Coming To Luxury Hotels (Only) – Human Service

The human touch and personalized service have long been a luxury at department stores, airlines, restaurants and any number of other avenues where consumers pay for a thing or an experience. 

The hospitality industry has been an exception though. 

But, writes Matthew Kronsberg in the WSJ, that may be changing:

Consider this:

At the Aloft hotel in Cupertino, Calif., guests who request a toothbrush or razor from the front desk will find Botlr, a short, poker-faced servant-on-wheels, delivering it to their door. Neither Botlr nor Connie care if you stiff them on a tip.

or this:

When Daniel Politeski, an engineer from Vancouver, Canada, approached the check-in desk at the Henn-na Hotel, near Nagasaki, Japan, two staffers were waiting to serve him: Should he approach the young woman in a cream business suit or her colleague, who bore a close resemblance to a Tyrannosaurus Rex?

He went with the T-Rex, not just because interacting with a dinosaur seemed novel, or because he liked its bow tie, but because it was the one that spoke English. The young woman took no offense at being bypassed; she, like her reptilian co-worker, was a robot.

So if the staff is robotic, but is efficient and gets the job done, will guests care?

At low-to-mid-market hotels that cater to varying degrees of price-sensitive clients, I don’t think they would or should, since what they’re after is generally a somewhat clean hotel with a bunch of amenities that just work.

Not so, at the other end of the spectrum

Maria Razumich-Zec, regional vice president and general manager of the Peninsula Chicago, among the most technologically innovative hotels in the U.S., thinks it’s unlikely that automated desk agents and concierges will become as ubiquitous in hotels as TVs, especially not in luxury hotels. “Technology is part of Peninsula’s DNA,” said Ms. Razumich-Zec, “but it doesn’t take the place of human interaction. We believe there’s no substitute for the personal touch.”

So in the next 2 decades, with AI becoming ever-more powerful, robots becoming ever-more versatile and interactive bots becoming a fixture in our everyday lives, its easy to see why just the rich will expect and want the human touch – and pay a premium for it. 

 

Focus and Snapchat

If the lifeblood of a startup is focus, the lack of discipline is its bane.

And that’s true whether your startup is worth $1 – or $16B, as is the case with Snapchat.

Which is why, what Evan Spiegel, its CEO, said the other day at an event at Columbia university caught my attention

…Spiegel says that the camera itself remains Snapchat’s unifying feature.

Snapchat opens to the camera, Spiegel said. Chat is available to the left of the camera, and Stories is available to the right of the camera. That not only differentiates it from other social media products, but allows Snapchat to straddle the line between the defining features of several of them.

“The beautiful thing is it sort of sits in the middle, but more importantly it opens to the camera,” Spiegel said. “The thing that feeds a social network is content… Similarly with communication… So in our view, when you take a snap and you choose this path between talking to your friends or adding it to your Story we end up with this harmony where both of these businesses feed themselves. I don’t think it’s one or the other.”

Just amazing to hear a $16B startup’s CEO have that kind of clarity and implied executing discipline.

Why All Is Not Well At Flipkart – And How To Save It

FlipKart, India’s homegrown eCommerce success story (/work in progress?) was valued at $15B last year.

Recently though it was in the news for the wrong reasons, after a trio of small funds cut their private valuations for it by up to 23% – blaming, primarily, the fact that it was spending a lot more than it was making, in its quest for marketshare, with no end in sight to its profitless days.

Amazon of course famously did that for a long time, but not having profits is not the same as not having enough operating/free cash flow, so that’s a different story.

Coming back to FlipKart, I recently read a longish post on what ails FlipKart by Haresh Chawla, a partner at an Indian PE firm, that contains many illuminating observations and advice, about FlipKart, unit economics and about startups in India.

One of the stranger things from the post is about FlipKart driving saves revenue (or GMV = Gross Merchandising Volume) by becoming the number one destination for smartphones – to the exclusion of everything else:

So Flipkart sells smartphones by funding such deep discounts that even neighbourhood mobile shops buy from them as against sourcing them directly from the manufacturer. For example, Flipkart funds a 20% discount beyond the wholesale price in the case of Micromax. Now, if you have a valuation round coming up, sign up a few exclusive smartphone deals, pump in discounts and sell a few million smartphones. And you can claim that you will hit $10 billion faster than anyone else. Incidentally, Flipkart fell short of that number by just $5 billion, as Mint reported in this roundup of missed targets by e-commerce firms.

Given the number of marquee global VCs backing FlipKart, it’s weird that no one thought to question tactics like this one that guarantee a loss on each sale without the upside of loyalty, repeat purchases or even a loss-leader strategy. Especially in a market where (a) price trumps everything and (b) fierce competitors like Amazon can afford to bleed them out for as long as it takes.

You can read the full thing here.

 

Why Your Gym Doesn’t Want You To Show Up

For many of us, our New Year’s resolutions are merely a to-do list for the 1st week of January. Or worse.

Counting on that are most gyms in the US (and possibly elsewhere). Which is why they sell many, many more subscriptions than can ever fit inside at one time. 

So what’s behind it?

Yet another bias, writes Ana Swanson in the Washington Post today:

According to behavioral economists, the reason is that people are prone to something called “projection bias,” in which they tend to assume that their preferences in the future will be fairly similar to what they are right now. Projection bias is also why sales of convertibles and houses with pools spike during the summer – and why convertibles bought on days with abnormally nice weather are more likely to be returned quickly.

So what are we to do about it?

1. Give up on Gyms and sit tight.

2. Give up on Gyms and buy exercise machines at home. Then afterwards, when you don’t use the equipment, excuse yourself, because, you know, sunk costs, and sink deeper into your couch. 

3. Or, out-trick your tricky noggin. To quote Ms Swanson:

Though gym attendance tends to taper off somewhat over time,various studies have shown that people who offer themselves these types of incentives continue to go to the gym at higher rates even after the rewards cease.

So if you’re trying to goad yourself into exercising, you might consider creating a contract with yourself and giving yourself a small, designated reward (probably not a cupcake) each time you go to the gym. Then you can gradually change or eliminate the rewards once your gym habit is firmly established. If you stop exercising for whatever reason, just repeat the process.

Here’s wishing you and your resolutions a very Happy New Year!

Magazine Bundling – Bundling That Works?

Cable bundling is bad for consumers. We can all agree on that. Fortunately, consumers are voting for Netflix et al with their wallets, and will in the process, eventually, kill this model. 

But what about Magazine bundling? In other words, what if you could read tens of magazines for a flat monthly fee?

That has legs and some serious growth potential thinks KKR, the major Private Equity firm, which just invested $50m in Next Issue. As Steve Perlberg at the WSJ writes on CMO today:

Call it the Netflix of magazines. Next Issue Media, a subscription service where readers can have access to as many as 145 magazines for a monthly fee, has closed a $50 million financing round with KKR, WSJ reports. The private-equity behemoth — which will take a minority stake in the company — is hoping that magazine readers will show the same love toward the subscription model as music-lovers have to Spotify, book-readers to Oyster, or TV-watchers to Netflix. Next Issue Media has quietly gained more than 150,000 subscribers, who can pay $9.99 a month for publications including Vogue, Esquire, and Fortune, and tack on $5 more for weeklies like the New Yorker and Sports Illustrated. Publishers, for their part, receive a portion of the revenue based on how much time readers spend with their content — an incentive to publish quality stories at a time when the economics of web publishing often encourages a race to the bottom of lowbrow, yet popular and “shareable”, content.

The biggest differentiator vs cable bundling is that if someone wanted to just read 3 or 2 or even 1 of the  magazines in the bundle, they can go get them directly from the publisher – something that is not possible with cable today. And that’s a good thing.  

Still, with reading itself shrinking, I can’t help but wonder if growth for this model will be capped beyond the hard-core-reader market…

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