply subsidizing farmers, I would like to see L’oreal use this money to educate them on better farming practices. This could have widespread impacts on the use of water and land, outside of just L’oreal’s raw materials.Thanks for a great post, Yarden!
Ryan, I loved this post! I hadn’t really put much thought into how climate change would impact Mars, other than raw material supply. I really appreciated your chart showing how they were impacted all the way down the line.
Overall, I really like what Mars is doing with the farmers. I’ve seen this with a few other companies and really appreciate how they’re not only making the planet a greener place, but also educating farmers on sustainable practices in an almost altruistic sense. I’m also glad to hear that they’re no longer doing as much deforestation to harvest their palm oil – I think rainforest deforestation was a trendy topic to talk about in the 90s and early 2000s, but hasn’t really been addressed recently. It’s good to see that it hasn’t actually fallen off the map where it matters.
I also like your suggestions as to what Mars can do to further improve. The only thing I worry about is how product adaptation will go over with consumers. As long as they maintain flavor, I think it will be okay, but I worry that the chocolate will become less flavorful, causing them to lose market share.
I’ll admit, I don’t know much about metals and mining besides how water-intensive they are. This post helped me deepen that understanding. It’s incredible that Amplats was able to decrease their water usage by almost 16% in the first year of their efforts. This makes me wonder how much low-hanging fruit there is for other competitors / industries in the region. Given that regulation can be slow to develop in growing economies, Amplats’ leadership could be a good way of encouraging this to happen organically.
I also wonder what the broader impact of Amplats’ infrastructure investments will be. They really are being a pioneer right now, and this could have even broader (positive) ramifications than initially believed.
I can see both sides of the conversation that Jenna and Jessie are putting forward. I’ve only recently begun to think about how shopping at places like IKEA and H&M are impacting the environment, and it is becoming clear that the impact is large.
I think recycling is H&M’s best bet for continued sustainability, but as Jessie mentioned, it is going to be very difficult to follow through on, especially given the quality of the clothing. There really isn’t an easy way to reuse this type of clothing – you can’t donate it to a second hand store (due to tears, etc. caused by the low quality) and you can’t resell it (due to the trend-based setup of the clothing line). Enforcing a recycling culture is likely out of line with the behavior and expectation of the H&M consumer. The exact opposite is true for Patagonia, which is likely why they have seen so much success. Their marketing message, product, and sustainability views are all aligned in this instance.
Phoebe, I really appreciate the article on the thing that helps me actually converse during discussion group at 8am. Like the posters above me, I can’t imagine a world where everyone is in permanent caffeine withdrawal.
I really love Starbuck’s approach to this problem. Similar to Chipotle, which I posted about, they are going direct to the source to educate their farmers on how to be more sustainable. Not only does this help Starbucks ensure their supply chain, it also helps develop small farmers who might be struggling in up-and-coming economies. Being the CSR-lover that I am, I feel like this could be a good marketing message as well.
I think if Starbucks is able to maintain their signature taste that their customers love (i.e. slightly burnt, but that’s just my opinion), they’ll be able to be successful by pursuing a GMO strategy.