Blog Update: Check Out My Continued Blogging Efforts on My Website

You may have noticed that it’s been quiet on the Brand Plan lately. Don’t fear! I’ve moved the blog over to my website, sonyachudgar.com, and will continue my blogging there. You’ll still find my observations on branding, as well as random thoughts of intrigue about New York. See you there!

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The Barclays Center: An Economic Snapshot

Our final project this semester is to write an economic snapshot of a neighborhood in NYC. I chose to evaluate the Barclays Center, the new entertainment and sports arena built in Atlantic Yards in Brooklyn.

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Barclays Center Pinpoints Local Winners and Losers in Business

By Sonya Chudgar

A Darwinian evolution transpired in 1962 on New York’s Upper West Side, a neighborhood so rough, it was cast as the lead antagonist in West Side Story. When local leaders unveiled the Lincoln Center for the Performing Arts, the Upper West Side turned to mirror the Center’s classy endeavors, reducing its grit throughout the ‘60s and ‘70s in favor of gentrification.

The Lincoln Center is just one historical example of a facility that ignites urban cleanup in the neighborhood it anchors. Next on history’s list may be the Barclays Center.

The Barclays Center opened in late September in Atlantic Yards, a community announced in 2003 by Forest City Ratner. The development firm championed the $1 billion Barclays Center as a rebirth for Brooklyn. The entertainment and sports arena repositioned the NBA Nets from New Jersey to Brooklyn, and the NHL’s New York Islanders agreed to join the venue in 2015.

Underlying the announcement was the promise of economic development, from the 300,000 square feet of proposed retail space to the boost incumbent businesses would afford.

But weeks after the arena’s opening, several empty storefronts and “out of business” signs dominate Flatbush Avenue to the Center’s right, illuminating one silent truth in Forest City Ratner’s proposal: While the Barclays Center will spur economic development, it will fundamentally change the nature of businesses that can succeed in its vicinity.

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Changing the Economic Landscape

Unlike the Upper West Side, Atlantic Yards was not born on mean streets. Instead, it meets at the cusp of three Brooklyn neighborhoods: Park Slope, Prospect Heights, and Fort Greene. The brownstone and gentrification revolution swept through the area as it did much of Brooklyn in the late ‘50s. Families swayed by the region’s architectural character, diversity, smaller scale, and local businesses moved in and settled into a residential routine there.

The Barclays Center is turning the routine upside down, says Gib Veconi, treasurer of the Prospect Heights Neighborhood Development Council.

“You might have expected a small business to come in, entrepreneurs to come in, everything else,” Veconi says. “Instead, it’s really the landlords and the national brands that will move in there that are going to be the most benefited.”

Listen to Gib Veconi’s take on the Barclays Center and check out some photos of the area!

The Center lies on a patch of land between two distinct avenues. On the left corridor is Atlantic Avenue, where a haven of national brands such as Target, Designer Shoe Warehouse (DSW), Best Buy, and Victoria’s Secret prosper.

National brands dominate Atlantic Avenue to the right of the Barclays Center.

National brands dominate Atlantic Avenue to the right of the Barclays Center.

Across the street on Flatbush Avenue, the Barclays Center is driving rents up and small businesses out.

“If they increase my rent, I gotta leave,” says A.B. Fulani, owner of an eponymous shop that has sold men’s suits and high-end clothing on Flatbush Avenue for 15 years.

“I’ve been around a long time,” Fulani says. “I knew when [the Barclays Center] opened that it wouldn’t be good. It’s not doing me good so far. I’m not getting the same people that I used to get.”

Veconi says rents surrounding the Barclays Center are hitting $175 per square foot, “which is huge.” Retail rents are usually $5-10 per square foot in the area, according to property listings.

At the Furniture House on 170 Flatbush Ave., owner Ruben Mesa regards the arena with narrowed eyes.

Across the street, Flatbush Avenue has fewer prosperous businesses.

Across the street, Flatbush Avenue has fewer prosperous businesses.

“Well, I’m moving,” says Mesa, whose store has been a staple of the neighborhood since 1991. “So, that’s the story—and it’s because of that.” He points at the Barclays Center sitting 30 feet across the road.

Joy Mesa, Ruben’s wife, says she hopes they find a Brooklyn storefront to relocate to, though she’s not hopeful, given the climbing rents.

“A lot of people will tell you, ‘Oh, you’re getting business because you’re near the Barclays Center!’ But no, we’re not,” she says. “It depends on what your business is. If you’re a restaurant or a bar, then yes, you probably are. But us? Not a furniture shop.”

The ultimate victor of Atlantic Yards is Bruce Ratner, whose firm built the complex. Ratner’s is worth about $400 million, according to USA Today, and he earned another $200 million for selling majority ownership of the Brooklyn Nets to Russian tycoon Mikhail Prokhorov. His nonchalant stance in seizing Brooklyn’s eminent domain outraged locals.

The press office at the Barclays Center did not respond to requests for comment.

Brooklyn President Marty Markowitz has been one of the staunch proponents of the Barclays Center since the beginning, galvanized by the arena’s ability to elevate the status of the borough and rejuvenate business in the area.

The Furniture House on 170 Flatbush Ave.

The Furniture House on 170 Flatbush Ave.

“Of course, I remain optimistic that this project will create thousands of jobs and bring much needed affordable housing and even more vitality to downtown Brooklyn,” he said when the new Barclays Center design was announced in 2009.

But for business owners such as Fulani and Mesa, the Barclays Center has been a misery.

Veconi says the neighborhood dynamic will shift from family folk to those chasing the nightlife, as developers commercialize with the fervor of a child quenching a sweet tooth.

“It’s going to feel very different over there,” he explains. “It’s going to be like something that will resemble SoHo or the Upper West Side than what’s been traditional in brownstone Brooklyn.”

The pivot is already in motion, eradicating mom-and-pop businesses and uplifting the food and beverage industry.

The Winners

Logan Bowles is manager at gourmet falafel restaurant Kulushkät on Dean Street, a block from Flatbush Avenue. He says business has improved since Barlcays opened last month, adding that nearby bars now blow up with customers during big sports games.

Business has increased 50 percent at the Cake Ambiance, a pastry shop on Dean Street with sprinkle cupcakes and red-velvet-cheesecake mélanges.

“Especially after games or shows or whatever, people come out and buy,” says manager Modupe Gonzalez.

Rent has not increased yet at the Cake Ambiance. Gonzalez says she expects it will soon, though the store has no plans to relocate regardless of a rent hike.

A handmade shirt from Brooklyn Rock.

A handmade shirt from Brooklyn Rock.

Another beneficiary of the Barclays Center is Brooklyn-centric shopping.

Yukiko Wada and husband Chris Smith own the apparel store Brooklyn Rock on Dean Street. From the teal exterior to the multicolored lights dangling off the wall, their shop oozes flair.

Everything in the store is handmade by Wada and Smith. Humor radiates from the products, from mugs that quip “I got mugged in Brooklyn” to shirts that depict the Brooklyn Nets as hunters who wield butterfly nets and chase basketball players.

The shop’s native appeal made it an attractive investment to the building’s owner, Wada says.

“I’m sure the arena has driven up rent, but our landlord wanted the right business here,” she explains. “We’re Brooklyn made. He wanted to try to get artists and neighborhood people [into the store].”

Yukiko Wada shows off the Brooklyn-centric apparel at her store.

Yukiko Wada shows off the Brooklyn-centric apparel at her store.

Success stories such as Brooklyn Rock and the Cake Ambiance support the views of Veconi and Markowitz. The two differ in their opinions on the Barclays Center, but both are exact about its impact: it will transform the businesses that succeed in Atlantic Yards whilst growing into Brooklyn’s entertainment heart.

“Think about all the jobs that the arena will generate for the businesses that provide services to Barclays Center, and all the shops and restaurants will be booming thanks to the hundreds of thousands of visitors flocking to this arena,” Markowitz said in September at the Barclays Center ribbon-cutting ceremony.

Until the gentrification is complete, though, the defeated business owners on Flatbush Avenue will dwell under the shadow of the Barclays Center.

The Ironic Man: Dos Equis Crafts Viral Campaign

Avi Dan helped conceive the Dos Equis “Most Interesting Man in the World” viral campaign, though he left the advertising agency before the Man was driven to the hospital for delivery.

The agency that dreamt the Man up was Euro RSCG, where Dan served as global head of business development. As one of the few modern marketing marvels to blossom on television, the giant success of the “Most Interesting Man” was unexpected—it took years for the Dos Equis brand manager to approve the campaign and say yes to the Man—but it resulted in a grand payoff for the original concept.

Sales of Dos Equis doubled between 2006, when the campaign launched, and 2011, when the brand posted 25 percent sales growth even while owner Heineken’s numbers slipped, according to Beer Marketer’s Insights.

“It was very unusual in the sense that, if you look at 99 percent of beer advertising, it’s all about young men and women in a bar,” Dan said. “It’s very formulaic. And we came up with something that completely went against the formula.”

“The Most Interesting Man in the World” is a brazen series of television commercials that illustrates a 60-something hero with a grey beard and even darker diversions. He is a womanizer with a daredevil complex, and when he occasionally indulges in a beer, he says, “I prefer Dos Equis.”

The advertisements, accented by lines like, “The police often question him—just because they find him interesting,” bolstered consumer support and drove Dos Equis to No. 6 on the list of import beers, according to Ad Age.

Heineken marketing and selling expenses are approximately 12.5 percent of its revenue, or nearly $1.5 billion, as reported in the company’s 2012 Q2 report. Dan estimated a marginal amount of that, perhaps a fifth, goes to Dos Equis branding.

While the campaign did not influence the “big boys” such as Budweiser, Coors, and Miller because it is a small player in the category, it did influence a slew of copycats in the industry, “because the clients are saying, ‘Why don’t you do something similar to that?’” Dan explained.

The Man found traction with audiences, and particularly the young demographic, because he acted sardonically. As proof, Dan pointed to the Sept. 22 season premiere of “Saturday Night Live,” in which host Joseph Gordon-Levitt spoofed the campaign in a bit called “Tres Equis” in which he played the son of the Man.

“When ‘Saturday Night Live’ starts making fun of commercials, that’s good,” Dan said. “Because that means it’s penetrating culture.”

Another example of the Man’s influence in culture is his prevalence in the world of memes, or satirical videos, hash tags, and photos that provide commentary on the Internet. “The Most Interesting Man” is a popular go-to for average users to build their own jokes from templates on websites such as MemeGenerator.net and QuickMeme.com.

Memes are effective for both humor and meaningful observations, said Olivia Gonzalez, a senior at NYU studying comparative literature and philosophy. “A lot of people use them to perpetuate important things, like political memes, or things that can be really relevant commentary to what’s going on in pop culture,” she said. “Other memes can just be stupid and funny things that go viral on the Internet. Both are fun and have their own uses.”

Memes featuring the Man are as ironic as the campaign set out to be, reinforcing the principle with which Euro RSCG created the movement.

“The irony that was built into the campaign is the buffer that protects the campaign from people trying to make fun of it,” Dan said. “Young people love irony, and it wasn’t trying to hit them over the head with ‘buy this beer’ or some sort of a personality.”

#PendingLarryQuote

  1. On Thursday, Google’s Q3 earnings premiered on the SEC website hours earlier than planned. Whoops. But the bigger shocker? In place of an obligatory quote from Mr. Page, the report read: PENDING LARRY QUOTE. The Twitterverse, as you can imagine, enjoyed suggesting what that quote might be.
  2. scotthensley
    RT @inbaggiowetrust: “Hey at least we aren’t Facebook, right? Riiiiiiiiight?” #pendinglarryquote
    Thu, Oct 18 2012 10:18:02
  3. cloggiefx
    $GOOG blaming the printer, it is always someone elses fault #pendinglarryquote
    Thu, Oct 18 2012 10:23:11
  4. JakeScottIII
    Googles taking a hit after that unfortunate misfire. I might even buy some stock but that’s #PendingLarryQuote
    Thu, Oct 18 2012 10:24:31
  5. hainsworthtv
    Shares of $RRD extend decline after $GOOG blames firm for early SEC 8K release that sent shares -9% (still HALTED). #PendingLarryQuote $$
    Thu, Oct 18 2012 10:24:41
  6. DonitaPrakash
    “Oops, I didn’t really do that did I?”, says Page, with his finger on the send key. #pendingLarryquote
    Thu, Oct 18 2012 10:26:06
  7. srabil
    Apparently Google says RR Donnelley is to blame for premature earnings release … someone’s having a very bad day #pendinglarryquote
    Thu, Oct 18 2012 10:38:25
  8. ryanbatty
    Feeling 4 #PR colleagues @ $goog. New or experienced, we all fear a #pendinglarryquote moment. Old process collides w/ 24/7 networked world
    Thu, Oct 18 2012 10:43:30
  9. savitz
    Google’s Q3 miss just cost Larry Page $1.8 billion. Maybe he had a quote, but they couldn’t print it. #google $goog #pendinglarryquote
    Thu, Oct 18 2012 10:58:20
  10. ldignan
    RT @savitz: Stock market meme du jour: #pendinglarryquote. Thanks, Google!
    $goog #google http://pic.twitter.com/UChdgp7G
    Thu, Oct 18 2012 10:58:39
  11. aram
    Whew, Mitt lucked out. It seems that #pendinglarryquote is the new #bindersfullofwomen.
    Thu, Oct 18 2012 11:43:16

Library Pivot: The Long Game

The south facade of Bobst Library.

Michael Stoller recalls the cusp of the library industry’s pivot toward digitizing.

It was 1995, when he wrote an article for the Library Trends periodical about electronic journals—and struggled to find any to talk about.

“Most of them were little operations coming out in ascii text form [without formatting] from guys in Colorado in log cabins and what have you,” said the director of collections and research services at NYU Libraries.

In contrast, upwards of 90 percent of journal content today is in electronic form, evidence of a major shift in the library industry as it turns toward digital content.

The electronic pivot is absolutely necessary for libraries, according to Marty Zwillig, founder and CEO of Startup Professionals, Inc., which provides entrepreneur assistance to startups and small businesses. He said libraries risk extinction as they squander patrons to the Internet.

“Libraries, in the traditional sense, are obsolete and rapidly dying, sort of like the train industry after the advent of automobiles and airplanes,” Zwillig wrote in an email. “Some people will always hang on to the old ways, but digital data on the Internet has so many advantages for most requirements.”

Despite the convenience of the Internet, library use remains generally unchanged, according to an annual survey conducted by Harris Interactive. In both 2007 and 2011, 62 percent of respondents surveyed said they had visited a library in the past year, indicating sustained interest in the services.

“As anyone can tell as they’ve walked through the atrium of Bobst Library during the academic year, we’re not wanting for people coming through the front door,” Stoller said. “We’ve got lots of people in this building.”

Libraries are digitizing to keep up with demand. The largest transformation at NYUL, Stoller said, has been a boost in the paper-to-electronic ratio in acquired content such as periodicals and books. Other major shifts involve the creation of a digital video library and bolstered reference functions.

Though the library industry pivot has picked up measurably in the past 10 years, Zwillig said it may not be enough, “since most are run by local governments and institutions, which are notoriously slow to change … Witness also the recent bankruptcy of Blockbuster, trying to hang onto movie rentals, when the world was changing to streaming video.”

Stoller disagrees. “Virtually, all we do is respond to what patrons’ needs are,” he said. “We do with paper when we need to, but people do increasingly expect to see information in digital form.”

Lydia Vasquez, a junior at NYU, said she uses the library not for its electronic resources but as both a study spot and for its book collection, which is five million volumes strong.

The fundamental nature of libraries is—and always will be—to connect people with information and scholarship, Stoller said, adding that the pivot may be slow, but it is ultimately beneficial.

“Technology obviously has substantially shifted, and for the most part overwhelmingly enhanced our ability to do that, to build those connections for people.”

Click below to listen to my conversation with Michael Stoller!

Forbes Blog: NYU Entrepreneur’s Challenge

My BER classmate Megan Durisin summarizes our mission pretty well: for the next few months, our class is going to follow NYU Entrepreneur’s Challenge from its opening ceremony through to the handing of the torch to the next winner in the spring. Follow our stories, progress, and updates on Forbes!

Agrinomics

Over the next few months, my BER 14 classmates and I are blogging about the NYU Entrepreneurs Challenge for Forbes.com.

The challenge offers participants the chance to compete to win up to $200,000 to make their start-up idea a reality. At this stage, the projects are just getting off the ground but the top competitors will be giving full pitches of their business plan by April.

On Sunday, I went to the Entrepreneurs Boot Camp, which featured speaker and serial entrepreneur Bob Dorf. He offered a wealth of advice to attendees, all centered around the message of, “Get out of the building and talk to consumers.” I played around with Storify for the first time at the event and created this profile of what participants had to say about Dorf’s speech on Twitter.

At the event, I also talked with two budding groups about their projects and posted profiles about…

View original post 63 more words

Do People Born Later in the Month Spend More?

Dan Ariely wrote Predictably Irrational in 2008, conducting a series of experiments that proved people often think—and act—irrationally when making choices.

In one of Ariely’s experiments, Professor Drazen at MIT asked students to write down the last two digits of their social security numbers (We will call this number Y). He then asked two questions:

  1. With a simple “yes” or “no,” students were instructed to write whether they would pay $Y for a list of items that included two bottles of wine, a cordless trackball, a cordless keyboard, a design book, and a box of Belgian chocolates.
  2. Professor Drazen then asked them to write down the maximum they were willing to pay for these items (their bids).

In terms of their bids, Ariely found that yes, social security numbers acted as anchors; students with social security numbers that ended high numbers were willing to pay more for this spread of items.

Ariely dubbed this arbitrary coherence: “Initial prices are largely ‘arbitrary’ and can be influenced by responses to random questions; but once those prices are established in our minds, they shape not only what we are willing to pay for an item, but also how much we are willing to pay for related products.” (page 32)

The question I was left with was whether the first question students were asked, about yes or no, had any impact on this idea of arbitrary coherence. Since Arley does not address the results of the first survey question, I decided to head canvas students at Stern School of Business.

Dinner and A Movie: The Experiment

Objective: To what extent must you emphasize a number for arbitrary coherence to exist? Is mere mention of a number enough for arbitrary coherence, or must a direct question relate to said number?

  • Group 1: Control group.
  • Group 2: Ask for a birth date then ask how much they’d pay for two separate items.

Hypothesis: If arbitrary coherence exists, there will be a statistically significant difference between group 1 and group 2, based on an independent samples t-test.

Study design: To study this question, I surveyed 40 people, 20 in each group. I asked group 1 how much they would pay for a pizza pie and for a movie. I asked group 2 their birthday (date) and then asked them the pizza and movie question. By asking their birthday, I primed group 2 with a number. If arbitrary coherence exists, and assuming a homogenous random sample, there should be a significant difference between the estimated cost of pizza and movies between groups 1 and 2.

Analysis:

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In terms of the pizza price, there was not a statistically significant difference between the groups. A t-test of independent samples was performed and yielded a probability value (p) of 0.79. A p-value less than 0.05 is statistically significant, so there is not a significant difference between the primed group and the unprimed group in terms of pizza price (p>0.05,n.s.).

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In terms of the movie price, there was not a statistically significant difference between the groups, as the t-test yielded a value of 0.07. It is worth noting that 0.07 is close to 0.05 so it is what statisticians would call “approaching significance” (p>0.05,n.s.).

Conclusion: While there was not statistical significance in my study, this may not conclusively be the final word on arbitrary coherence. As one can see by the graphs, on the whole the priming groups were higher, even though they were not significant. It may be that with a larger sample size or more precise questions in a more controlled environment, arbitrary coherence could be observed.