After the March announcement of a potential shortage in its supply of black Luon pants due to a failure to meet technical specifications—a.k.a., the sheerness issue—the eccentric Vancouver-based lifestyle brand and highly successful global retailer is still repenting.

In a report published Friday, Wedbush analyst Betty Chen downgraded the rating on Lululemon from Outperform to Neutral. Following a survery of 300 Lulu customers, the analyst found that management has not properly addressed the consumer perception of "quality erosion," that the brand may be losing ground to other yoga apparel companies and that only 10 percent of respondents plan to restock once the Luon pants are back in stores. 

We could have called that one. After complaints started to flood in that customers were unknowingly baring their derrieres, Lululemon pulled the designs in question from store shelves and pointed a finger at production managers in overseas factories. Brand loyalists flooded social media pages with complaints and questions, but the brand maintained an oddly cool demeanor, simply directing infuriated customers to the brand's Guest Education Center.

The nightmare didn't end their though, as reports flooded in about store clerks demanding customers to try on the pants and "bend over" before granting refunds and exchanges. Indeed, the trajectory of events since March takes a page from the brand playbook of what not to do after a major product incident.Continue reading...

My Starbucks Idea is now five years-old and remains the gold standard of crowdsourced tip boxes that have actually worked for a brand and delivered ideas from customers (150,00 plus) with innovations (277) that have actually been implemented.

Customers today can order a “skinny” beverage and a cake pop, garner digital rewards for using their Starbucks Card and enjoy free Wi-Fi – all thanks to suggestions from fans.

“For five years, our passionate customers and partners have been sharing their ideas with us on My Starbucks Idea, and we have listened and acted upon many amazing innovations that we have received from this online community,” said Alex Wheeler, VP global digital marketing for Starbucks.Continue reading...

Lululemon Athletica revealed Monday that it expects earnings to drop this quarter due to a dud batch of its popular yoga pants made with its proprietary luon fabric, which its store managers indicated were being returned by customers who found them too sheer for wearing. “Some of our bottoms were made with a batch of black luon that doesn’t meet our standards so we’ve pulled them from our floors and our website.” 

After being downgraded by Credit Suisse and others after the news, an earnings call today meant to detail the company's fourth quarter and full year 2012 results along with 2013 developments such as a move into golf and tennis apparel was instead taken up with answering analysts' questions about how it was handling the crisis—and offering more (ahem) transparency about the situation than has been offered to customers.Continue reading...

Is this a sign of things to come for Canada's retail darling? Lululemon, the Vancouver-based lifestyle brand and highly successful global retailer, over the weekend pulled its Luon black yoga pants from store shelves after discovering the sheer material was just too sheer, a result, some say, of poor quality control on the company's part. On Monday, the retailer announced it would be pulling various—but unnamed—styles of its popular (and pricey) yoga pants, explaining, “Some of our bottoms were made with a batch of black luon that doesn’t meet our standards so we’ve pulled them from our floors and our website.”

“At lululemon, our most important relationship is with our communities and our guests. We recently learned some information about some product that arrived in our stores and we wanted you to know right away,” according to the retailer's blog post. “We are working with our supplier to replace this fabric and other manufacturers to replenish the affected core items as fast as we can. What that means is there will be a shortage of these styles in our stores and online until our new stock arrives. We are also in conversation with our manufacturing partner to understand what happened during the period this fabric was made.”

The brand said it will offer refunds or exchanges to customers who bought the affected item in March, either online or in stores. Lululemon—which was just named Canada's top retail brand by Interbrand's 2013 Best Retail Brands report—is known for turning around products on short order. "Our guest knows that there's a limited supply, and it creates these fanatical shoppers," CEO Christine Day, a former Starbucks executive, told the Wall Street Journal. But the reported pants issue isn't a calculated sales strategy to boost demand and drive sales.Continue reading...

The secret speakeasies of the Prohibition Era hold a certain mystique. There’s something cool about knowing the password that will get you in somewhere.

Fast food joints across America are taking advantage of people’s desire to feel like insiders by offering secret menus—food that doesn’t appear on the lit-up boards behind the cashier.Continue reading...

It may not make your salad taste better, reduce your wait for a table or remove any calories from the creme brulee, but American restaurant patrons can rest assured that Big Data is on the way to make their experience of eating away from home a better one.

With alliances like IBM with the Cheesecake Factory, the providers and purveyors of overwhelming numbers are helping restaurant operators marry their traditional huge volumes of transactional data—such as sales receipts from customers and information about purchase orders to suppliers—with "unstructured" data to help them automate decisions that will improve food safety and quality, labor productivity and other aspects of their operations. The end result is supposed to be more-satisfied customers, greater revenues and fatter profit margins.

"It's about enriching the more structured data with unstructured data in order to gain business insight," Paul Chang, global leader for consumer-products strategy for IBM, told brandchannel. "If you can do that then you can automate these processes."Continue reading...

The International CES show in Las Vegas put branding on the main stage on Wednesday.

The "Brand Matters" keynote focused on the social media aspects of marketing. Moderated by Michael Kassan, chairman and CEO of MediaLink, the keynote began with a one-on-one with Marc Benioff, Chairman and CEO of Salesforce.com. Benioff discussed social marketing, the explosion of consumption and sharing of content thanks to the proliferation of wireless. “The mobile revolution has taken over everything,” said Benioff. “When you walk the show floor like I did yesterday, you see in real-time that everything is connected.”

The keynote then broke into a panel discussion with executives from AT&T, American Express, Coca-Cola and Unilever to explore the magic of unlocking a brand. As CNBC noted, Benioff quipped: "It's amazing that a software professional is on a panel with CMOs; that's never before happened at CES," Benioff said, chalking it up to a shift in CMOs' spending. "These marketers are going to spend more on technology than their Chief Information Officer counterparts in a very short amount of time."

The Brand Matters SuperSession (watch above) then focused on how consumers are really engaging with digital media.Continue reading...

British Airways new "Know Me" program aims to Google all fliers so check-in staff can "put a face to the name before the customer sets foot in the airport," reports the UK's Telegraph newspaper.

BA's current airline practice to conduct a cursory check of flight manifests for VIPs, such as "chief executives of financial companies," but “Know Me” takes it to a whole new level that exceeds KLM's in-flight social matchmaking service.

Search results are forwarded to BA's check-in and front-line staff, armed with iPads, who interact with the public and passengers. The airline carrier says the new program will enable their staff to proactively reach out to select clients. The “Know Me” program will also search individual histories in airline records to see if travelers have previously experienced problems with BA flights in order to have an apology or remedy at the ready.

“We’re essentially trying to recreate the feeling of recognition you get in a favourite restaurant when you’re welcomed there, but in our case it will be delivered by thousands of staff to millions of customers,” said Jo Boswell, head of customer analysis at BA, to the London Evening Standard. “This is just the start — the system has a myriad of possibilities for the future.”Continue reading...