Buddy Cup

Square ventures into restaurants

Sarah Frier

Updated 7:56 pm, Monday, April 29, 2013

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  Square has updated its payments register to enable quick-service restaurants to modify orders and customize kitchen tickets. Photo: Laura Skelding, McClatchy-Tribune News Service

Square is adding features to its mobile payment offerings to target the restaurant industry, aiming to continue its move beyond individual merchants such as dog walkers, taxi drivers and food-truck vendors.
The San Francisco company has updated its payments register, which comprises credit card readers and a cash drawer, to enable quick-service restaurants to modify orders and customize kitchen tickets, Square said Monday.
It marks Square's biggest push into the food business since it introduced mobile payments in 7,000 Starbucks stores last year. Square, founded by Twitter Chairman Jack Dorsey, began offering a stamp-size credit card reader in 2009 that lets merchants accept payments on the go. Now, it's seeking to replace cash registers by companies including NCR and increase competition with devices by Intuit and eBay's PayPal.
The majority of Square's merchants are still individuals, Dorsey, who is Square's chief executive officer, said Monday. Targeting specific industries will help the company compete for cash registers as well as securing more of the market for mobile payments for physical goods, which is set to top $170 billion in transactions by 2015, according to Juniper Research.
"No. 1 right now is still individual services like the personal trainer, the dog walker, the golf instructor, the piano teacher," Dorsey said in an interview at Little Muenster, a Manhattan restaurant that uses Square's updated service. "Food is a daily occurrence, and we think we can add a lot of value to that. We can remove a lot of friction and make it easier."
More than 3 million merchants are able to use Square's card swiper, and the company is processing more than $12 billion in payments on an annual basis, it said in announcing the new services.
Square doesn't break out its revenue into categories of users. "Individuals" are most active, followed by "retail" and "services," said Faryl Ury, a spokeswoman for the company.
In the restaurant industry, "we saw a lot of mess," Dorsey added in a Bloomberg Television interview. "We saw a lot of pain that people had to go through to do very simple things, so we thought we could add a lot of value by building a simple system."

Starbucks presses social media onward

Starbucks presses social media onward

Five employees manage Starbucks’ social media and, with 34 million fans, have developed the fifth-largest brand on Facebook.

By Melissa Allison

Alexandra Wheeler, who heads Starbucks’ global digital marketing, says social media has an impact on business.

Social Starbucks

Platforms on which Starbucks is active with at least one “handle”:

Facebook: 51 pages, including 43 in foreign countries. Others are for Starbucks, Starbucks Partners (employees), and brands it owns: Frappuccino, Seattle’s Best Coffee, Tazo Tea, Teavana, Evolution Fresh (Juice) and La Boulange Bakery.

Twitter: 31 handles, including 19 international. Among them are Starbucks Jobs, Starbucks Card and My Starbucks Idea.

Instagram: 22 names, including 14 international.

Google+, Pinterest, and YouTube: One “Starbucks” account each.

Foursquare: Almost all cafes have a presence, managed from one central account.

Source: Starbucks

Back in the social-media stone age, about 2005, customers who yearned to interact with Starbucks could talk to a barista or read quotes on its coffee cups.

“Love wins,” read quote No. 257, from television and radio host Tavis Smiley.

“Evolution is beautiful,” said No. 35, creating a bit of a stink in anti-evolution circles.

Now fans interact with the world’s largest coffee-shop chain without even visiting a cafe. They just log on to their favorite social-media site and there’s Starbucks or Frappuccino or Starbucks Indonesia chatting away.

One of the most successful brands using social media, Starbucks wins more than a popularity contest with its vast numbers of online fans. The sites have become an important way to advertise daily and, occasionally, drive huge numbers of customers into stores.

The fifth-largest brand on Facebook, with 34 million fans, Starbucks trails only Coca-Cola, Disney, Red Bull and Converse, according to SocialBakers.com.

Starbucks executives figure that through Facebook fans and their friends alone, they have access to nearly 1 billion people — a seventh of the world’s population.

On Twitter, its 3.6 million followers rank it fourth, behind Samsung Mobile, iTunes Music and NASA.

And that’s just for the main Starbucks name. The chain has dozens more pages and handles for Frappuccino, Seattle’s Best Coffee, Tazo Tea, other brands and foreign markets.

There are even “Starbucks Partners” pages for the chain’s employees, more than half of whom in the United States are 25 years old or younger. A recent Starbucks Partners photo on Instagram and Facebook touted a California store where three workers made 40 drinks in 10 minutes — for a nearby zombie movie shoot, naturally.

Fans into dollars

Although having followers is important, the real test is interaction and sales, and Starbucks has been winning there as well.

“Starbucks was holding Facebook promotions before most restaurants even figured out this was a space they needed to be in,” said Alicia Kelso, senior editor at Networld Media Group in Louisville, Ky., parent company of FastCasual.com and other online trade publications that track the restaurant business.

Starbucks’ first big social-media promotion came in 2009, about a year after it launched on Facebook and Twitter. It offered a free pastry with drink purchase before 10:30 a.m.

A million people showed up, proving “the channels are not just about engaging and telling a story and connecting, but they can have a material impact on the business,” said Alexandra Wheeler, who’s in charge of Starbucks’ global digital marketing.

It is difficult to quantify a brand’s interaction quotient, but the site Klout.com tries by using more than 400 pieces of information from various social-media networks.

Klout gives Starbucks a score of 83, better than Peet’s Coffee at 77 but below Dunkin’ Donuts at 86 and McDonald’s at 92.

Not all interaction is welcome, however.

A McDonald’s campaign backfired last year when it tried to use Twitter to highlight the farmers from whom it buys produce.

Although McDonald’s used the “#McDStories” Twitter hashtag just twice, the Twitterverse quickly adopted it to post items denouncing and ridiculing it.

“My brother finding a fake finger nail in his fries. #McDStories,” tweeted someone with the handle PrettyTallerr.

Staffing social media

Posting on social-media sites used to be a one-person job at Starbucks.

Now five people are on the job, veterans of social media from Microsoft, the Seattle Art Museum and the Phoenix Suns.

Their charge is to “be authentic” and “be the best barista online.”

That means writing pithy posts like the recently popular, “Sometimes a good cappuccino and a good book are all you need.”

It also means being on top of popular culture.

Sometimes, there may be a reference that resonates with an older crowd, like a photograph on Dr. Seuss’ birthday of his cat’s striped hat drawn on a Starbucks coffee cup.

Often it’s something for younger people, responding, for example, to singer and actress Demi Lovato’s lament that Starbucks baristas do not know her name with a photograph of a specially decorated cup just for her.

Well-planned posts

The posts are not always so spontaneous.

Starbucks’ schedule for social-media topics looks like the departing-flights board at the airport.

Some weeks it focuses on Evolution Fresh juices, other weeks on its global month of (volunteer) service.

The whole social-media team takes photos for posts. Paige Dell’Armi, who has posted for Starbucks for about a year, even keeps backdrops tucked under her desk.

One recent weekday, she and others on the team shot photos and video of another headquarters employee, Major Cohen, making coffee in a French press. The post highlighted how to brew the perfect cup at home.

Whatever the focus, posts on each platform are relatively spare — maybe one a day, sometimes fewer.

“They’re not cluttering up your news feed,” said Kelso, of Networld Media Group. “That’s so important, because people do not want to have brands in their news feeds.”

Starbucks also does not push products or causes too hard, she said.

Its posts are just as likely to be a smiley face, an accidental tweet that in 2011 generated more than 1,500 retweets.

Often they call to mind the quotes on cups from way back in the mid-2000s, some of which are preserved on a Starbucks photo board at Pinterest.

There are new, noncup quotes there as well, like, “Keep calm and make coffee.”

Retailers dangle celebrity names to draw young shoppers

Retailers dangle celebrity names to draw young shoppers

Macy's is experimenting with celebrity brands, such as Taylor Swift's Keds, Friday April 19, 2013. (Abel Uribe/ Chicago Tribune/MCT)

Posted: Tuesday, April 30, 2013, 1:07 PM

Sixteen-year-old Gabriel Aguilar, of Chicago, an avid shopper, prefers to patronize specialty shops such as Urban Outfitters or Forever 21 for party and hang-out-with-friends apparel.

Sears? Not a chance.

"Every time I think of Sears, I think of a washing machine," he said. "They barely have clothing in their commercials, and I never see their commercials on the things that we watch."

But when the high school sophomore learned that Sears soon would be offering skinny jeans branded with pop star Adam Levine's name, his interest was sufficiently piqued - enough that he said he'll be checking out the goods.

Sears and a number of other department stores are hoping they can convince Aguilar and other young shoppers that they're worthy of a second look, and, ideally, their lifelong loyalty. They're beefing up mobile shopping tools and bringing in more affordable, fashionable merchandise as well as signing up celebrities to sell their wares.

The goal: winning over a coveted generation of those born after 1980 who spend about $430 billion annually on discretionary items, according to The Boston Consulting Group.

"Right now, all retailers are going after the millennial customer. They have to, because it represents the future of their business," said Carol Spieckerman, president and CEO of Newmarketbuilders, a retail consultancy.

Bottom of Form

Late last year, Macy's rolled out more than 20 brands, including lines inspired by Madonna and her teenage daughter, Lourdes Leon, known as Lola, and Marilyn Monroe aimed at the younger set, which the company acknowledged cares about "trends, style and value."

In February, Nordstrom revamped its trend-driven Savvy women's department, bringing in new merchandise and lowering the average price point to $50 from about $100.

"We thought we had the opportunity to be more relevant to that truly trend-driven customer who wanted us to be more accessible in price, and that was a hurdle for us before in that department," said Nordstrom spokesman Colin Johnson.

This month, Sears launched a business unit dedicated to signing up celebrities to sell their wares, including trendy dresses and jeans. First on its list: pop stars Nicki Minaj and Levine, who moonlight on the popular TV shows "American Idol" and "The Voice," respectively.

Retail experts say department stores have a ways to go. They have never "owned" the millennial customer, who has typically been the primary focus of specialty shops such as H&M and Old Navy with their cheap-chic merchandise. A recent report by WSL Strategic Retail, a New York-based consultancy, found that 79 percent of millennials shop at specialty stores and 52 percent shop at department stores.

Celebrity branding isn't new. Designers have long competed to win the affections of Hollywood stars. But the embrace of social media among millennials has opened up new opportunities for retailers to capitalize on celebrities' star wattage.

Hoffman Estates, Ill.-based Sears, which has been suffering from sluggish sales for years, has seen some success recently selling apparel with celebrity headliners such as actress Sofia Vergara and the Kardashian sisters reality TV trio. With Minaj and Levine, officials are seeking to capitalize on the mix of music, fashion and Hollywood.

"Any retailer that taps into that celebrity taps into their transmedia presence - online, radio, TV, movies, Twitter, everywhere," Spieckerman said.

Still, Spieckerman and other industry watchers are predicting it will be an uphill climb for Sears, which is better known for its home appliances than its fashion offerings.

Sears' customer is not a fashion customer, according to Roseanne Morrison, fashion director of New York-based retail consultancy Tobe.

"They are trying to envision themselves in different milieus to make it happen. So I don't know. It'll be a big challenge for them," she said. "The jury is out."

Retailers also have to do more to keep millennials coming back, said Wendy Liebmann, CEO of WSL Strategic Retail. The clothing and the in-store "experience" have to be right, she added.

"There are just too many places for younger consumers to shop," Liebmann said.

Macy's has created entire divisions devoted to young shoppers: Its Mstylelab is dedicated to customers ages 13 to 22, and Impulse is aimed at 19- to 30-year-olds.

It has created private (Macy's-only) labels such as urban-inspired denim line G Star Raw and the skateboarder-driven Comune to draw in millennials with varied interests. And it also has the likes of Taylor Swift, P. Diddy and Justin Bieber selling its merchandise.

"We're a destination for prom and for the first interview suit, said Martine Reardon, Macy's chief marketing officer. "It's the 14- to 30-year-old and every year between that's important."

Macy's is also using promotional events, such as a recent book-signing with Bravo TV executive and talk show host Andy Cohen, along with other "retail-tainment," to create excitement in the store.

Still, there are exceptions.

Elizabeth Barton, 25, isn't looking for celebrities and glitz. The Chicago executive recruiter likes new clothes and prefers Nordstrom over H&M, where she was snapping pictures of herself trying on sunglasses in front of a mirror on a recent afternoon.

"I assume celebrity brands aren't well made, and they aren't catered to my taste anyway," she said. "My style is quality over quantity. I'd rather have one nice pair of jeans and one nice purse than a bunch."

Discerning millennials like Barton are what Nordstrom was gunning for when it overhauled its trendy women's department. The goal was to lure younger customers in search of quality with a nod to their limited budgets. The move wasn't so much a change in strategy but a realization that it wanted to be the retailer of choice.

"We thought we had an opportunity to be more relevant to that truly trend-driven customer who wanted us to be more accessible in price, and that was a hurdle for us before in that department," said Nordstrom spokesman Johnson. The response to Savvy's new look has been positive overall, he said.

Nor will the celebrity branding trend be fading soon. It's likely that a growing number of retailers will add celebrity brands to their merchandise lineup, according to Michael Stone, CEO of Beanstalk, a celebrity licensing firm.

"(Celebrity branding) gives the retailer a real point of differentiation," he said, adding that it's a way to create "sizzle" in stores without having to develop brands from scratch. 

Airlines' plan would trample fare competition, critics say

Airlines' plan would trample fare competition, critics say

POSTED: Tuesday, April 30, 2013, 1:15 PM

Jeff Gelles, Inquirer Business Columnist

One of the promises of "Big Data" to companies - a deep, empirical understanding of shoppers' buying habits - has always posed an implicit threat to consumers.  If, say, an airline or hotel chain knows what you've previously been willing to pay, why should it ever offer you a significantly better deal? More broadly, if it can predict your relative level of price sensitivity, it has a powerful negotiating edge.

That's one of the key threats that critics see in a proposal before the U.S. Department of Transportation from the International Air Transport Association. Resolution 787, for which the IATA is seeking approval by June from the DOT, is portrayed by airlines as an important modernization of data-exchange systems that are crucial to selling tickets and filling jets in the Internet era.

But that's not all it does, according to critics such as Kevin Mitchell, chairman of the Wayne-based Business Travel Coalition, which has collected more than 200 signatories on a letter asking DOT Secretary Ray LaHood to reject the proposal.

Mitchell says the problem isn't the new technology, it’s the new business model it would impose on the industry that would end open price competition and transparency.

While the IATA calls the new model a "win-win" for airlines and travel agents, because offers can be tailored to customers, the Business Travel Coalition's letter identifies a serious drawback beyond customers' privacy concerns:

Resolution 787 explicitly says that, before fares are quoted, airlines have the right to demand from consumers personal information that “includes but is not limited to” the customer’s name, age, marital status, nationality, contact details, frequent flyer numbers (on all carriers), prior shopping, purchase and travel history and whether the purpose of the trip is business or leisure. There can be no legitimate justification for charging a traveler more or less based on a number of these items of personal information (such as marital status or nationality), and many of them by design can be used to pinpoint and extract higher prices from those travelers who are likely to be less price sensitive, such as business travelers.

Mitchell, whose group represents corporate and institutional travel departments, offered his own experience as an illustration. He recently checked prices for a trip to Phoenix, an itinerary that from Philadelphia is a hub-to-hub route for US Airways, which is the only carrier to fly it nonstop. But when he checks prices on a website such as Orbitz, he sees not only US Airways' $600-plus ticket price, but other carriers' one-stop offers for about half that fare - a pricing constraint on US Airways.

Under the new model known as the "New Distribution Capability," he says, Orbitz won't have the ability to offer the most-competitive prices from other carriers, because carriers that adopt the NDC will have to agree to stop publishing their fares, schedules, and fare rules. Instead, third-party sites will be limited to offering "plain vanilla" rack-rate prices. Mitchell says that's "the equivalent of a price on the back of a hotel-room door - a price nobody pays."

Mitchell says the lack of transparency will shift negotiating power to the carriers, and produce upward pressure on prices.

"If I go to Orbitz or one of the other sites today, US Airways doesn't know who I am, and I see those other prices. Tomorrow, under NDC, I have to provide" access to personal information that includes his own ticket-purchase patterns.  "Now, US Airways knows it’s Kevin Mitchell going out to Phoenix on business, and they know I almost always fly nonstop. I’m going to pay more under this new model."

Are criticisms such as Mitchell's exaggerated? That's the contention of American Airlines, for one, which urged LaHood to accept the IATA proposal. In a comment to the department, American - which is planning to merge with US Airways - said:

In fact, common sense dictates that NDC will result in better fares and more relevant offers for consumers simply because it empowers more choices. Some consumers will certainly choose to remain anonymous in the shopping process, and NDC will do nothing to deprive them of that option. Because airlines operate with razor thin margins, and in a highly competitive environment, American has no interest in disregarding this segment of the market by offering unreasonably high fares to those who want to remain anonymous. Airlines have a long history of vigorously competing for every last passenger, since, in our industry, one or two passengers can determine whether a flight loses or makes money. NDC does nothing to make the airline industry less competitive or render these consumers any less important. American will want to serve every last one if them and will have to compete for the opportunity to do so.

Mitchell and other critics note that companies are always free to experiment individually with new business models. Their argument to LaHood is that the IATA's proposal, because it comes from a group representing the vast majority of airlines, is anti-competitive.

"Any individual firm can try to price discriminate," he says. "But when 240 competitors agree to a new business model, that’s a red flag,"

You can find comments on Resolution 787 posted online at Regulations.gov under Docket No. OST-2013-0048. Comments are due by Wednesday - you can click here to submit one. 

Managers to Millennials: Job Interview No Time to Text

EMPLOYMENT, EDUCATION, BUSINESS NEWS

By: Paul Davidson

USA Today | Monday, 29 Apr 2013 | 11:23 AM ET

Newly minted college graduates soon entering the job market could be facing another hurdle besides high unemployment and a sluggish economy. Hiring managers say many perform poorly—sometimes even bizarrely—in job interviews.
Human resource professionals say they've seen recent college grads text or take calls in interviews, dress inappropriately, use slang or overly casual language, and exhibit other oddball behavior.
"It's behavior that may be completely appropriate outside the interview," says Jaime Fall, vice president of the HR Policy Association. "The interview is still a traditional environment."
Fall and other HR executives say such quirks have become more commonplace the past three years or so, and are displayed by about one in five recent grads. They're prompting recruiters to rule out otherwise qualified candidates for entry-level positions and delay hiring decisions.
The trend reflects a generation of Millennials—ranging in age from 18 to 34—who grew up texting and using smartphones and social media, says Mara Swan, executive vice president of staffing firm Manpower.
"Life has gotten more casual," Swan says. "They don't realize (the interview) is a sales event."
So much off-the-cuff speaking in tweets and text messages has left many young people with stunted social skills, says Jonathan Singel, director of talent acquisition for Avery Dennison, a packaging and label maker.


Fall says Millennials also have been coddled by parents. "It's (a mindset of) 'You're perfect just the way are,' " he says. " 'Do whatever you're comfortable doing.' "
About half of HR executives say most recent grads are not professional their first year on the job, up from 40 percent of executives who had that view in 2012, according to a recent survey by the Center for Professional Excellence at York College of Pennsylvania.
The HR Policy Association recently launched a website, jobipedia.org, to provide advice to first-time job seekers about interviewing, resumes, and workplace behavior.
Why some job candidates flunked their interviews:
• Taking calls and texting. A male graduate student seeking a managerial position in Avery Dennison's research and development unit took a call on his smartphone about 15 minutes into the interview. The call, which lasted about a minute and wasn't an emergency, ruined his near-certain chance for a job offer, Singel says.
"If he thought that was OK, what else does he think is appropriate?" he says.
• Helicoptering parents. A man in his late 20s brought his father into a 45-minute interview for a material-handling job on an assembly line, says Teri Nichols, owner of a Spherion staffing-agency in Brooksville, Fla. At Cigna, a health insurance provider, the father of a recent grad who received an offer for a sales job, called to negotiate a higher salary, says Paula Welch, a Cigna HR consultant.
• Pets in tow. A college senior brought her cat into an interview for a buyer's position at clothing retailer American Eagle. She set the crate-housed cat on the interviewer's desk and periodically played with it. "It hit me like—why would you think that's OK?" says Mark Dillon, the chain's former recruiting director. "She cut herself off before she had a chance." 

Pizza Hut and XBox

Will Longer Hours Boost Sales?

Thousands of chain restaurants are extending their hours in hopes of getting more diners through the door

By SARAH E. NEEDLEMAN

Fast-food chains are hanging a lot of hopes on night owls and early birds.

With a lean economy squeezing their sales, thousands of restaurants are extending their hours to try to get more people through the door. But franchisees are learning that it can take a lot of work to get the most out of off-hours snackers.
The basic problem: Restaurants need to shoulder more expenses to keep the lights on longer—but the crowds usually aren't that big at odd hours, and customers don't end up spending very much. In fact, franchisees and industry experts say, some markets may not have enough all-night types to make the concept work at all.
Longer hours appeal mostly to "younger folks out and about, and they have cut back so much on restaurants," says Bonnie Riggs, restaurant-industry analyst at research firm NPD Group. "Maybe if you're in some big metropolitan or tourist areas it's worthwhile."

24-Hour Patty People

The concept of extended hours has made big inroads at some franchises. About 45% of McDonald's Corp.'s 14,100 U.S. locations are now serving customers around the clock, up from about 30% in 2005. Dunkin' Donuts has doubled its number of 24-hour restaurants over the past decade to nearly a third of its more than 7,000 U.S. outlets.

Getty Images

Chains like McDonald's have been extending hours in an effort to boost sales.

It isn't just night owls they're going after. Fast-food chains are also trying to appeal to early diners. For instance, Taco Bell, a subsidiary of Yum Brands Inc., implemented a breakfast menu for the first time last year, and today 825 stores across 14 states open their doors between 7 a.m. and 9 a.m., instead of the usual 10 a.m.
For many franchisees, extending hours is an alluring idea, since it lets them bring in more revenue without boosting fixed costs like rent. It can also simplify other parts of the workday: Outlets that stay open around the clock, for instance, can eliminate procedures for opening and closing the restaurant.
But some owners and franchise experts worry that the practice simply doesn't bring big payoffs. Even though fixed costs don't rise, owners say, there are added expenses such as higher utility bills and extra pay for hourly employees working the graveyard shift. Simply finding people to work those hours can be a struggle.

"It is always difficult to get people [to work] overnight. It's just contrary to the body," says John A. Gordon, a restaurant consultant in San Diego. "When you get them, you work hard to keep them."
Meanwhile, the boost in sales can be meager. Research shows that consumers still prefer to eat at fast-food joints during traditional hours. Noon to 1 p.m. is the busiest time of day for quick-service restaurants, accounting for about 15% of customer visits last year, according to NPD Group. In contrast, the hours between 9 p.m. and midnight represented just 6% of visits, and the hours from 1 a.m. to 4 a.m. less than 1%.

Waiting Up Late

A group of franchisees aired those kinds of concerns in a 2008 lawsuit against Burger King Holdings Inc. —which, unlike most chains, mandates extended hours instead of giving restaurant owners a choice.
In 2008, the chain required franchisees to open at 6 a.m., an hour earlier than was previously required, every day but Sunday. And the chain said stores should stay open until 2 a.m., three hours later than was previously required, on Thursdays, Fridays and Saturdays.
Three franchisees sued Burger King in the 11th judicial circuit court in Miami-Dade County, Fla., to protest the move. They argued that the mandate violated their franchise agreement, and they lost money by staying open longer. They also said that the mandate exposed managers and employees to "unreasonable and unacceptable risk of crime, injury, and even death," according to court papers.
On some evenings, the franchisees sold as little as $5 worth of items between the hours of midnight and 2 a.m., according to attorney Robert Zarco of Miami, who represented the plaintiffs in the case.
"The longer the hours the franchisee is open, the more money the franchiser will make in royalties and advertising fees, regardless of whether the franchisee is losing money," he says.
Burger King argued in court papers that it could mandate extended hours of operation. The case was settled in February of last year. Now all franchisees must stay open until midnight every night. Burger King says, "The hours of operation at Burger King restaurants enable us to more effectively compete with our peers. [The company] believes its policy provides franchisees with greater flexibility, allowing them to open earlier than 6 a.m. and remain open after midnight based on the needs of their individual markets."

Making It Work

For all the risks, some franchisees argue that extended hours can work—provided owners do their homework before implementing them. "You can't take the lifestyle of a certain demographic and universally apply it to everyone," says Peter Riggs, vice president of brand promotion for Pita Pit USA Inc., based in Coeur d'Alene, Idaho.
Many of the chain's franchisees established their businesses in the early 2000s in college towns, where hungry students could order veggie pitas, gyros and smoothies until 3 a.m. But when the brand started expanding into other markets in 2005, some franchisees discovered that consumers in those areas didn't have as much of a yen for late-night eats. As a result, they scaled back their hours to better reflect local dining habits.
To find out if expanding hours makes sense in a given market, Mr. Riggs recommends patrolling the neighborhood during the period you're thinking of opening to see how busy it is and what the competition is like. He also suggests asking existing customers about their interest in coming in during hours when your restaurant is normally closed.
Leticia Bernal-Bosey did this about a year ago, before expanding the hours of a Pita Pit she owns in Albuquerque, N.M. She canvassed local bars near her restaurant and discovered they often stayed busy until closing. What's more, none of them served food. "There's a lot of night life in the area," says Ms. Bernal-Bosey, 30 years old, adding that her outlet's overall sales have increased 10% since she tacked on the extra hours.
Franchisees also advise having patience when it comes to building traction with late-night sales. Joe Hertzman, owner of 13 Checkers/Rally's Drive-In Restaurants Inc. outlets throughout Indiana and Kentucky, used to close his restaurants at midnight. Then in 2008 he expanded the hours at one of them to 2 a.m. on Fridays and Saturdays and 1 a.m. the rest of the week.
Sales between Sunday and Thursday started out bleak, with night owls spending an average of just $35 during that final hour after midnight. In comparison, "an average reasonably strong" lunch hour brings in $600 or more, he says.
Over the next few months, more customers began stopping by on those days for late-night burgers and fries, prompting Mr. Hertzman to test their appetites for even later hours. Now, with some of his Rally's units open on weeknights as late as 4 a.m., he's averaging $50 in sales for the final hour, while on weekends, when some units close at 6 a.m., the last hour brings in an average of $100. "You have to stick with it," says the 56-year-old franchisee. "It took us six months to a year to really learn the anomalies of each store."

McDonald's considers all-day breakfast, delivery

McDonald's considers all-day breakfast, delivery

Michael Winter, USA TODAY1:11 a.m. EDT April 27, 2013

Company head says expanded hours and menu possible, along with delivery and loyalty rewards.

(Photo: Jeff Kauck, McDonald's)

Story Highlights

• McDonald's CEO says company is considering serving breakfast all day
• CEO: McDonalds is also testing delivery in some U.S. cities and overseas
• Thompson admitted the company had been 'a little bit late' to the growing desire for take-out

McDonald's is considering serving breakfast all day, offering rewards to frequent eaters and even delivering the golden arches to your door, the company's chief said Friday.

In an interview with CNBC, President and CEO Don Thompson said the world's largest fast-food chain "has looked at breakfast across the day" and "innovative ways" to expand hours in the United States, noting that it's already happened in other countries.

"I think we'll be seeing some of those things in the near future," he said.

Going mobile is a major nugget of McDonald's plans, so it's testing delivery overseas and in some U.S. cities, which were not named. Burger King already delivers in Washington, D.C., Chicago, Houston, Los Angeles, Miami, New York City and San Francisco.

Thompson admitted the company had been "a little bit late" to the growing desire for take-out, and he sees "big, big opportunity" for delivery, especially where drive-throughs don't exist.

About 20% of McDonald's outlets offer delivery service, and nearly 50% are open 24 hours, the financial blog Seeking Alpha said.

McDonald's has teased consumers with the prospect of all-day breakfast before. In 2006, then-CEO Jim Skinner said the restaurant chain was making operating changes that would make it possible to offer the breakfast menu 24 hours a day.

Like all retailers, McDonald's is adapting to the tastes and preferences of the millennial generation, and the shift toward healthier choices.

Seeking Alpha offered a peek at the menu of the near future:

New products will be introduced in the United States in the following growth categories: chicken, premium beef, breakfast, and beverages. Some of the specific new products include: Egg White Delight, a lower calorie breakfast item; Premium McWraps, an innovation from Europe that is being introduced globally; and Blueberry Pomegranate Smoothies, which originated in Canada.

Last week, McDonald's reported an increase in its first-quarter profit, but weaker than expected U.S. and European sales disappointed Wall Street.

Thompson told CNBC that the "challenging retail environment" resulting from "the starts and stops of a recovery" may ease some later in the year. McDonald's has increased hiring for breakfast and late night.

"We always plan for the environment we're in," he said. "Right now, we don't expect to get the benefit of a resurgent economy."

How the NFL Turned Its Draft Into the 'McRib' of Sporting Events

A-B, Nike, Verizon, Pepsi Among 19 Sponsors for Three-Day Extravaganza Expected to Tally 50 Million Viewers

Published: April 28, 2013

The legend goes that when a fledgling ESPN asked NFL Commissioner Pete Rozelle to televise the 1980 NFL Draft, even the PR-savvy Mr. Rozelle doubted anybody would tune in.
Fast-forward 33 years and John Brody, senior VP-sponsorship and sales for the NFL, expected 50 million viewers to watch the three-day event across ESPN, NFL Network and NFL Mobile last Thursday through Saturday nights.

Advertisers adorn banner pitching the process.

Among league sponsors and advertisers, the NFL Draft is now viewed as a "tentpole event" where they can directly connect their brands to the country's most-popular sports league, Mr. Brody said. A confirmed 19 sponsors activated around this year's event at Radio City Music Hall vs. 16 in 2012. Among them: Anheuser-Busch; Nike; Verizon; Pepsi; GMC; Visa; EA Sports; Under Armour; Gatorade; and Castrol.
Despite the recession, ad support is growing for the NFL Draft, which now competes with entertainment and reality shows in the heart of prime time. Advertisers spent roughly $15 million across ESPN and NFL Network in 2012 vs. $11.9 million in 2011, according to Kantar Media.
Current NFL Commissioner Roger Goodell moved Round 1 to Thursday nights in 2010 from its longtime perch on Saturdays. The gamble paid off: ESPN's Round 1 coverage last year averaged 6.7 million viewers and a 4.4 rating vs. 5.1 million viewers and a 3.4 rating in 2009.
"To the credit of the NFL, it's the most robust league," said Ernest Lupinacci, founder of branding consultancy Ernest Industries. "They announced the [2013 regular season] schedule and people went crazy. It was as if they let us know they were bringing the McRib sandwich back."
"Our sponsors crave more access and more connection to the game the same way the fans do," according to Mr. Brody. "Our partners are enablers: They're the ones who connect the sport to the fans."
Here's how sponsors such as Verizon, A-B and Nike integrated their brands into the festivities:
??Verizon was the presenting sponsor of Round 3. The company hosted a "Draft Eve" party Wednesday, where its executives and customers mingled with top draft picks and NFL starts.
??Bud Light signed on to sponsor Round 2 Friday night as well as sponsor ESPN's coverage. Bud Light's promotion offered to fly 32 NFL fans to New York (one representing each team's fan base) and give them a VIP experience that included a dinner reception with 32 NFL alumni, along with green-room access at Radio City.
??Nike, which took over as the NFL's official outfitter last season from Reebok, provided top prospects with No. 1 Nike jerseys. Similarly, the league's official cap, New Era, handed out special "Draft Caps" to prospects onstage. That's prime product placement when prospects ascended the stage for the traditional handshake and hug with Mr. Goodell.  

Change of Pace

Attention Retailers: Amazon Prime members are located in Aisle 5

By Matt Pace | April 17, 2013 | Retail & Consumer Products No Comments

 The growing popularity of Amazon’s membership program, Amazon Prime, has sent shockwaves among rival retailers since debuting a few years ago. For $79 a year, Prime members receive unlimited 2-day free shipping on eligible Amazon purchases (with no minimum order size), as well as access to Amazon’s video-on-demand service, Amazon Instant.

The rate of adoption of Amazon Prime, coupled with the growing reach of Amazon.com, has caused rivals to scramble to offer alternative programs and initiatives to stay competitive, fearing that Prime dramatically lowers members’ shopping activity on non-Amazon websites.

What can we learn from the shopping behavior of Prime members, both on and off of Amazon.com, and how do their online shopping patterns differ from that of non-Prime members?


In terms of demographics, Prime members skew younger and are more likely to be upper middle class than non-Prime shoppers on Amazon.com.  For example, 22% of Prime members earn less than $30,000 per year, compared to 27% of all Amazon shoppers.  Prime appears to be resonating among the same key consumer segment drawn to club stores such as Costco and Sam’s Club.

Compared to other shoppers on Amazon.com, Prime members return to the site 3 times as often and spend nearly two hours on the site each month, albeit some of this time is spent watching videos.  In addition, Prime members’ purchase propensity (or likelihood to purchase on Amazon in a month) is 78%, compared to just 18% among non Prime visitors to the site.

One might expect that the ease by which Prime members quality for free two-day shipping would dissuade them from building “baskets” on Amazon, in favor of making purpose-driven, one-off purchases.  While the total value of Prime members’ Amazon orders are indeed 17% lower, Prime members actually purchase 11% more items per order than non-Prime shoppers.  They are also still willing to pay for shipping, and do so on 39% of their Amazon orders, as a result of purchasing items that do not qualify for free shipping (sold by other sellers), or their opting for expedited shipping.

Despite Prime members’ $79 investment and associated heightened activity on Amazon, there is yet hope for rival retailers worried that these shoppers are now exclusively shopping Amazon for all their needs.  In general, Prime members do not show a significant difference in their propensity to shop on rival websites, compared to the average person online.  For example, 19% of people online in January visited Target.com, compared to the 20% of Prime members who visited the site.

When actually shopping, however, Prime members’ consideration of rival retailers considerably exceeds that of non-Prime members.  Note that 31% of Prime members shopped on both Amazon.com and Walmart.com in January, compared to 24% of non-Prime members on Amazon.  While Amazon Prime has attracted value-conscious shoppers, their membership in the program does not make them Amazon loyalists.

Amazon Prime generates an enviable stream of subscription revenue and sales for Amazon.  It also enables Amazon to trumpet higher usage stats for its Amazon Instant service, but what it doesn’t appear to be doing is building a wall around Prime members.  For rival retailers, Prime members are up for grabs and are in fact coursing through their virtual aisles in an attempt to find the best deal.

Key Questions for Retailers and Brands:

• How can retailers better convert Prime members shopping on their sites?
• How does membership in Prime impact brand consideration and loyalty?
• What are Prime members’ path to purchase across various product categories?
• How can rival retailers learn from the shopping behavior of Prime members to develop their own loyalty programs?

Mobile Wallets: A Primer for Retailers

Mobile Wallets: A Primer for Retailers

This booming technology promises to make paying easier. But figuring it out can be a challenge.

By JAVIER ESPINOZA

Mobile wallets can make things a lot simpler for shoppers. But they can leave retailers confused.

The idea: Shoppers download software to their mobile gadget that links the device to a credit or debit card. Then, when they get to the checkout line in a store, they can use their phone to complete the sale, often by tapping it against a scanner.

The trouble for retailers is that there are dozens of different mobile wallets out there, and no clear market leader. So, merchants who want to cover all their bases will have to support multiple wallets. And that means installing lots of different software on their sales terminals, and possibly getting new hardware, too.

For merchants who already have their hands full, figuring out all those details can seem like a lot of work. But some experts say that mobile wallets offer big advantages—from winning over customers to collecting valuable data about who buys what.

Here's a look at the basics of this emerging (but still fragmented) technology.

How do mobile wallets work?

Just as there are many different providers of mobile wallets, there are a number of different technologies that make them work.

Mercury News/Zuma Press

Mobile wallets like Google's (above) let customers pay with a phone at checkout.

Some mobile wallets require additional hardware at checkout. Google Inc.'s Google Wallet app, for instance, uses a technology called Near Field Communication that requires customers to tap their phone on a special reader to make a transaction. And services like SCVNGR Inc.'s LevelUp use a QR code—those familiar squares that look something like bar codes—on the customer's phone that needs to be scanned by the checkout clerk with a special reader.

Other wallets don't need any additional gadgets, just new software on existing sales terminals. Services like Paydiant Inc., for instance, create a QR code on the retailer's screen at point of service. Customers choose which payment card they want to use to complete the transaction, then scan the QR code with their phone to get charged.

Similarly, there's a technology called geofencing that taps into a smartphone's GPS or Wi-Fi and creates a secure connection with a retailer's sales terminal. The customer's name and photo appear on the retailer's screen, and the clerk taps the screen to complete the sale.

Although this technology works with regular checkout terminals, one of the most popular versions of it, Square Inc.'s Square Wallet, is aimed at retailers who use smartphones or tablets to ring up sales.

In most cases, retailers can have multiple wallet apps installed on their point-of-sale terminals at once, so they can support different providers at the same time. Similarly, the same piece of hardware will generally work with different wallets that use the technology.

How much do they cost?

There are two issues to think about here. One is the cost—if any—of setting up the service. In most cases, it's free to download mobile-wallet software to a point-of-sale terminal. If a mobile wallet requires extra hardware, it can often run around $200 for a QR-code reader and $100 for an add-on to an existing terminal for Near Field Communication, says Chris Gardner, co-founder of Paydiant.

The second issue: processing fees for transactions. "Some wallets simply run a transaction using the retailer's existing payment processor and don't charge the retailer anything additional," Mr. Gardner says.

Paydiant, Google and others fall into this category. Others act as the payment processor and bill the retailer directly for the transaction. In some of these cases, experts say, wallet providers can offer slightly cheaper rates than bigger processors.

What else can you do with them?

In some cases, wallet providers offer extra services to retailers. For a fee, some wallet providers will let retailers access customer data, such as how many times a particular shopper has purchased an item or what the best-selling item of the week was. Some will also let stores set up coupon services or loyalty programs for customers who make purchases with the wallet.

"This is an exceptional opportunity for a small business: getting to know their customers," says Richard Crone, chief executive officer of payments-consulting firm Crone Consulting LLC.

Other wallet providers, such as Paydiant, let stores create mobile wallets with their own brand on them. So, customers wouldn't use, say, Paydiant's app at checkout, they would use one with the store's name on it and assign any card they wanted to it. Stores can then collect data about customers' transactions with the wallet, send them coupons and set up loyalty programs and other deals.