Thursday, December 29, 2011
Saturday night before you indulge in some champagne and caviar, here is a luxury market update for both treats that you might find interesting.
The Chinese are coming!
Have you noticed the recent spike in champagne prices? For some of the more popular brands, I have noticed double-digit increases. The production in Reims, the leading champagne region in France is currently capped at 330 million bottles. Their production costs have skyrocketed due to the increased cost of grapes and land, because most of the major brands do not own vineyards, thus buy their grapes from independent growers. More importantly, due to the growing demand for bubbly amongst emerging countries like Brazil, Russia, India and especially China, global supply is now under extreme pressure. The bad news is Moet Hennessy which markets some of my favorite labels (e.g., Veuve Clicquot Yellow Label, Veuve Clicquot Rosé, etc.) is on limited allocation. The good news is they recently partnered with a Chinese company to build a vineyard in northwest China.
On the flipside, caviar despite its luxury status, is maintaining its current market prices. Why? For starters caviar is not a brand name. Did you know that fish eggs other than sturgeon pass for caviar? Furthermore, the Russians and Iranians who cornered black caviar made exclusively from Caspian sturgeon, are being challenged by sturgeon fish farms located in Finland, Spain, the United Arab Emirates and of course China. Google revealed that there are no reliable caviar stats. Production apparently peaked at 550 tons in the 70’s all from wild sturgeon populations which are now an endangered species due to pollution, dam building along the Volga River and poaching. Farm production currently estimated at 250 tons is expected to triple in the next decade.
Bottomline: At the end of the year, higher champagne prices will be offset by lower caviar prices for future New Year’s Eves.
(a.k.a. Happy New Year!)
Wednesday, December 21, 2011
“Before apps, when there were attention spans, before “I’ve got five bars,” when bars were for boozing, before ring-tone selection, when the phone rang, before high-net-worth individuals, when love was all you needed, before hype, when there was Hendrix, we got by just the same.” - Roger Cohen (Globalist)
Yesterday I was reminded of the above passage in an op-ed written by Roger Cohen titled Change or Perish. I was on my way to a meeting. It was around 10:15 AM and I spotted a line at least twenty deep outside the Apple Store. The scene validated for me how app crazed we have become.
Fact: The American Dialect Society named “app” the word of the year for 2010 thanks to its popularity. Apps is the abbreviation for application, a piece of specially programmed software that helps us navigate the world and makes our lives more manageable (time). Apps can run on the Internet, our computer, our smartphone, our tablet or other electronic devices like connected TV’s, the next major platform for app growth. Every time a product is developed for a different gizmo, thanks to each platform requiring a different code from developers, it counts as an app. Consequently, Mobilewalla reported that the one millionth app went to market in the beginning of December. Back in May, Apple indicated that 37 percent of their approved 500,000 apps were free and estimated that their paid apps had an average selling price of $3.64. Android operating systems have their own set of apps. Mobilewalla estimated they released over 500 a day earlier this month. 9 out the top 10 paid apps for the iPhone at the Apple store are games; Tetris® and Angry Birds are at the top of the list. The number one grossing app is MLB.com designed for Major League Baseball fans. Facebook, Skype and the Weather Channel are free. Pages is a powerful, useful app for your mobile device that helps organize your documents/reading materials. You can use your Starbucks app (either on your iPhone or Android) to locate the closest Starbucks, pay for your favorite Starbucks drink, then use your smartphone to scan an in-store QR code to watch a video about their Caffe Verona blend, check in on Foursquare in case there are some friends nearby, before you tap your free Epicurious app when you sit down to plan your upcoming dinner party, etc. etc. etc.
At this point there is an app or an app in development for everything except the missing app, the personal touch. Remember handwritten thank you notes, birthday cards or better yet Christmas cards. When was the last time you celled up a really close friend to have a lengthy, one-on-one conversation to catch-up versus posting your latest activity on Facebook? When was the last time you interfaced with the checkout individual at your local supermarket or even the barista at your regular Starbucks? When was the last time you interfaced with a bank teller? Do you know your neighbors names? Disclaimer: I am an urban dweller. I cannot even remember the last time someone got into the elevator in my building, we said hello to each other, exited the elevator and engaged in the lobby, face-to-face for a few minutes.
Have you lost your personal touch?
Tuesday, December 13, 2011
A great new word I learned this year: Zeitgeist – the general, moral and cultural climate that defines an era.
1. Mobile – smartphones, tablets, etc.
7. Fast Foods (e.g., McDonald’s, KFC, Pizza Hut, etc.)
8. Big Box Retailers (e.g., Walmart, Target, etc.)
9. Sports – arenas, team clothing (e.g., jerseys, hats, etc.), fantasy leagues, ESPN, ESPN2, ESPN3, etc.
10. Celebrities – Lady Gaga, Charlie Sheen, rehab, etc.
11. Reality TV shows
12. Harry Potter
13. Jeans, sneakers and flip flops
14. Earthquakes – Mother Nature, the Financial World
15. BRIC (Brazil, Russia, India, China)
16. Sound bytes – Twitter, text messaging, YouTube
18. Millionaires to Billionaires
19. Exotic travel (e.g., Antarctica)
20. Forever Young (e.g., Botox, plastic surgery, etc.)
Welcome to Zeitgeist.
Friday, December 2, 2011
American writer/poet/art collector Gertrude Stein (February 3, 1874 – July 27, 1946) once said, “Everybody gets so much information all day long that they lose their common sense." Sometimes I wonder how Gertrude Stein would have dealt with the information age and TMI (Too Much Information).
In 2005, according to The Economist magazine, mankind produced 150 exabytes of data. This year they project we will create 1,200 exabytes of data. As a Business Catalyst in the food industry, I must stay ahead of the curve as it relates to industry news (e.g., mergers & acquisitions, bankruptcies, etc.), food trends (e.g., flavors, gastronomic, etc.), supply chain news, consumer trends, etc. Throw into the mix the new world of social media and now mobile marketing. At times I think my brain is going to explode!
Daily I am challenged to decipher the overwhelming avalanche of information. Thanks to an intercept marketing project I am currently working on, I have been studying best practices for QR codes. I am bullish about QR codes. They are still in their infancy, but slowly evolving into the mainstream and being utilized primarily by marketers seeking to instantly engage with their consumers – immediate link to a mobile site, customized content, video, etc. QR codes also facilitate tracking measurement.
Recently I read about Coca-Cola’s first QR code campaign. They have partnered with The World Wildlife Foundation to leverage their polar bear holiday mascot to raise money to protect the bear’s Arctic habitat. Immediately I started processing that with Coca-Cola now entering the game, along with some of the Big Box retailers, Starbucks, to name a few, 2012 will be a breakout year for QR codes. Before I had a chance to finish the article, I was notified of a new comment on my LinkedIn QR code post, an article about NFC (Near Field Communications) titled 2012 Will Be The Year NFC Breaks Big—Just Not U.S. In short, NFC is a new scanning payment technology that will also engage consumers. Argh! TMI; I logged out.
So how does one deal with TMI? Here are three helpful tips:
· Identify information aggregators. Follow the right people on Twitter that tweet relevant content. Engage in LinkedIn discussion groups that post relevant content daily. Identify the people in your inner circle who are active online and solicit their help to feed you relevant content.
· Identify online resources that post relevant information in fields of interest. Alltop, the “online magazine rack” of the web, is a great place to start.
· Walk. That is right. Walk from your computer when you think you have reached the point of saturation. Remember humans are not wired to handle exabytes. That is why we have computers.
Be candid, are you experiencing TMI? Don’t lose your common sense!
Tuesday, November 22, 2011
As I prepare to travel up to New York tomorrow, I was reminded of some memorable Thanksgiving family dinner scenes captured in film.
· Home for the Holidays – Directed by Jodie Foster. Great cast; Holly Hunter, Robert Downey Jr., Anne Bancroft, Charles Durning and Dylan McDermott.
· Scent of a Woman – Al Pacino – Whoo-ah!
· Pieces of April – A punk, played by Katie Holmes, invites her suburban family into NYC for Thanksgiving dinner. She even sets her table with little paper turkeys.
· Avalon – Lou Jacobi’s classic line as he walked in late for his family’s Thanksgiving dinner: “You cut the turkey without me!”
· Planes, Trains & Automobiles – Steve Martin and John Candy. A John Hughes classic!
What are your favorite Thanksgiving film scenes? Happy Thanksgiving everyone!
Friday, November 18, 2011
Earlier this week, I shared the results of a major survey that indicated Americans want to take advantage of the health benefits of food. Conversely, the Centers for Disease Control and Prevention reports that 33.8% of all U.S. adults and 17% of our children are obese. America’s Eating Conundrum Part II.
There is an overabundance of articles postulating why America is fat. Some advocates blame food companies like Kraft, Kellogg’s, Coca Cola, McDonald’s to name a few, for bombarding us with their advertising. As a result, we have become wired, thus desire sugary and fatty foods. Others point their fingers at our schools for not menuing enough healthy options (blame it on budget cuts) given our children are eating one to two meals plus a snack per day at school. Psychologists attribute obesity to societal forces; our increasingly hectic and stressful lifestyles inhibit our ability to make the healthy choices all the time. Then there is the “Big Two” theory, reduced exercise and increased food consumption. Bottomline, Americans are ingesting more and more calories than they are burning.
I decided to google to find out the number of calories the average American consumes per day – 2,700. I also found out some other interesting statistics about our average annual eating consumption detailed below:
· French Fries – 29 lbs./year
· Pizza – 23 lbs./year
· Ice cream – 24 lbs./per year
· Soda – 53 gallons/per year
I am proud of my industry, foodservice, for stepping up to the plate in the fight against obesity by offering more healthful choices. Unfortunately, according to a Technomic report, only 23% of consumers polled are most likely to pick healthful foods when eating out. Again I circle back to the psychologists who attribute obesity to societal forces. Do we eat out for convenience thanks to time deprivation, our busy lifestyles? This much I do know. According to data released by the National Bureau of Economic Research, obesity and obesity-related illness currently costs the US nearly $170 billion a year. Some health official are projecting this dollar amount will more than double to $344 billion by 2018.
So what is it America, are we going to eat foods that are healthy or are we going to continue to eat unhealthy. Sounds like an Eating Conundrum to me.
Tuesday, November 15, 2011
The International Food Information Council’s (IFIC) survey indicates that Americans want to take advantage of the health benefits of food. However, approximately one third of all adults in U.S. are obese, trending to 50 per cent by 2030. It seems like we are experiencing an eating conundrum.
Today’s post is the first in a two part series about America’s Eating Conundrum. I would like to address the IFIC survey.
Earlier in the year, IFIC conducted an online survey among one thousand randomly selected adults to measure America’s knowledge about the health benefits of functional foods (foods and food components) that provide benefits beyond basic nutrition. In addition, the IFIC wanted to learn whether these foods are part of the respondent’s diet. Detailed below are some interesting findings:
· A majority of U.S. consumers are confident they have control over their health, 67% “a great amount” and 28 % “a moderate amount.” No surprise, the leading factors that play “a great role” in maintaining and improving overall health were food and nutrition (73%), exercise (63%) and family health history (39%).
· 87% of the respondents agreed that certain foods have benefits beyond basic nutrition, 90% can name at least one food. When asked unaided, Fruits/Vegetables topped the list of functional foods (70%). Fish/Fish Oils came in second (18%).
· Good news! 9 out of 10 people (up from just under 8 in the last IFIC survey) can name as least one food and its associated health benefits (e.g., omega-3 fatty acids for reduced risk of heart disease).
· Respondents indicated that they struggle to incorporate key food components into their diets with the top three barriers to more frequent consumption being: expense, taste and availability.
Candidly, I struggle with the last bullet point. When it comes to eating healthy, I firmly believe it is ultimately an individual decision. Expense, taste and availability should not present any barriers here in America, the land of the plentiful. Conversely, if you want to eat unhealthy, there are no barriers here in America, the epicenter of Fast Foods. Consequently, somehow based on the current obesity statistics, the topic of my next post, apparently Americans make unhealthy choices.
Are you eating healthy?
Friday, November 11, 2011
Black Friday is two weeks away, a day that retailers will be monitoring closely to measure holiday sales during our tentative economy. Will consumers continue to be frugal, cut back and buckle down this holiday season? Not according to the Cheesecake Barometer.
Leading consumer psychologists and marketing academics indicate that shoppers eventually get tired of exhibiting self-control all the time despite less discretionary income. Eventually they break down and indulge, but will pare back on household staples. Recent retail sales validate their hypothesis. The items that are selling are not high priced, but are considered fun, like cosmetics, premixed cocktails and coolers, wine, handbags, etc., Products associated with household chores are on a downward trend – fertilizer, weed killers, bleach, car wax, shoe polish to name a few.
Thomson Reuters reported that sales for U.S. chain stores rose 3.4% in October compared to October 2010 for the 22 retailers they track. These sales were less than what Wall Street analysts were projecting (4.5%) and the 5.1% recorded in September. However one area of indulgence that exhibited strong retail sales is what I title the “accessorize/makeover category.” Consumers, especially female consumers, might not be able to go out and buy a new outfit, but they can enhance their existing wardrobe by buying a new, expensive handbag or a pair of shoes. Then there are cosmetic accessories which jumped 22 percent in the last year according to the Chicago market research company, the Symphony IRI Group. They also reported that sales of body scrubbers increased 21 percent and nail polish 10 percent. Estée Lauder recently announced that their North America division recorded its strongest business results in a decade. Their major competitor L’Oréal reported their first half profits for 2011 were up 12 percent.
So by now you are probably wondering what the Cheesecake Barometer is. Earlier I stated that consumer physiologists are telling us we cannot be good all the time. We need to treat ourselves and satisfy our urges. What could be better than a slice of cheesecake? Approximately 700 plus calories for a basic slice; 1,326 calories if you visit your local Cheesecake Factory and order a slice of their Adam’s Peanut Butter Cup Fudge Ripple cheesecake. Yes, Symphony IRI also reported that in the past year sales of cheesecakes have risen 22 percent. Thanks to the Cheesecake Barometer, it appears we are going to experience strong holiday sales.
Will you be treating yourself to a slice of cheesecake on Black Friday?
Thursday, October 27, 2011
I grew up in New York City high rises. Outside of a handful of neighbors, I hardly ever talked to anyone when I was riding the elevator. Now everyone asks me: “What is your elevator speech?”
I first heard the term “elevator speech” a few years ago when I attended an organized speed networking event. It was explained to me that I needed to be able to describe to someone what I did professionally in thirty to sixty seconds, the length of an average elevator ride. When I researched the origins of the term, I traced it back to a 2007 article written by executive coach Aileen Pincus, The Perfect (Elevator )Pitch. “One of the most important things for a businessperson is to deliver a quick, succinct summation of what their company makes or does that excites others. The “Elevator Pitch” should be a fundamental skill.”
I have lost count how many times I have delivered my “elevator speech” at networking events, conferences, over the phone to people with whom I am connecting via LinkedIn, etc. All I know is I now sound like a fast talking politician. Today I am not going to bore you with my elevator speech, but this much I do know. Not once has anyone ever asked me a follow-up question after I delivered my stump speech. I always use the phrase “assist food manufacturers strategically” in the hope that someone would inquire what that entails, but nothing ever follows. Consequently I have asked myself do people really care. Has the term, what is your elevator speech become another business cliché? Do people really care, but it would take too many nanoseconds to understand the depth of one’s professional achievement. This leads me to wonder what is next? How can we further fine tune our elevator speeches? Maybe an elevator ride is too long. How about limiting everything to the ultimate sound byte, 140 characters or less?
Do you have a business tweet?
Friday, October 21, 2011
Today marks the three year anniversary of SMARTKETING Reflections. I would like to take time out to thank all my readers for your continual interest. My goal in Year IV is to plan less, experiment more.
Candidly, I still consider myself a blogging novice. The spine of my postings is to provide relevant content about current trends as it relates to society, consumerism and marketing. Even though I try to plan out the flow of my content, I am continuously experimenting. However, in the process I have learned that blogging is a great way to stay connected with everyone throughout the year.
In closing, your collective feedback has been great. I truly value it. Consequently I am still learning, still experimenting and realize I have a ways to go, but I am definitely having fun. Share the fun. Thank you. I anticipate your continued readership.
Tuesday, October 18, 2011
Computer algorithms are now being developed to provide analytics that help city officials develop proactive versus reactive solutions for a programmed emergency. Welcome to the era of Smart Cities.
One of the first Smart Cities is Rio de Janeiro. The city began working with I.B.M. back in 2007 to establish an Intelligent Operations Center to predict the outcome of a major crisis like heavy thunderstorms. Data, historical and current, will analyze potential power outages, flooding, mudslides, etc., as well as project the availability of hospital beds, shelters, emergency workers, etc. This center, scheduled to open later this year, integrates 20 departments, from civil defense to traffic, that will be ready to assist in the day-to-day operational efficiency of the city.
I.B.M.’s Global Pubic Sector unit now has approximately 2,000 smarter cities projects in the works. It is projected that the total market opportunity for developing Smart Cities will be worth $34 billion this year and grow at an annual rate of 18.3 percent to $57 billion by 2014. New York City is a smart city and is working with I.B.M. to collect and share real time data for its fire department. Rotterdam has installed smart sensors in their levees to monitor conditions (e.g., water pressure, temperature, etc.) around the clock to minimize or even prevent flooding. Another company that is involved in working with city governments in a wide array of technology is Cisco. They offer a program called Community+ Exchange which streamlines planning and management at the community level. One of their major clients here in the states is San Antonio where law enforcement officials now have the ability to share real time information so their personnel can act more quickly.
With more anticipated natural catastrophes on the horizon, like earthquakes and resulting tsunamis, or even a terrorist event, there is an accelerated movement by city governments to develop Smart City environments. Are you living in a Smart City?
Thursday, October 13, 2011
Last year Nestlé won SMARTKETING’s first Gretzky award for skating to where the puck is going to be. This year’s winner of the Gretzky award is Russian technology guru Yuri Milner.
Yuri Milner is not a household name despite the fact that this year he made the Forbes Rich List, thanks to an estimated net worth of $1 billion. He has orchestrated his tech spotting from Moscow which is not exactly Silicon Valley when it comes to innovative economic ideas. Mr. Milner was an early investor in Facebook, sinking $200 million into the company for less than a two percent share back in 2009 when everyone thought he was crazy. He also predicted that both Zynga the gaming company and Groupon the daily deals site had great potential.
Recently at an economic conference conducted in Ukraine attended by the “best and brightest” in business discussing global economics and political malpractice, Yuri Milner provided a totally different, optimistic spin about the most pressing issue on Planet Earth – the technology revolution which in his view is just at the starting gate. Detailed below are the most significant changes he predicts we will witness:
• The Internet revolution is the fastest, most accelerated economic change humans have experienced. Today two billion people are online; Mr. Milner predicts the number will double over the next decade.
• Mr. Milner emphasizes that more information is being created than ever before. Specifically more information was created every 48 hours in 2010 as was created between the dawn of time and 2003. By 2020 the same volume of information will be generated every 60 minutes.
• People are sharing this information more frequently. In 2006, 50 billion emails were sent; 300 billion by 2010. Shared content on Facebook will increase from 140 million messages in 2009 to over four billion this year. Mr. Milner points out that the largest newspaper in the United States only reaches 1 percent of the population compared to Internet media platforms being used by 25 percent of the population daily and growing.
• Mr. Milner envisions the “Internet of Things” and the emergence of the global brain. “The Internet is not just about connecting people, it is also about connecting machines. Five billion devices are now connected, by 2020, 20 billion will be connected. The future connectivity/interaction between humans and machines will create an intelligence that will not belong to any single human being or computer.”
Yuri Milner has lived through and experienced major changes in the “offline” world. The collapse of his home country the Soviet Union, the “Great Recession”, the Arab Spring and now the potential for the collapse of the euro. However, based on his cyberspace track record and future predictions, he is continuing to demonstrate that he is skating to where the puck is going to be, the technology revolution. Yuri Milner, congratulations, you are SMARTKETING’s choice for its 2011 Gretzky award.
Friday, October 7, 2011
I do not profess to be a World Traveler, but this much I do know. Right now, there are few more beautiful places to visit than the Storm King Art Center located in the lower Hudson Valley in New York. Why? Long range planning.
The Storm King Art Center was founded by the co-owners of the Star Expansion Company, Ralph E. Ogden and his son-in-law H. Peter Stern. The company which specializes in metal fasteners and drills relocated from Bayonne, New Jersey to its current location in Mountainville, New York. In 1958, Ogden bought a 180-acre estate in the area through a family foundation. Concerned about the damage construction of the New York Thruway inflicted on the region’s landscape, Ogden began buying up surrounding land and then in 1960 with H. Peter Stern they opened a non-profit art center to the public. Their initial vision was to exhibit paintings by the Hudson River School. However, one year later they decided to make the art center a sculpture garden, harmonizing the rustic beauty of the landscape with sculpture from prominent artists – David Smith, Henry Moore, Alexander Calder, Mark di Suvero, etc. This year marks the 50th anniversary of the Storm King Art Center. Thanks to a well managed foundation, it continues to grow and evolve in terms of acreage, landscaping and sculpture. Long range planning at its best.
Now I do recognize, long-range planning has become difficult thanks to our turbulent economy and the fast pace evolution of globalization. For most businesses, long-term planning is now conducted on either a quarterly or annual basis. A two year plan has become a rarity these days. However, there still is one element of business that takes long range planning – branding. Starbucks, Nike, Apple, etc. all great examples of relatively modern brands, each had a long range plan when it came to branding, a subject I addressed last year in a post titled Brand Stamps about Cirque de Soleil. Brands are built one customer at a time, one day at a time, one week at a time, etc., but still reflect an original vision that was part of a long range plan.
I would like to take timeout to thank Ralph E. Ogden, H. Peter Stern and the Storm King Art Center for teaching me the beauty of long range planning.
Thursday, September 22, 2011
Social media is all about the conversation/engagement thanks to collaborative Web 2.0 tools. Consequently, social media gurus now advise us to find key individuals that have influence over potential buyers. They call it Influence Marketing. I call it Roach Baiting 2.0.
I first learned about roach bait marketing back in 2003 when I read Buzz: Harness the Power of Influence and Create Demand – Salzman, Matathia and O’Reilly. They provided numerous case studies where agencies implemented undercover marketing movements by hiring actors/actresses, models or socially adept people to hype their clients’ products in targeted locations. Clever? Only if you do not get busted! A classic example was when Sony Ericsson hired actors/actresses in major cities to launch their new T68i cell phone that had the capability to take, send and receive pictures. In NYC, posed as tourists, they approached people in Times Square and asked them to take their pictures. Unfortunately Sony Ericsson went public with their campaign. The press had a field day bashing their strategy. One publication even reminded Sony Ericsson that Che Guevara once wrote: “A guerrilla campaign can only be effective if it is a clandestine operation and has the support of the people where it is being conducted.”
Fast forward to 2011. A great story staring Peter Shankman. His Twitter profile reads: My life: Consulting, angel investing, advising, speaking. Founded HARO. Ironman. I'm told I'm knowledgeable about social media.
Last month Peter boards an early morning flight from Newark to Tampa for a lunch meeting. On his return flight, Peter, a steak lover, fan of Morton’s steakhouse jokingly tweets: Hey @Mortons – can you meet me at Newark airport with a porterhouse when I land in two hours? K, thanks :-) Morton’s Hackensack (23.5 miles away from the Newark airport) answered the challenge and showed up with his order. Peter was shocked and started a tweeting tsunami. He got home and posted the story on his blog complete with pictures of his meal and his cat enjoying some small bites of porterhouse steak. How many cat lovers retweeted Peter’s picture of NASA the Wonder Cat? A great move by Morton’s? Absolutely! Especially since they were online listening and realized that Peter and NASA the Wonder Cat had a huge following on Twitter (100,000 plus followers). Welcome to the new world of Roach Baiting 2.0.
In closing, Morton’s if you are listening, I will be celebrating a special anniversary on October 23rd here in Philadelphia.
Sunday, September 11, 2011
LinkedIn has afforded me the opportunity to expand the scope of my network. Consequently, I have met and connected with people who are refreshingly entrepreneurial in their thinking. One individual is the Founder of Beer2Buds.com, Libby Tucker.
“If I had to guess, social commerce is the next area to really blow up.”
– Mark Zuckerberg (Facebook).
I am not sure when the founder of Facebook made this comment, but after a quick review of the numbers, I realize social commerce is in the midst of a boom. Analysts are projecting social couponing will reach $3.5 billion by 2012, virtual goods $2.5 billion by 2013 and mobile couponing spending $6.5 billion by 2103. A unique social commerce business in the foodservice industry is Beer2Buds.com which is now active in 21 US cities. Beer2Buds.com is even available in three European cities as well as three South American locations. It is real simple, you select an amount of beer money by using a credit card or PayPal, load up your friend’s contact information complete with a note. Your friend then receives a message via email or text linked to a Drink Your Beer page where they receive their drink card which they can either print or save on their smartphone to redeem at a participating restaurant or bar. Oh yes, don’t forget your ID.
I recently caught up with Libby Tucker, the founder of this innovative concept.
How did you conceive the idea of Beer2Buds?
Back in 2001 when I was working in Milwaukee, I received an email from my Swedish friend Mattias whom I met when I studied abroad. It was a short note to say he missed our time together with a picture of a beer. Instantly I had a very powerful memory of all the great times and laughs Mattias and I shared, usually over a few beers. I thought, wouldn’t it be cool if we recaptured those memories even if we were thousands of miles apart! What if, for his birthday or his wedding later in the year, I could send him a beer to say congratulations or just to say remember when. That’s how the concept for Beer2Buds was born.
What have been some of the biggest challenges you have faced as you grow your company?
Great question! Too many! Regulations come to the top of the list, since alcohol laws vary by state. It is even more complicated overseas since there are additional currency and money laundering regulations. Funding is always a challenge. We have operated over the years on a bootstrap budget which sometimes impedes our progress of scaling up. We also have some well funded competitors which always make life interesting. There have been some technical challenges too, but I do not want to bore you.
Who were big influences for you?
My grandfather was a huge influence. Even though he passed away when I was only six months old, his legacy has pushed me to both adventure and entrepreneurship. In business it has been two technology pioneers, Paul Graham and Steve Blank.
Switching reels – I know you like to travel. When did you first catch the travel bug?
When I was 20 years old I went to study abroad in Spain. I immediately felt I had found my true calling, travel. I fell in love with learning new languages, new cultures and realized that real learning came from experiencing life. Less influential and less of an impact are books and classrooms. Then I came back to the States, worked in International Marketing before making the transition into the computer world. That is when I realized with the advent of the Internet, specifically eCommerce, I could begin to travel again, experience more languages and cultures, visit my friends and build a business at the same time. My passion is to evolve into The Anywhere Professional, the title of my blog.
Wednesday, September 7, 2011
The summer is behind us. The good news is our government avoided default. The bad news is the stock market continues its rollercoaster ride. Today’s query: Are we still in an economic funk? Evidently not for the privileged affluent.
High end shoppers are spending again. The luxury category has posted 10 consecutive months of sales increases versus a year ago. Analysts indicate that the rich are not spending at the same level as they were before the recession, but close. This group could lead our economic recovery – the top five percent of income earners account for close to one-third spending, the top twenty close to sixty percent of spending. July was an exceptionally good month for luxury spending, consequently exhibiting the largest gain in a year, +11.6%. It helped that Mercedes-Benz reported they sold more cars in the U.S. in the month than it had in any previous July in five years.
What is driving luxury sales? The leader of one luxury retailer labeled it the “snob factor.” Higher prices are considered a mark of quality. SpendingPulse also reported recently that there has been a significant decline in the number of promotions in the luxury sector. People are paying full price again versus at the peak of the recession. Luxury consumers also are willing to pay for something that exhibits individualism, one-of-a-kind and rare.
So what vogue items are the privileged affluent buying besides a new S-Class Mercedes-Benz sedan?
• Christian Louboutin “Bianca” pumps @ $775 a pair. Neiman Marcus reported they sold out almost every size. A bargain given Jimmy Choo is advertising in their back to Autumn/Winter 11 collection Enfield, leopard print pony boots for $1,495.
• How about a Gucci coat selling for approximately $12,000 at Bergdorf Goodman. While you are at Bergdorf Goodman, why not pick up a 16 ounce container of Crème da la Mer (facial cream) for $1,650.
• A Louis Vuitton Nomade leather work bag for your laptop @ $3,825.
• $250 Ermenegildo Zenga ties.
• Top off your shopping spree by stopping at New York’s Wall Street Burger Shop for chef Kevin O’Connell’s 10 ounces of Kobe beef, foie gras, exotic mushrooms, cave-aged Gruyère cheese, with truffle mayonnaise (mixed with some gold flakes) on a brioche bun with a sprinkle of gold on top. $175. Tasty. Priceless.
My last query of the day: Does a dribble of mayonnaise spot a $250 tie any differently than a $10 tie bought on sale at Macy’s?
Friday, September 2, 2011
Summer is rapidly coming to a close. Students are heading back to their classrooms armed. That is correct, armed as in surgically attached to their mobile devices, tablets and laptops. Welcome to the New Classroom where digital literacy will enhance education.
At first educators were skeptical about allowing students to use their gizmos in class – a multi-tasking distraction where they could check text messages, emails, shop online, etc. Now, a new breed of educators is beginning to recognize that if utilized properly, technology can enhance their students’ overall educational experience. Smart move given some of the statistics that have been gathered:
• 98% of college students own a digital device; 38% indicate they cannot go 10 minutes without using a digital device.
• 75% of students claim they wouldn’t be able to study without technology.
• 91% use email to connect with their teachers; 8% use social sites.
So what are some of the different ways technology will be utilized this fall in the New Classroom, specifically as it relates to social media?
For starters, teachers from K-12 (primary and secondary schools) to universities are establishing classroom “backchannels” – real-time digital streams that enhance student engagement. By utilizing Twitter or other microblogging platforms, teachers have found a greater level of participation (e.g., information sharing, questions, etc.) among students, especially those that are normally reticent. Some universities have developed their own backchannel system. One example is Purdue University’s Hotseat which has proven very effective for large lecture halls.
Some schools this year will be replacing their static websites with a Facebook page or are encouraging students to use YouTube to publish their work. Teachers have learned that with careful planning and by encouraging students to post material online, they are witnessing a higher caliber of work. In addition, student/peer collaboration has been enhanced. Unfortunately numerous federal regulations still keep social networking sites off-limits. The American Library Association believes long-term, social media restrictions will constrain education. They advocate librarians and teachers need to educate minors digital literacy, how best to participate online responsibly, ethically and safely.
Welcome to the New Classroom. I am confident that the U.S. Department of Education will sort out all the pros and cons of digital education and reach a middle ground. However, I am beginning to wonder that as we experience the continual evolution of technology, are we going to witness the demise of brick and mortar classrooms.
What do you think?
Thursday, August 25, 2011
Earlier this year Nielsen predicted that by the end of 2011 there will be more smartphones than non-smartphones. Watch out, mobile hardware manufacturers, software vendors and carriers are about to create what I title a Mobile Vuvuzela.
We are currently experiencing a mobile revolution. Numerous factors are driving the revolution – faster mobile Internet speeds, improved browsing, a highly competitive market, etc. Two that pique my interest are apps and social media. Both will contribute to what I title Mobile Vuvuzela. Let me share some facts:
Apple surpassed their 10 billionth download in February and now has over 425,000 apps. Google’s Android has over 200,000 apps. At a touch of an app, we can check out whatever we want in a nanosecond – the weather, our personal checking account, a restaurant review, sports trivia, a recipe for Saturday’s dinner party. Does the local Target have any Waterford Crystal in stock to buy for a friend’s wedding in two weeks? Don’t forget to tap the Zappos app to shop for a new pair of shoes for the wedding.
Why stop? You are on a roll. Check your updates on Facebook. It is estimated that 200 million of the 750 million plus people on Facebook access via their smartphone. How about Twitter? It is estimated that approximately half of the people tweeting do it from their smartphone. So tweet a friend to hookup at your favorite local Tapas bar tonight for dinner since you know that when you get there, check-in on Foursquare, you will become the restaurant’s Mayor and receive a free pitcher of sangria. Timeout, you might as well check out your LinkedIn updates before you go to the bathroom, then jump into the shower and get ready for work. I think this would be a good time to throw in a bathroom stat. According to a recent AIS Media survey, 27% of Americans report using mobile devices to check Facebook while in the bathroom. Maybe you decided to pass on Facebook, read the latest issue of Wired and used your phone to scan the QR code on the Ford ad.
Post shower, your friend tweets you back: k dinner great @ 7, movie 2? That is when the confusion sets in. There are two multiplex theaters and one art film house, a total of twenty-four film choices within proximity of the restaurant. What is a good movie to see? Should you read films reviews, check out your friends' likes on Facebook, tweet a friend, etc. Stop: Marvin Gaye’s "What’s Going On" your customize ringtone fills the airwaves.
Welcome to the world of Mobile Vuvuzela.
Thursday, August 18, 2011
Blink:I am not surprised by the number of articles now surfacing detailing social media fatigue. A recent global survey conducted by Gartner revealed that 24% of the respondents now use their preferred social media sites less. Opinion: Too much noise. Solution: Curation!
Twitter recently announced that they host 200 million tweets a day. There are more than 750 million active Facebook users – 50% usually log on in any given day. Nielsen BlogPulse reported earlier in the year that there are over 156 million public blogs. Bottomline: Social content is growing exponentially as I write this post. Social media leader, Steve Rubel, EVP at Edelman believes we are beginning to witness a shift in web dynamics. We are now entering the Validation Era which is all about acquiring appropriate content or interactions. Consequently we need content curators, people or tools to filter and aggregate content which personally resonates for us.
One social curation tool which is receiving all the buzz lately is Google+ Circles launched at the end of June with a limited, invitation-only beta. You can organize your real-life social connections to share or follow relevant content, everything from family chitchat to favorite wines. Will Google+ give Facebook a run for its money? Time will tell. Articles are already surfacing that early Google+ adapters are ditching Facebook. Experian conducted a study that indicated the fastest growing demographic on the network are “Kids and Cabernet” – affluent people living in suburbia with children. They account for 29% of all visits to Google+, a relatively small number, but this same group only accounts for 0.7% of all Facebook visits. However, I predict Google+ will soon get too big and become a social media platform comparable to Facebook. Consequently some people will seek out smaller, more specialized social curation networks. Here are three tools I recommend that facilitate social curation:
- Paper.li – Helps organize content to read like a newspaper shared with followers on a daily basis.
- BagTheWeb – You create a virtual bag to collect, publish and share content on a specific topic. In the process you create a network of bags.
- Pearltrees – A social curation community where you build a network solely on things you like, known as pearls, with other people. This site also helps organize, share and discover what you have already curated on Facebook and Twitter.
Monday, August 1, 2011
We are experiencing a mobile revolution. Nielsen now projects that half the mobile universe will own a smartphone by the end of the year. One implication: sellers will be able to connect with buyers that have an ephemeral need. Welcome to the new world of “people commerce.”
I am certain that most of you reading this post have experienced eBay or Craigslist, two services that created a marketplace for buyers and sellers. The difference with “people commerce” is that it’s mobile, location based and all about real time availability. People connect regarding goods and services that normally do not have a marketplace because they are valued differently. A good example is parking. Earlier in the year, two San Franciscans introduced Park Circa. Owners register their parking space, availability and asking price. Buyers who are driving into San Francisco can use their smartphones to locate a space that meet their immediate needs. Travel is going to be a natural for “people commerce”. Airbnb, 9flats Roomarama, etc. are relatively new companies that connect people who are willing to rent a spare room or even a tree house to adventurous travelers on the move who are looking to save a few dollars plus gain insight on how local residents live. One company that has been receiving a lot of ink is Zaarly which was launched at SXSW in Austin in May. Partly funded by Ashton Kutcher, the app enables buyers to enter their need which Zaarly broadcasts via Twitter to line up potential sellers. Buyers can then connect and negotiate with sellers via an anonymous party-line or a face to face rendezvous. So think about it, when iPad 3 is finally introduced, what would you be willing to pay a seller who has been camping out for days at the Apple Store for his or her space?
Oh by the way, I understand the heat wave is going to continue here in Philadelphia this week. I am looking for a backyard with a pool and a Weber cooker for a two day rental.
Wednesday, July 20, 2011
Thanks to the Internet, marketers are now conducting archeological digs known as social profiling to get closer to their customers.
This is an exciting time to be a marketer. For starters, there is the daily challenge of keeping up with the evolving world of social media. Now, due to the collective intelligence gathered by search outlets and the rise in social network management tools, targeting potential customers is morphing. Demographics, the statistical characteristics of a population (e.g., gender, age, race, education, income, etc.) will no longer have the former relevancy as marketers determine their target market. Instead, marketers are beginning to examine multiple data points known as psychographics.
One critical component of psychographics is social profile data, the information gathered from the numerous social networks we navigate. Tools have been developed to fine tune a consumers’ preferences. Instead of being dropped into the classic demographic bucket of a Mom, age 25-34, college education with a household income of $75k, marketers now overlay psychographic information. New data points: personal interests (e.g., running, yoga, sewing), monthly online purchasing behavior, social class based on purchase behavior (e.g., cars, travel, food & beverage), etc. Sounds confusing? Now throw into the mix how the data can be mined to predict a customer’s lifecycle. Using the above Mom example, marketers will know the exact ages of her children so they can connect when she is ready to buy something like a Nod chair for her three year old or diapers for her two month old baby. Marketers now utilize algorithms to build a closer understanding, better relationship with their customers.
Key Implication: Fragmentation is now the norm. Consequently marketers will need to develop multiple positioning statements. A good example would be cars. Some consumers will view a luxury car for prestige and status, while other potential buyers will buy the car strictly for its interior space for comfort. Social profiling tools will help marketers reach their finite targets.
Can you identify your social profile?
Monday, July 11, 2011
Summer is here; time to launch another annual summer series under the umbrella theme of What’s Next USA? Today I will start by addressing Virtual Stores. Future posts are as follows:
- Social Profiling
- People Commerce
- FB Alternatives
- Mobile Vuvuleza
- The New Classroom
Back in June, I indicated I am bullish about QR codes. They are a great hybrid marketing tool – intercept marketing (a proven classic marketing strategy) combined with a Web 2.0 collaborative tool. Tesco, headquartered in the United Kingdom, the third largest retailer (revenue wise) globally after Walmart and Carrefour clearly demonstrates my point with the creation of their virtual stores in Korea. Their research revealed Koreans are the second hardest workers in the world. Consequently, finding time to shop for groceries is an arduous task for most Koreans. Tesco, known as Home Plus in Korea decided to recreate the look of their stores by posting large, life size replicas of their food aisles in subway stations complete with QR codes. All commuters have to do is scan the items they want with their smartphones, a grocery shopping cart is created; the items are then shipped immediately to their homes. Great concept!
Are virtual stores on the USA horizon?
Thursday, June 30, 2011
I would like to take timeout to wish everyone a great holiday weekend, but more importantly enjoy your De-Tech Time.
In the past, I have posted on the subject that Americans work longer hours than workers in most other developed countries, thus we have evolved into a “No Vacation Nation.” Now, the Center for American Progress is documenting, not only do we work longer hours per week than elsewhere in the developed world, but we have fewer laws to support working families (e.g., paid maternity leave). Consequently, we are experiencing work-family conflict. Throw into this conflict the amount of time families are wired (internet and mobile usage), I advocate it is De-Tech Time. Let me share with you some amazing statistics that I have read in the past six months:
• Nearly 60 percent of American families with children have two or more computers according to the Pew Research Center’s Internet & American Life Project. More than 60 percent of these families have either a wired or wireless network. A third of Americans log on from home multiple times per day, twice the number that logged on back in 2004.
• According to the latest Kaiser Family Foundation Study, today’s youth pack in 10 hours and 45 minutes worth of media per day (TV, music/audio, computer, video games, etc.).
• The Pew Research Center’s Internet & American Life Project also reported that more than four out of five teens sleep with their mobile phones. Makes sense given the latest Nielsen data: the average teen text messages 3,339 times per month – females 4,050; males 2,539.
• The number of adults using a social networking site has doubled since 2008 – 59% of internet users. No surprise, Facebook dominates the SNS space; on an average day 15% of FB users update their own status, 22% comment on another’s post or status and 26%”like” another users content.
• It was reported in the latest comSource survey that the average American internet user watches 30 minutes of video online per day (a 40 percent increase over 2009) in addition to five hours of television.
I declare it is De-Tech Time. Unplug your computers, power off your mobile phones, go outdoors, fire up your grills and have a bang-up Fourth of July.
Monday, June 27, 2011
Quick response, a.k.a. QR codes – fad or trend?
QR codes are rectangular codes that enable smartphone equipped consumers with the proper scanning applications to instantly receive information that has been encoded/decoded. They are slowly evolving into the mainstream and being utilized primarily by marketers seeking to instantly engage with their consumers – immediate link to a mobile site, customized content, video, etc. In addition to outbound messaging, QR codes facilitate tracking measurement.
I am real bullish about QR codes. Why? They are an excellent hybrid marketing tool – intercept marketing (a proven classic marketing strategy) combined with a Web 2.0 collaborative tool that facilitates engagement. Thanks to a project I am currently working on, I have been researching the current utilization of QR codes. When I discuss their unlimited potential, I have been challenged by my peers who believe they are a passing fad. Consequently, I would like to document why I think QR codes will become an integral part of marketing moving forward, a great touch point for both B2C or B2B marketers to engage and get closer to their customers. Rationale:
1. We are in the midst of a learning curve as it relates to QR codes. I apologize for being candid. I deem that the early adapters have misfired in their execution. One major example; too many companies have placed codes without any support copy (call to action) like scan here to get your free widget. As we become more familiar and marketers become more knowledgeable, everyone will know what to do when they spot the funny little rectangular codes.
2. Nielsen projects that half of the mobile phone user population will own a smartphone by the end of the year. More importantly, early smartphone users experienced some confusion about what scanners to download based on their equipment. A majority of the new models already come with a scanner app built in.
3. Google recently reported that 79 percent of smartphone owners use their phones while shopping (product and pricing information) with 90 percent resulting in a purchase or store visitation. In response, Retailers are placing QR codes in their stores to facilitate the shopping experience and provide a platform for engagement.
As most of my readership knows, I am a specialist in the foodservice channel. Restaurant operators utilizing QR codes as a promotional tactic will be a given – couponing, free samples, sweepstakes, etc. I get excited about other future applications – videos that communicate the source of the operator’s food or beverage (e.g., sustainable fish, fair trade coffee, etc.), recommended wine or beer pairings, exhibition cooking of a special dish, etc.
The utilization of QR codes will vary by industry. Once marketers work out the kinks and consumers/buyers become familiar with what they are, QR codes will be a great hybrid marketing tool. 2012 will be the year of the QR code.
Are you ready to scan with me?
Tuesday, June 21, 2011
LinkedIn, the first major U.S. social networking site to hold an IPO (May 19th), expanded its U.S. user base 6.7 percent in May to 33.4 million. As I have indicated in pervious posts, I am a huge fan of LinkedIn. However, lately I am definitely witnessing the 90:9:1 principle.
LinkedIn now reports to have more than 100 million registered users worldwide. The last time I wrote about the site, I indicated that great networks are not built overnight and emphasized the need for commitment. I participate on LinkedIn on a regular basis for myself, as well as for a client. This past month, I even took on a new LI challenge and began a discussion group. Nevertheless, thanks to the amount of time I spend on the site, specifically in numerous discussion groups, it has become evident that there is participation inequality, better known in internet culture as the 90:9:1 principle. The term first surfaced in 2006. Simply stated; 1% of people create content, 9% edit or modify that content and 90% view the content without contribution.
As a LinkedIn advocate, I am both a content creator and modifier. More importantly, I am committed. Three factors motivate me:
1.) Thanks to LinkedIn, in addition to engaging and staying connected with people from my pre-Web 2.0 network, I have connected with new people that I most probably would have never met through my Tribe’s limited circle.
2.) LinkedIn is a great site to aggregate information. Over a year ago I learned about QR codes, a new venture I am embarking on, the subject of my next post.
3.) I am very bullish about the future of LinkedIn, now that it has a war chest (cash). It will continue to grow and improve, thus facilitate for me the opportunity to create a virtual enterprise. A virtual enterprise is a network of independent individuals or companies, linked by technology that will share skills, costs and access to one another’s networks/markets. Thanks to their collaborative synergy, they will organize and work together on a for or non-profit objective (e.g., launch a new product or service, a social movement, political campaign, etc.). Once the goal is achieved, the virtual enterprise dissolves. Since the virtual enterprise is more often than not improvised, it can succeed without formally incorporating or establishing a traditional brick & mortar company.
What is your level of participation on LinkedIn?
Thursday, June 16, 2011
National Martini Day.
Foodimentary is a great source for humorous food and drink facts. It was conceived by John-Bryan Hopkins who has received two Twitter Shorty awards (over 370 thousand followers). I use the site regularly to aggregate fun content for my numerous social media platforms. Thanks to Foodimentary, I learned that Sunday, June 19th is National Martini Day, definitely my favorite holiday.
Chilled Grey Goose, dry straight up
Shaken not stirred
Too many produces the hiccups
What is your favorite holiday?
Tuesday, June 7, 2011
Are you making plans to celebrate International Yarn Bombing Day Saturday? Yes, “yarn bombing”, sometimes called grandma graffiti, has now evolved into a global phenomenon. I prefer to call it Graffiti 2.0.
Street art and graffiti have always been considered male dominated. These types of public markings have existed since ancient times, but became more prominent thanks to the utilization of spray paint and marking pens as contemporary tools. Now “yarn bombing” has surfaced, more feminine in nature – it combines the craft of knitting and nurturing (wrapping something up that is cold in a warm blanket) to the urban streetscape. Nothing is being spared; bus stops, street signs, fountains, fire hydrants, bike racks, etc. Here in Philadelphia, a “yarn bomber” stitched a fuchsia-colored vest on the famous Rocky statue in front of the Philadelphia Museum with the words “Go See the Art” since most tourists visiting my city, only stop at the museum to take a snap of the fictional boxer.
The mother of “yarn bombers” is a Texan, Magda Sayeg who began bombing in 2005. She recalls a slow day at her Houston boutique, thus knitted a cozy for her shop’s door handle. Next she knitted a leg warmer for a stop sign at the end of her street. Before long she was commissioned to do larger pieces. Last year she was paid $20,000 to knit a Christmas sweater for a Toyota Prius promotional video. This past March, she bombed the tree trunks at the Blanton Museum of Art in Austin. However, grandma graffiti really gained its popularity when two knitters from Vancouver, Canada published their manifesto: “Yarn Bombing: The Art of Crochet and Knit Graffiti.” The book doubles as a coffee table art book complete with colorful photographs of creative bombings and a tutorial with tips like wearing “ninja” black to avoid capture. The authors now claim they receive dozen of e-mails a week from “yarn bombers” operating in Russia, the Middle East, London, Paris, Sydney, etc.
So now the bar has been raised. A Canadian knitter declared on Facebook that June 11th is International Yard Bombing Day. We are going to witness a global event Saturday where grandma graffiti artists (I predict both female and male) will take to the streets in their “ninja” outfits armed with needles and yarn. On Sunday morning, I plan to walk the streets of Philadelphia with my camera to document the beginning of a new movement, Graffiti 2.0.
Wednesday, June 1, 2011
Blink:Recently I had a craving for fish, thus went to Philadelphia’s leading gourmet food store. The farm raised salmon @ $24.99 per pound looked great. When I asked the individual behind the counter where the salmon came from, I received a puzzled look. Where does our fish come from?
Read On:Fish facts:
- The average American eats approximately 16 pounds of fish and shellfish per year.
- 84 percent of seafood eaten in the U.S. is imported, only 2% is inspected.
What are the economic incentives for seafood fraud? For starters it is a way to imitate a more expensive product to avoid tariffs on a particular species – you purchased Mahi Mahi, but you received Yellowtail. Other forms of labeling fraud is short weighing where excess breading, ice or salt water are added so you end up buying a smaller quantity of fish than labeled. According to the 2010 National Conference of Weights and Measures, 40 percent of the weight of many seafood products is actually ice and not fish. The real downside to seafood fraud is it opens the door for illegal species to enter the market. Remember, seafood is a high risk food that requires proper handling and refrigeration. The substitution of illegal species can lead to a broader range of unknown contaminants.
What is the solution? Currently, the FDA just began using a risk based, sequencing DNA bar coding computer system. However, they only screen 50 percent of seafood imports. What about the other 50 percent? To me it sounds like we should get UPS involved in our fish supply chain. They could set up a fish tracking database that tracks down every piece of fish like a UPS package from its source of origin.
So now back to my fish tale. I decided to pass on the salmon, returned to my neighborhood and bought a nice slice of swordfish at my local market @ $9.99 per pound – wild caught, never frozen, imported from Panama. Or was it Mako Shark? Damn, I will never know.
Wednesday, May 18, 2011
I was not surprised when I read that Technomic Inc. reported their findings of a new survey that indicated consumers are wary of higher food prices and smaller portions. Specifically, 50 percent noticed smaller supermarket portions. Consequently, I decided to draft my own shrinkage list.
I will begin with items I bought recently at the supermarket:
• Milano cookies from Pepperidge Farm on sale for $2.49. No wonder, there were only two sleeves instead of the normal three.
• A can of coffee to pair with the cookies. Opened it to find out it was only three quarters- full.
• Loaves of bread.
• The size of English muffins.
• Salad bags.
• Soap bars.
• The length of a college school year.
• Vacation time.
• Travel agents.
• The size of airplane seats.
• Smart Cars.
• Gasoline station attendants (the only place I have encountered them this past year were NJ and Oregon).
• Independents – book stores, restaurants, pharmacies, shoe repair stores, etc.
• Daily newspapers.
• Paper towels in restrooms.
• Christmas cards.
• Birthday cards.
Do you have any shrinkage items you would like to add to the above list?
Saturday, May 14, 2011
Recent headline: Jobs Data Brighten U.S. Economic Outlook. The Labor Department reported 244,000 jobs were added in April, above expectations given March’s gain (221,000), but unemployment crept up to 9.0% from 8.8%. I am confused, especially when I examine the disparity in corporate compensation (a.k.a. The Wide Gap).
Occupants of the corner offices are rolling in dough again. After experiencing shrinkage during the recession, according to a study of 200 major companies conducted for the New York Times by a compensation consulting firm, the median pay for the top executives was $9.6 million. This represents a 12 percent increase over 2009 for chief executives. Actually, U.S. businesses are swimming in cash which I first addressed in my January post Shift Happens. In the fourth quarter of 2010 profits were up 29.2 percent, the fastest growth in 60 years – U.S. businesses reported profit at an annual rate of $1.68 trillion.
Consequently why the paradox? The recovery has not trickled down. Unemployment remains high and those that are gainfully employed are still struggling to hang on to their homes and jobs. Recent efforts under the Dodd-Frank financial regulations that empower shareholders has done little to curtail top executive compensation. Leading analysts doubt we will witness any major changes in the near future during proxy season as long as the market continues to perform.
I understand that executives of the corner offices assume the burden of responsibility for making their company successful for their employees, shareholders, customers, suppliers, etc. However, recently I learned that the IPS (Institute for Policy Studies) reported that leading corporations pay their top executives 300 plus times more than what the average American earns. I remember reading Peter Drucker, the father of modern management science indicating that companies should not compensate at more than 20 to 25 times what their workers receive. He believed that widening the gap beyond that would make it difficult to foster the teamwork needed to make a company successful. A controversial stance, but he firmly believed corporate leaders should do what is right for their enterprise first, not for their shareholders alone, and certainly not for themselves. To quote Drucker: “When CEOs pocket huge sums while laying off workers, that kind of action is morally unforgiveable.”
The reality is executive pay packages are soaring and we will continue to experience the Wide Gap. This morning’s query: If we were to put a ceiling on the corner office compensation, say 50 times, twice the rate Drucker proposed, how many more jobs could efficiently be added into the system? What do you think?