Excerpt:

How competitors can leapfrog Amazon:

• Create a private brand architecture to support the retail brand. Align your brand portfolio to explicitly support your overall retail brand, and don’t let your portfolio run amok. Every new private brand added must have a clear and incremental role (e.g. targeting a different customer segment) and create tremendous value for your shoppers in order to build loyalty.
• Commit to private brands, and exercise patience. With astronomical investor expectations, Amazon cannot afford to be patient in building private brands. Competitors can press this advantage by committing to long-term, sustained private brand building efforts. The higher margins that private brands provide will also be critical in the future with more sales going to e-commerce, where shipping costs dilute profitability and pricing pressure is extreme.
• Solve online challenges for private brands: Private brands depend on conversion at the shelf, with shoppers comparing price and packaging vs. name brand alternatives. With today’s online shopping experience (one page showing one item) this conversion and comparison does not happen. Retailers must innovate their e-commerce experience to highlight their private brands’ compelling value.

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Expanding an Empire: Relishing the Reign of Burger King

How does a newly-appointed, 32-year-old CEO begin his rule over an already established Burger Kingdom? For Daniel Schwartz, regal wisdom was found in the kitchen itself, as the former Wall Street prodigy cooked up Whoppers and even cleaned the bathrooms in order to get a deep-dive understanding of the business. From the ground up, the young chief pulled no punches in drastically cutting down on expenses – from office supplies to the royal corporate jet – and simplified the menu in order to streamline the entire enterprise. Schwartz also sent thousands of employees to the guillotine, reducing the corporate headcount from nearly 40,000 to a scant 1,200. Under his firm but fair monarchy, the company’s market share has risen threefold with a stock price 35% higher in just four years. A key piece of advice from the young sovereign? “You have to work really, really hard to put yourself in a position to get lucky” – certainly solid counsel on how to have it your way.

Sound Strategy: The Innovation Imperative

In our modern world fraught with daily disruption, companies of all kinds have jumped on the breakthrough-building bandwagon. But simply pouring resources into every “random act of innovation” isn’t enough, as can be seen by the struggling 65% of companies investing a whopping 15% of their revenue into the initiative. So take a tip from PwC’s Strategy&, and be sure to align the innovation strategy with the business strategy with these three main approaches: 1) be a need seeker, focusing on the customer demands in order to create new ideas; 2) be a marker reader, focusing on incrementally enhancing those products that have already proven themselves in the market; or 3) be a technology driver, relying on the strength of your internal tech opportunities to develop truly new products. No matter which you choose, the key is to be specific and explicit about your chosen avenue, and make sure the entire organization is all on the same page for success.

Talking Tactics, Tête-à-Tête: Flexing the Marketing Muscle

Overseeing 150 locations across four major cities, how does the CMO of Town Sports International juggle all those gyms? You can keep your own firm fit with a tip or two from this Q&A with Michelle Ryan:

• On the secret to selling fitness: “You have to ask, ‘How do we make sure that we’re accommodating to the member and making sure that we’re customer-focused?’ We’re here to improve lives through wellness and must make sure we stay true to that.”

• On the challenge of localization and a unified experience: “Other gyms are closing every other day, and trust is lost. We’ve been priding ourselves on this neighborhood gym that we train our local dry clean owners, the Starbucks employees…that’s really important to us and drives the neighborhood feel.”

On attracting a Millennial membership: “They don’t care about logos. They don’t care about the status. So we make sure to give them an experience when they’re in the club and create a connection.”

Powerful Partnerships: Amazon’s Latest Acquaintances

It wouldn’t be a week of business and branding news without a power play (or two) from Amazon. First up: the sweet smell of Swedish simplicity might soon be available with 2-day shipping, as IKEA begins testing and piloting new online sales methods with an as-yet-unnamed partner. The tricky challenge will be facing the high cost of shipping furniture without doing too much damage to the bottom line. But the bigger news came today as the massive online marketplace announced plans to purchase Whole Foods Market for $13.7 billion, sending competitors Walmart and Costco into a tizzy over the retailer’s relentless domination in seemingly every category. Looks like Alexa’s got her work cut out for her, as soon there may be nothing that can’t be bought with the mere sound of your voice…

Video Victory: Cream of the Crop at Cannes

That’s all for this week! With next week’s Cannes Lions on the horizon, we’ll leave you with this look at the very best commercials of the last 15 years, showcasing the power of the Prix…

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