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December 2017

Amazon Key: overreach versus loyalty

The American Heritage Dictionary defines overreach as "to defeat oneself by going too far or by doing or trying to gain too much." Amazon would do better to outsource this service. 

LA Times: Amazon wants a key to your house. I did it, and I regret it, 2017-Dec-7 by Geoffrey A. Fowler

Amazon is barely hiding its goal: It wants to be the operating system for your home. Amazon says Key will eventually work with dog walkers, maids and other service workers who bill through its marketplace. An Amazon home security service and grocery delivery from Whole Foods can't be far off. (Wal-Mart has announced plans to test delivering groceries straight to the refrigerator with a smart lock maker called August.)

Amazon said it doesn't have access to data about when you lock your door or the video feed from the Cloud Cam — both good things. But surely its data team is also crunching the numbers on how Key changes your consumer behavior, especially whether you are buying more stuff from Amazon.

What's so bad about living in an all-Amazon house? The company doesn't always have the best prices or act in ways that benefit consumers. For example, it's currently in a spat with Google, whose smart-home products such as Chromecast and Google Home are not carried by Amazon — and who retaliated by blocking access to its YouTube apps on some Amazon products. (Grow up, you two!)

Amazon Key did give me some peace of mind about delivery theft. But the trade-off is giving more power over your life to a company that probably already has too much. 


Sephora innovates loyalty by wrapping their business around the customer

Mentioned below are just a few of the innovations among Sephora's experiments in customer experience. When we see a company investing so much in us, in our education and well-being, it's hard not to become loyal. 

Retail Dive: 30 minutes with Sephora's head of marketing, 2017-Nov-29 by Cara Salpini

Deborah Yeh, SVP of marketing and brand at Sephora, gave Retail Dive a glimpse into three of the retailer's most dynamic marketing moves.... 

"We want to make sure that we are catering to not just folks who are the ultimate beauty junkies, but also people who are early in their beauty journey and exploring beauty for the first time," Yeh said, noting that Sephora has an exceptionally broad audience to address.

Offering beauty classes not only gets customers in the door, but it also gives them something more than just a product to walk away with. Similar to Lululemon's approach, which was to feature yoga teachers in stores and turn them into brand ambassadors that could both sell clothing and offer free classes, Sephora's beauty advisors are there to give customers an experience first, and sell them a product second.

But even outside of scheduled courses, Sephora stores are looked at as hubs of learning and experimentation — something that is bolstered by the use of in-store tech. Take, for example, Sephora's color IQ technology. If a girl walks in looking for foundation, a beauty advisor can scan her face in three different places to find what should be the perfect foundation for her skin tone. 


How Starbucks captures customer loyalty

For Starbucks, the mobile app is key to customer retention. Competitors should look elsewhere for differentiation, or evolve a mobile app with different benefits. 

The Motley Fool: Starbucks Corporation Talks Digital Strategy, Guidance, and Food Sales, 2017-Nov-16 by Daniel Sparks

Starbucks is regarded as the pioneer in mobile loyalty programs and mobile ordering, proving how a well-executed digital flywheel can help increase sales. But even after years of success in digital, Starbucks' digital flywheel remains paramount to the company's long-term plans -- and it's still driving significant results.

Starbucks CEO Kevin Johnson explained (via a Motley Fool transcript):

Our priority to accelerate the power and momentum of our digital flywheel reflects the fact that digital relationships are among our most powerful demand generation levers. In fiscal '17, Starbucks Rewards membership in the U.S. rose 11% year over year. Per member spent increased 8% in Q4, alone. The cumulative fact is that today, 36% of tender comes from Starbucks Rewards, the vast majority, via our mobile app.

With this compelling data in mind, Johnson said the company will soon start making mobile order and pay available to all customers -- not just Starbucks Rewards members.