The On-Demand News Riff, Jan. 3, 2018

Replacement parts made where they are needed
A van containing a 3D printer arrives at your front curb, the plumber knocks and, granted entrance, checks your sink downspout, which is leaking. Problem identified, she calls up the broken part on her computer and prints it in the van, installs the new downspout, and finishes the job. No inventory to carry around, just a focus on service. Amazon received a patent this week that supports this scenario. The human is the critical factor here, as they translate the customer’s issue into a plan, identify the broken or missing parts, print them (though this is a machine’s job), then installs it.

Amazon is big in online sales, but still only four percent of retail in U.S.
It was a very good holiday season for Amazon, with growing sales and the massive adoption of Alexa-enabled devices. However, keep in mind that after all this success and 20 years of investment to get to 44 percent of online commerce, Amazon still accounts for only 4 percent of U.S. retail sales in 2017. This suggests there is lots of room for growth at Amazon, as well as plenty of inroads for challengers to pursue. We think the brand service experience will be a keystone of expansion as Amazon enters the neighborhood. Target isn’t the solution for Amazon’s local challenge, but Target’s salespeople may be useful to the project. How to get those Target people out of the store and into the market, that is the question.

Teens and Commitment: It’s an Exclusive Thing
Piper Jaffray surveyed 1,100 teens about their spending habits and the results reinforce the importance of relationships with young buyers, according to MediaPost. As noted yesterday, Gen Z is more deliberative, less prone to impulse buying, and already saving for their future. The Piper Jaffray study also found that young consumers look for exclusive offers, which are based on an exchange of information that creates loyalty:

Teen shoppers are savvier shoppers than you might think. Budget conscious, they look for low prices. They want to protect their investments by buying quality products, but if you want to gain their loyalty, they are looking for exclusives and membership benefits. The older the teen, the more important this value exchange becomes.

The exclusive offer/price as basis for commitment is important to understand and use when establishing customer relationships.

Gannett sees the relationship as central: Memberships, not subscription
Gannet recognizes the growing importance of relationships, too. CMO Andy Yost explained to Publishers Daily: “‘Subscription’ sounds transactional, ‘membership’ sounds like a two-way relationship that gives you access to things you can’t get elsewhere.” Consequently, the newspaper giant is offering $2.99/mo. memberships on its USA Today properties and utilizing its content archives and production capabilities to package new personalized or demographically targeted news experiences. The company also offers an Insider Loyalty Program that bundles subscriptions with special offers and discounts.

Here’s the key: Believing they are getting value back, members share information that helps to personalize and target content (the Gen Z teen who is loyal in exchange for exclusives, above, is engaging in the same behavior.

BloomThat acquired by FTD, “Uber for Flowers” sold cheap
Scale doesn’t come easy, as flower delivery startup BloomThat has found. The company, which reportedly has lowered its burn rate to just $15,000 a month after raising $7.5 million nine months ago, was purchased by FTD. TechCrunch said the company was purchased for “a small amount of money.”

BloomThat has struggled to acheive scale, or even to beat existing flower delivery services to the consumer’s door. BloomThat promises next-day delivery. Not really an “Uber for Flowers” as much as a delivery play that didn’t find its value proposition. On-demand companies must be faster than traditional alternatives — if successful, they can command a premium — and BloomThat didn’t overcome that first hurdle. Inside FTD, however, the BloomThat team will find delivery resources in existing FTD florist shops looking for an edge that they can use to jump ahead.