When the Male Market Softens...Hooters Discovers Demographics

51% of the population are women. So are 60% of college students. And you know what is happening in the work force.

So it is no surprise that a bar/restaurant chain catering egregiously to 'dudes' is not enjoying the same financial success it might once have done. With household incomes in decline, there isnt enough money to go around for segmented family entertainment. Family, more than ever, has to be inclusive. Places where women feel uncomfortable, never mind unwelcome, have some 'splainin' to do.

In addition, getting expense account charges approved when the boss is just as likely to be a woman as a man makes submitting bills from the raunchy bar scene a more questionable career-enhancing strategy.

The larger issue is change in the face of demographic and psychographic changes that portend shifts in mores, values and, ultimately, purchase decisions. In the post-industrial economy, people are what they buy. Their choices broadcast more about them they did when price was all that mattered.

Men, perhaps more than women, have had to adjust. It's a process - and it is far from over. But any enterprise that assumes attitudes are static is likely to find itself on the wrong side of history. JL

Duane Stanford and Leslie Patton report in Bloomberg Businessweek:

Four years of revenue declines have forced Hooters to revamp its appeal. Women, even fully dressed ones, are welcome

Does Listening to Music at Work Make You More or Less Productive?

Is your work cognitively demanding?

Because that appears to be the crucial determinant as to whether listening to music makes you more or less productive. If it is, ie, if you actually have to think while you work, rather than performing rote tasks, the research suggests it is more likely than not to be a distraction.

If you 'have' to listen at work, classical or instrumental music is the most conducive (though for those Boomer survivors of the 60s and 70s this probably does not include the 17 minute riff from 'In-a-gadda-da-vida'). Music with singing and lyrics is less beneficial to completing tasks accurately and to quicker output. Singing along is most emphatically not a productivity enhancing activity.

There are, of course, exceptions. 'Well-practiced experts' like surgeons have reported that background music relaxes them and helps them concentrate. Unfortunately, anesthesiologists report that such music is distracting.

There is probably no right answer applicable across all jobs, personalities, age groups, functional specialties, office configurations, shoe sizes or whatever other metrics may influence performance. Knowing that it can be measured is worth remembering the next time someone in the office comments about your expensive headphones. JL

Annie Paul reports in Time:

Music can lift your mood and give you a relaxed focus, but it decreases your performance on cognitively demanding tasks.

How the Peripheral Becomes Central: Apple, Islam, Economics and the Unified Theory of Everything

Second year in a row: Apple introduces a new phone. Which, in many ways, is not all that different from last year's model.

Except for one thing, that most people think is peripheral, literally and figuratively. Until it becomes The Point.

Last year's controversy was about SIRI, the voice-activated assistant that was considered a toy-like after-thought. Except that it dominated the conversation and defined the new model.

This year? The new adapter. Which renders obsolete all previous adapters as well as all the connections to all the other Apple devices you might own, never mind the adapters in all the hip hotels and clubs in the world that finally got around to providing universal Apple connectivity.

Meanwhile, back in the rest of the world that doesn't orient its life around new phones (shrinking though its size and influence may be), there are riots in what last year were considered those brave and praise-worthy peripheral societies that produced the Arab Spring. In Europe, the affluent, central countries like Germany, France and the Netherlands are trying to figure out what to do with the nations no the periphery - Greece, Portugal, Spain et al - that are imploding economically.

So, maybe Apple is doing this as part of some global deep wave theory of change. Maybe the periphery is where the future gets revealed. We thought that convergence was where it was at. The end of history. Universal power sources. One platform fits all. But maybe that was bunk. Maybe Steve was right. His way or the highway. You dont want to fork over another $29 on top of whatever you're paying in yuan, euros, pounds or dollars? Fine, flash your Nokia and Android to your friends and watch them grimace at your humiliation.

Maybe all these seemingly peripheral changes in peripherals reveal something profound about the future as well as conceal something not so profound about the present. Like, that we're not quite ready for whatever the next big thing is but we have to produce a new phone or a new government or a new economic plan to keep our customers/voters happy.

Politics, economics, technology and $29 adapters. Who knew?JL

Andrew Leonard comments in Salon:

A hotly contested presidential election hits the stretch run, a deadly foreign policy crisis breaks out in the Arab world, new census figures prove that the richest Americans are still gaining on everyone else… and yet one of the most alarming stories of the week (judging by my perhaps unbalanced Twitter feed) appears to be the news that Apple’s iPhone 5 will come with a brand new dock connector

What's the Difference Between Invention and Innovation?

The history of technology is replete with stories of companies that had a great idea but didnt know quite what to do with it.

Xerox PARC, the celebrated Silicon Valley-based R&D center is the most famous of these. Its staff and the creative genius they unleashed are legendary in the tech community, both for the brilliance of their inventions - and for the fact that others often benefited far more than did the parent company that paid for it.

There have been other fonts of innovation over the last century including RCA and Bell Labs. But the increasing prominence of Apple's SIRI has drawn attention to a once secretive company whose primary function is to win government contracts in order to help the US military realize its technological dreams.

SRI International, the company that spawned the idea that became SIRI has a distinguished provenance. SRI originally stood for Stanford Research Institute and was the university's research arm. It was eventually spun off in order to provide greater opportunity to become profitable and it has achieved that goal.

SIRI is emblematic of the company's focus on innovation rather than 'mere' invention. The notion is not so much to be the cleverest (though that doesnt hurt)or to come up with cool new stuff, but to be sure that whatever is being created is intended for a market that enables both SRI and its clients to secure a financial return while solving a problem that may enhance other commercial opportunities.

This focus on practical applicability has assured a steady stream of new business while financing ever more audacious experiments that lead to even newer and potentially profitable new fields. It is quite an innovative business model. JL

Dan Friedell reports in Fast Company:

SRI International, the brains behind Apple's Siri, has launched a dozen consumer products since its digital assistant got famous. We venture inside SRI's labs to find out why you haven't you heard of any of them.

Could Technology Kill the Asian Growth Miracle?

What goes around comes around.

China and many other locales in Asia have grown dramatically over the past three decades by providing the manufacturing platform for the western technology boom. Economies have grown, incomes have increased and the global commercial playing field has leveled more than a bit.

But as so often happens, the forces that unleashed this wondrous growth spasm could also be its undoing.

The Chinese are running out of people. As hard as that may be to believe, the increase in incomes across their economy decreases the incentives to move to the huge factories in coastal cities where much of the manufacturing takes place. Reports have already surfaced that Foxconn, chief supplier to Apple, Samsung and other tech companies, has been unable to hire enough workers so has pressed Chinese students to work in its factories involuntarily in order to meet demand for the debut of the latest iPhone.

What this means is that the Asian labor cost advantage is disappearing. Among the solutions is the replacement of workers with robots. Foxconn has stated it plans to install 1 million of them over the next few years.

In addition, as the following article points out, there is a cultural impediment to the sort of innovation that sparked the Silicon Valley/Route 128 revolution of the past few decades. Incremental change is valued more highly than radical change of the sort that sparked the internet era. Though China leads the world in patent applications, many of those are not globally protected, meaning that they are derivative or less impactful than those coming out of western countries. The solution of strong-arming western companies into surrendering intellectual property rights in return for access to the Chinese market is causing disquiet. In the meantime, businesses in the west have used this period to figure out how to prevail using technology to offset their labor cost disadvantage.

Ironically then, the very technological revolution that drove Asian growth may now be sapping its future prospects. JL

Izabella Kaminska comments in FT.com/Alphaville :

We’ve noted on more than one occasion that economists may be missing a trick when it comes to how technology is changing the global economy. More so, that developments like 3D printing, could even pose a black-swan risk for Asia in their own right.

Google and Dynamic Pricing: Patenting Your Propensity to Overpay

This 'dont be evil' thing turns out to be, well, pretty open to interpretation.

Lots of people overpay. Or feel that they do. Buyer's remorse is a common emotion. But it turns out that the propensity to overpay can be identified, managed and even predicted. To the point where Google has patented a means of doing so.

In our current socio-economic state, living by the Golden Rule about doing unto others or being your brother's keeper are about as popular as submitting to the dentist's drill without novocaine. We dont appear to have a lot of sympathy for anyone else. Could be due to our straitened economic circumstances. Or maybe a couple of generations of prosperity have just coarsened us. Whatever the reason, taking advantage of others appears to be considered a fair part of the bargain between buyer and seller.

This is particularly interesting in the internet context: Nigerian investment scams, Chinese IPOs and American political promises all vie for the consumers' attention. But actually patenting ways in which people can be targeted to overpay seems a mite predatory, even by today's morally flexible standards.

The advantage the net has had over tangible, retail commerce is its transparency, convenience and generally lower costs. They are mutually supportive and deeply interwoven. As soon as it is perceived that one of them has been undermined, the others may soon follow. JL

Timothy reports at SlashDot:

A newly-granted Google patent on Dynamic Pricing of Electronic Content describes how information gleaned from your search history and social networking activity can be used against you by providing tell-tale clues for your propensity to pay jacked-up prices to 'reconsume' electronic content, such as 'watching a video recording, reading an electronic book, playing a game, or listening to an audio recording.'

Rhetoric versus Revolution: Why Tablet Prices Need to Drop Below $100

'The revolution will not be televised.'

That was the name of a 1970 song and poem by Gil Scott-Heron. What he meant was that people could not be passive, sitting and waiting for change to come without their participation.

It is noteworthy in the context of Amazon's announcement of new tablets that directly challenge Apple's iPad - and of the annual circus surrounding the debut of whatever new device Apple is promoting this season. And it goes without saying that there is a small irony in the timing of such new product introductions to coincide - intentionally or not - with fashion week.

The point is that for the next communications revolution to begin, prices are going to have to drop below $100 so that usage becomes truly universal. At those levels, the mobile phone IS the computer in China and many other parts of the world. But for more robust exchanges of information that may actually become knowledge, and even wisdom, broader accessibility will be necessary. And that will only come with broader affordability.JL

Vivek Wadhwa comments in the Washington Post:

The high definition screens, faster processors, and enhanced Wi-Fi capabilities of Amazon’s new Kindle Fire tablets are making big news. The price of these devices is getting even more attention: $199 for the 7-inch and $499 for the top-of-the-line 8.9 inch 4G LTE-enabled models. Amazon will undoubtedly sell millions of these.

But I’m not excited.Here’s why: These tablets won’t catalyze the revolution that is waiting to happen. The magic will happen when the price-per-unit drops below $100 on its way towards $50

Twilight of the Elites? America After Meritocracy

Has America been failed by its elites?

Or more to the point, has it been failed by the system that has produced them for the past three quarters of a century?

That system emerged to replace historical reliance on caste and privilege. It was formulated to promote a feature of American life which appeared to be the fairest, most democratic and meritocratic: education. The presumption was that education favored no one who did not have talent, intelligence and the willingness to work to achieve excellence against a common set of standards.

The problem, as Professor Marshall Meyer of the Wharton School noted, is that 'metrics begin to degrade the moment they are announced because everyone affected begins to game them.'

And how.

Universal education may still be available, but there are circles within circles. Private schools, private tutors, legacy admissions to 'need-blind' competitive institutions, cultural biases in nationally-administered standardized tests. And that's just to get to the starting line. To be considered for the elite professions in finance, law, medicine, commerce and yes, even government. Beyond that, the benefits of distinguished lineage have been supplanted by the web of relationships based on school ties, friendships and common experiences.

The sense of entitlement may be all the more entrenched because those so annointed believe that their achievements were merited, not the random luck of bloodlines. As has become clear the system has been gamed and those who have the money or connections prevail.

The bigger problem, however, is the result. That nation is riven by factions who truly despise each other. The economy is faltering, the country's standing in the world has receded and faith in the future is at a low ebb. Cheating and self-dealing are rampant. Investors flee the equity markets because they are so notoriously tilted to favor insiders. Whatever leaders the system was supposed to have produced either did not heed the lessons taught or emerged due to factors other than ability.

So the question is what the post-meritocratic world will look like. Despite their evident disdain for each other, both the Tea Party and the Occupy Wall Street factions agree that the elite are out only for themselves. And the French, Chinese, Russians, British, et al, have done no better.

What we can say with some assurance, however, is that whatever new system may replace the old - and that is not even certain - a new elite will emerge. What we can hope is that, at least for a time, before they begin to favor their own kith and kin, that they take to heart the lessons from this experience and try to build a more inclusive and effective system than the one they will try to replace. JL

The Samuel Goldman comments in The American Conservative:

“Elite” wasn’t always a dirty word. Before the 19th century, the term described someone chosen for office. Because this typically occurred in the church, the word possessed distinctly ecclesiastical connotations. The pre-Victorians transformed a word imputing religious status to individual persons into a collective noun with class implications. By the 1830s, “elite” referred to the highest ranks of the nobility.

Those meanings are no longer primary.

How Google Builds Its Maps - and What That Means for the Future of Everything

Why would you bother?

That is the question that arises when one realizes the effort, the sheer scale of the enterprise required to create, update and improve Google Maps.

And no, the answer is not that they think maps are cool. Or that the company is public-spirited and just want to help people. Though both may be true.

The answer, to the extent that it can be sussed out, is that Google is locked in a Death Match with the world's largest, most iconic brand. Apple. To survive, let alone prevail, it needs to optimize the variables that allow it to compete effectively in the race to global tech dominance.

For Apple, those assets include design, hardware manufacture and the execution of strategy that arcs from conceptualization to delivery of products that dont just work well, but invent and then set the standard for entire classes of technology. And to those who think that is not so special, the graveyard of entrepreneurship and innovation is overflowing with companies who managed to do one, but not the other.

What Google does really well is identify, collect and manage information. Lots and lots of information. Organizing and applying that information in ways that consumer/citizens can use it to their advantage is their strength. The advent of mobility as a Truth of modern living has helped their cause because it means that knowing where one is, where one wants to go and what one may find along the way is not just useful, but a source of revenue and competitive advantage.

Arch-rival Apple has sensed the same tremor, which is why it is morphing iTunes into networks. Control may be an outmoded concept, but maximizing one's leverage is still an imperative.

So, when you casually start figuring out where your friends are or where they might want to be, based on what you tell them, remember the vast quantities of intelligence and strategic direction encapsulated in those thumb-strokes. In the misty future you - or your offspring - may even be driving cars or traveling on other modes powered by that knowledge. Assuming Google plays it right, it's going to be a long, happy journey. JL

Alexis Madrigal reports in The Atlantic:

The company opened up at a key moment in its evolution. The company began as an online search company that made money almost exclusively from selling ads based on what you were querying for.

But then the mobile world exploded. Where you're searching has become almost important as what you're searching. Google responded by creating an operating system, brand, and ecosystem in Android that has become the only significant rival to Apple's iOS.

Buying Access to Innovation: Corporations Invest in Start-Ups

Make versus buy.

That is one of the classic questions posed to first year MBA students. The notion is whether it is more cost-efficient and effective to invent and create something or to simply buy it from someone else, presumably a smaller, nimbler and more focused entrepreneurial business. But the analysis is not simple, because it entails assessment of myriad inputs and outcomes that contribute to value - many of them intangible and reputational: employee motivation, inculcating a culture of innovation, strategic choices, competitive implications.

Recently the trend has been to buy. Investors want returns now. Bonuses, stock options and job security depend on short-term performance. Companies claim that they dont 'get paid' for sponsoring research with a medium to long range outlook.

So they become 'strategic investors.' Which is investment-banker speak for someone who will overpay because it is easier to do that than to actually go to the trouble of thinking up and producing the product or service themselves.

We have seen the results most clearly in the pharmaceutical industry where the cost and marketing effort are so gargantuan it is believed that only new drugs with billion dollar or euro sales potential - or higher - are worth the effort. So the big pharma companies invest in little bio-tech start-ups (or their somewhat more developed older siblings)in order to grab some of that performance on what they consider to be the cheap.

So now its tech's turn. And the timing couldnt be better! Facebook killed the IPO market. VC investors are in the fetal position. So who decides it's the perfect moment to catch some of that ol' Silicon Valley magic? Why it's corporate America. They are sitting on piles of cash, too worried about the future to risk their executives' compensation on the uncertain outcome associated with actually investing in something productive themselves. So they are opening offices in the Bay Area, taking lunches and breakfasts and generally letting it be known that they have cash to burn for the right idea.

How will this turn out? History suggests this is a transitional movement. The global corporations can not buy enough innovation to really gain strategic advantage. But it does give them something to do until their belief in the future returns. JL

Evelyn Rusli reports in DealBook:

New York, London and Hong Kong are common addresses for blue-chip multinationals. Now Silicon Valley is, too.

From downtown San Francisco to Palo Alto, companies like American Express and Ford are opening offices and investing millions of dollars in local start-ups

Digitizing Dollars: If You Don't Like This Price, Wait a Minute. Literally.

For all of our highly caffeinated 24-7 affect, when it comes to shopping for many items, we remain in horse-and-buggy mode.

Occasional sales at certain times of the year for specific items. Essential commodities whose price changes barely register.

But technology and the winner-take-all mind set are bringing the casino mentality to the retail environment. Tracking software enables companies to monitor their competitors and adjust accordingly. Those with the ability and the desire to take the lead in this movement - like Amazon - may changes prices on the same item numerous times daily.

If it sounds like the trading floor of an investment firm, that's because it should. The algorithmically-driven pricing gives businesses better control of their sales, market share and margins.

Research suggests that this approach is not yet so casino-like that the house always wins. Consumers and sellers are evenly matched in terms of whether they are buying or selling on an uptick or down - so far. Companies believe they are coming out ahead not because they are taking advantage of their customers (heaven forfend!) but because the ability to better manage inventories and margins enhances cash flow, receivables, payables and a host of other variables that impact the bottom line.

Consumers have become inured to the price fluctuations in airline ticketing and though resentful, have not revolted. We can probably expect the same in retail prices - as long as the buyers continue to perceive that the system gives them a fair chance of benefiting. The exit of retail investors from the capital markets provides a useful primer on what happens when that sense of fairness dissipates. JL

Julia Angwin and Dana Mattioli report in the Wall Street Journal:

The fast-moving Internet pricing games used by airlines and hotels are now moving deeper into the most mundane nooks of the consumer economy.

Deploying a new generation of algorithms, retailers are changing the price of products from toilet paper to bicycles on an hour-by-hour and sometimes minute-by-minute basis.

Color War: Christian Louboutin Wins Appeal to Trademark Red Soled Shoes

Whew! Just in time for fashion week.

The eyes of the intellectual property community have been focused myopically on the seemingly endless Google-Samsung-Apple patent battles. Because that's where the big legal fees are, we hear you cynically intone.

But an equally interesting fight has been waged in the US Federal courts for the past year between two French design houses, Christian Louboutin and YSL (Yves St. Laurent). Louboutin claimed that he 'owned' the use of the color red on the soles of women's shoes. YSL disagreed.

To many mere mortals, the notion that anyone can own the use of a color seems a bit extreme. What's next, suing everyone with a green lawn who didnt pay for permission? But the court, in its wisdom, ruled that Louboutin has the right to use that color on shoe soles provided, Solomonically, that the uppers are a color other than red. Sounds a bit, well, persnickety to you?

Philistine! YSL won the right to use red soles as long as the uppers are red because it pioneered that particular 'look and feel.'

Which leads us to the larger point: that companies like Louboutin - and Apple - are fighting for greater restrictions on the use of intellectual property - patents, copyrights and trademarks - that fairly belong in the public domain. The whole point of intellectual property law is to protect the work of creative people and entrepreneurs who deserve the right to benefit from the work they have done in designing and building innovative products and services.

There are many who fear, however, that the increasingly restrictive applications of this concept will reduce the incentive to innovate while driving up prices.

We may well celebrate M. Louboutin's design sensibility and taste. But it is unlikely that many of us can afford his shoes. And the concern is that a growing string of such decisions may put large portions of the human spirit off limits. JL

Basil Katz reports in Reuters:

The bright red soles on French footwear designer Christian Louboutin's high-heeled shoes are so distinctive they deserve trademark protection, a U.S. appeals court has ruled.

Are Groups More Rational Than Individuals?

We have come to believe in the wisdom of crowds.

Even as technology and globalization have put ever more power and knowledge in the hands of the individual we mistrust his or her ability to act in their own rational self-interest.

But the results of additional research suggest that the outcomes are not so clear cut. That, in bowing to the great uncertainty of human endeavor, it depends.

This is, naturally, extremely frustrating to those who like their future secure and their facts irrefutable. The problem is that all that knowledge and power in the hands of more individuals has created greater instability because the additional information has led too many to confuse wattage for wisdom.

The dramatic growth of group-oriented enterprise, from social networks to crowd-funding venture capital has reinforced this bias.

So the larger question is how, when and why the differences occur. It is probably impossible to categorize all of the various instances in which these forces may come into play. The most logical approach is to understand that they exist and that presuming optimal - or sub-optimal - behavior is probably never a sure thing. JL

Timothy Taylor comments in his blog, The Conversable Economist:

A decision maker in an economics textbook is usually modeled as an individual whose decisions are not influenced by any other people, but of course, human decision-making in the real world is typically embedded in a social environment.

The Majority of New Jobs Pay Low Wages

Selling real estate to each other didnt work out too well.

And it looks like selling hamburgers to each other isnt going to be much better.

One of the reasons that the recession has lingered like a bad cold is that people who held what were once considered middle class jobs have not been able to replace them - or the income they earned working at them. But for those who are thinking that even low wage jobs are better than none because they are difficult to outsource, the invention of new robots to do simple tasks in China suggests that no work is safe.

The larger issue is what experts call 'de-skilling.' Instead of creating employment that capitalizes on the vaunted US educational system as well as the ingenuity and industriousness for which the US was once known, corporations appear to be using technology as a great leveler, shipping costs off to the lowest bidder. The problem with this strategy for consumer goods suppliers, as Henry Ford pointed out over a hundred years ago, is that if your workers can not afford your product, it is likely that many other consumers will not be able to afford them either. Furthermore, such de-skilling puts whatever economy pursues it at a disadvantage when it comes time to ramp up for future growth, whenever that prospect re-emerges.

The Chinese, Brazilians and other developing nations are trying to move up the value chain, while many American and European companies appear content to slide down it on the assumption that they are preserving strategic resources and choices by saving money when, in fact, they may be doing just the opposite.

Executive compensation structures may optimize that approach for current office holders. But it will not do so for their successors. JL

Catherine Rampell reports in the New York Times:

While a majority of jobs lost during the downturn were in the middle range of wages, a majority of those added during the recovery have been low paying, according to a new report from the National Employment Law Project.

The disappearance of midwage, midskill jobs is part of a longer-term trend that some refer to as a hollowing out of the work force

Why Today's Consumer Cares About Corporate Reputation

It used to be so easy.

Consumers did largely what they were told. Even when there was a choice, it was probably between two competing brands. And the way to get one's message across was similarly focused: one or two or three TV channels, a couple of newspapers, drive-time radio.

But then things got complicated. Better data allowed manufacturers and their marketers to profitably target ever smaller slices of humanity. And communications? Do you have to ask?

But eventually the costs of global competition limited pricing flexibility. Perhaps most significantly - and subversively - in a bid to save money and margins, companies began demanding that consumers do more work: figure out treacherous voicemail customer service trees, bag their own groceries, manage their own accounts online or elsewhere. And business derived some advantage from this originally. People were confused, or short on time or lazy, so they did what came easiest, which generally redounded to companies' benefit. Homo Sapiens, however, did not win the evolutionary battle by being stupid. They figured out how to make this new system work for them, or at least not so well against them.

One of the things they learned was the relationship between the brands they bought and the companies that owned them. And they began to figure out which brand conglomerations represented what they wanted and who they wanted to be. Suddenly, companies found themselves being judged on a whole range of attributes they didnt realize they had to have, let alone master. Ethics, environment, employee treatment. The list is as long as the internet allows it to be.

Consumers are not making these judgments solely on emotional bases. They get that mores and values and ethics impact the quality of the goods and services they purchase, the prices they pay, the speed of the wait times they must endure, the ease of interacting with the company that sold them whatever they bought. In other words, the stuff that matters to them and that will influence their purchase decisions. Because they get that attitudes and behaviors in one realm probably reflect those in many others.

And since corporations have fought for the controversial right to be recognized as 'individuals' under law, consumers want to be treated like individuals by them. Corporations demanded that consumers take more responsibility for themselves. So they have. Even though it's not really clear to anyone what they were getting in return. But people want to know - and everyone is watching. JL

Richard Warnica and Tim Shufelt report in Canadian Business:

The commercial has no products, no voice-over, no sign at all of what’s being sold. Just images of athletes and their mothers. A quick flash of brands follows—Tide, Pampers, Gillette, Duracell—then a slogan: “P&G, proud sponsor of moms.”

Procter & Gamble’s “Thank you, Mom” campaign, rolled out at the London Olympics, is the most ambitious in its history. It’s also part of a growing trend that sees parent companies promoting their overall corporate brands rather than just those of products.

Can Electronics Stores Survive?

Labor Day has evolved over the years from a day of rest to a day of sales. Back to school, end of summer clearance, pre-Christmas.

Humans love to shop and they love gadgets. It is - or was - a match made for marketing. Some of the earliest innovations in consumer hard goods marketing came out of this industry. EJ Korvette, Kresge and Sears. Then came the major discounters like Crazy Eddie. His prices were insane, as the ads screamed, but so was the business. And it soon demonstrated just how much, by going bankrupt.

The ease of ecommerce - comparing, buying, returning when dissatisfied - has taken the rest of the pizzazz out of going to the store. So the retail industry - with its penchant for strip malls as well as the jobs and state and local tax payments that go with them - is powering down.

The initial counter-strategy was large screen TVs. Too bad virtually everyone had the same idea, prices plummeted, margins evaporated and everyone who wanted one, got one. Plan B? Mobile phones. And, what a surprise, everyone glommed on to that notion as well. Mere humans generally need only one, prices are consistent with a band of options, packages likewise and so much for that.

There may, eventually, be a market for used devices but Amazon is already on top of that one. GameStop grabbed first mover advantage with its iPhone resale concept, but the same dynamics apply: how many of the things do we really need, or where need is not part of the equation, want?

We suspect humans will always want to shop with other humans around. The concept of the market is as ancient as civilization. Surveys continue to report that shopping is the most popular form of entertainment in many societies. But the evolution must continue. Costs must come down. Real estate prices and taxes must moderate. Reliance on the auto must be supplemented. We love to look - but we also love convenience. There's a market opportunity in there for someone. JL

Ann Zimmerman reports in the Wall Street Journal:

Is there a future for electronics specialty stores? Not long ago, retailers such as Best Buy Co., GameStop Corp. and RadioShack Corp. were outmuscling competitors across America by offering one-stop shopping for the latest televisions, computers, videogames and gadgets.

Now all three are fighting to survive. The rise of online competitors like Amazon.com Inc. that offer low prices and downloadable products have siphoned customers and sales from these once-powerful retailers

Price of Essentials Rises 10%

The price of grains and other food essentials rose 10% in July alone.

The impact of drought, El Nino and other weather events conspired to add to the already soaring prices driven by increased demand from developing nations. Year on year increases, again in July, totaled 6%.

The confluence of forces driving this trend are not mysterious. The global demand pressures have been evident for some time. And experts have been calculating the potential drought affect for months. What has caught many by surprise is the speed and volume of the increases. Expectations had focused on the future, not on the present.

What makes that matter more urgent is that this heightened cost of living comes against a backdrop of stagnant economic growth, relatively high unemployment and an uncertain future. People already struggling to pay their bills are now confronted with even greater challenges.

This is an economic, environmental, political and managerial issue. There does not appear to be a global consensus on solutions, or even on approaches. The historic support for alleviation of poverty has disintegrated in the face of financial pressure from business interests, diplomatic tensions and uncertainty about the efficacy of common agendas. Attempts are resolution will have to wait until after the US Presidential elections in November. The direction the world's largest economy may take could dictate the nature of the response. Even with that, should a full-fledged food crisis emerge with resultant unrest and political ramifications it is not clear what the global community is prepared to do given the diametrically opposed agendas of the competing interests. JL

Tom Bawden reports in the Independent:

The G20 is under growing pressure to call an emergency food summit after the price of essentials jumped by ten per cent on average in July.

Patience is Passe: Disney Is Spending Millions to Reduce Resort Ride Wait Times

As the summer vacation season draws to a close, some of its major beneficiaries are taking stock of what they have learned. And it is confirming what legions of retailers have experienced the hard way: convenience rules.

Mobile phones and the mindset they have engendered are shortening consumers already hair-trigger tempers. No one wants to wait. For anything. But especially not in the hot sun of an amusement park with bored kids in tow.

Disney had pioneered the science of crowd management. It understood that to make more money it had to move more people through more experiences more quickly. Entertainment, sales, looping lines and a host of other innovations remade the entertainment industry approach to coddling customers.

It turns out that was the easy stuff, the proverbial low-hanging fruit of reducing consumer frustration. It has now brought in the engineers with stop watches to identify cuts of a few seconds which, when added up over the course of a few days spent at one of the company's parks, can result in hours redeployed to more enjoyable pursuits.

This is not just the obsessive-compulsive behavior of a famously detail-oriented enterprise. People's ability to design and manage their own experiences via computer and mobile phone may well be reducing their tolerance for for anything they perceive as less than optimal. It may not be fair, or reasonable, or even realistic, but at the margins Disney and others are gathering, they can not afford to be complacent. Disruptive innovation is a couple of buttons away. JL

The Palm Beach Post reports :

As with all magic, it's what you don't see that pulls off the trick.

Food, Water Shortages Could Force Global Vegetarianism. Seriously

In approximately 30 years - one generation from now - the world population will reach 9 billion. And according to scientific estimates there may not be enough water or food to feed ll of them. Especially if everyone wants to keep eating meat.

The result may be enforced vegetarianism. Not because of some ideologue's vision or demand, but because that may be the only way for people to feed themselves.

The reason is that animals require lots of water both to live - and to be processed into food. Shortages due to climate change and increased human demand will reduce the amount available, so choices will have to be made.

There are those who will recoil in horror at the notion that anyone would impose dietary restrictions on them. We join those who are relieved that there are scientists, economists, statisticians and planners actually thinking about these things so that humanity can prepare for alternatives should the worst - or the best - come to pass. JL

John Vidal reports in the Guardian:

Leading water scientists have issued one of the sternest warnings yet about global food supplies, saying that the world's population may have to switch almost completely to a vegetarian diet over the next 40 years to avoid catastrophic shortages.

Man Bites Dog: Chinese Businesses Filing IP Lawsuits

Well, what do you know?

A company starts creating intellectual property and before you know it, someone starts ripping it off, so they decide to protect it. What a concept.

The Chinese, recently (in)famous for most gratuitously disregarding other people's patents, trademarks and copyrights, have found religion when it comes to intellectual property. And as so many conversions on the proverbial road to Damascus (or Dalian) are wont to have done, this one was inspired by self-interest. Namely, that as the Chinese increasingly believe they can compete on the global stage, they understand that protecting whatever value they are creating is essential to realizing future returns.

The world's largest country has long intended to evolve from a 'brawn' nation to a 'brain' nation. It was the messy details of how they were going to get there that remained unclear. But as Apple, Google, IBM, Facebook and a host of other tech companies - many co-founded by Chinese ex-patriots - have demonstrated, intangible ideas may matter more than tangible manufacturing plants.

And Chinese companies understood all too well the urgency of that protection regimen, because the most fearsome violators of their IP were their own countrymen. Having grown up fast in a tough neighborhood, Chinese companies are now working the system to protect the value they are creating. To do so, they are being pro-active in two ways; defending what they have actually created, and artfully using the IP laws to challenge others' IP rights in China and elsewhere to try to gain competitive advantage. Or, at the very least, a settlement that gives them access to something that might be useful.

No foreign business hoping to enter the Chinese market can expect to do so without trading some of their knowledge for the privilege of access. But the larger lesson is that as in so many other corners of the economic sphere, the Chinese have learned how to extract value by learning from the example of others. JL

Jia Lynn Yang reports in the Washington Post:

U.S. companies have long accused the Chinese of stealing their intellectual property. But now some in China are pointing the finger back.