Blame the Technology and Australia


Continuing my search into what happened at Whitcoulls and Borders and  generally what’s going on with New Zealand retailers I am finding no surprises, which is a real worry. Two words come up a lot. Technology and Australia. I know a little of both. I live for technology and have trained many retailers over the years (including some who were already millionaires) and while the technology has changed, the principles haven’t. More on this to come.

Australia and New Zealand

As to Australia. In the 90′s many Australasian retailers who had New Zealand operated subsidiary chains based in New Zealand, decided to do away with local country management, local buyers etc.  and to save lots of money by treating their NZ shops as Australian branches. I guess they considered New Zealand as a slightly bigger Tasmania. Not huge, but worth having, especially if they didn’t put much effort into senior staffing  resources.

When performance decreased they blamed the economy, they said that NZ was just an over inflated state and it was always going to be that way, which was how they justified reducing local resources in the first place. The fact is while we may have a lot in common, we are not the same. We are made up of different cultures and history and have subtle differences in our lifestyles. Subtle enough that you can’t treat NZ stores the same as Australian stores and expect the same result.

Similar scenarios happened in many cases with the decades of American Globalisation. It’s funny really that America wanted to change Japan and the rest of Asia Pacific while Japan wanted to change the west. I well remember having discussions with senior management of Casio in Tokyo and Hamura about improving the software on their cash registers. One of the issues was that they hadn’t allowed for people pressing buttons in the wrong sequence. Have you ever been in a retail store when the ECR (Cash Register) is bleeping loud noises no matter what buttons are pushed and the stress it caused the cashier? Their initial response was “They must use the ECR in the right way or you should find better customers”. We ended up beta testing their software in NZ and Australia first and then getting Japan to tweak their software. That was one of the initiatives that helped us get 70% market share in the ECR market in NZ and helped Casio increase theirs around the world. But then of course the company I worked for was sold and I along with my boss and several other great people were made redundant despite the fact that we were doing really well, but because they thought we were earning too much. I’d love to know what their market share is in NZ now. I know it isn’t 70%. Anyway I’m going off on a tangent.

The big thing I noticed in the NZ stores was inventory management. They were carrying a lot of books that I wouldn’t think anyone would buy other than as a joke. I went back to Borders a week ago to jot some of the names down, but it looks like they went in the $1, $2, $5 sale and were gone. They had many dated books especially computing which must have been in store for several years, technical books on how to use software that almost no one has used in the last 5 years.

From what I’ve been told, someone automated the purchasing software to replace books that had sold, so for example if a particular book sold really well, say 5,000 copies, the system would replace with another 5,000 copies. Well there goes the profit from the first lot.

One of the things that makes New Zealand different is our ethnic communities. All over New Zealand, but particularly in Auckland we have clusters of ethnic communities; Chinese, Korean, South African, Indian, Pacific Islanders and more. Brands who fail to take that into consideration waste massive levels of stock by having the wrong product in the wrong locations, which then becomes shop soiled and potentially unsaleable.

Inventory needs to be managed locally by category managers who understand and are at the leading edge of their category and who understand their local market. They need to know weekly what is going on and understand who their customers are and what they are buying. Some books date more quickly than others and need to be moved on quickly, others will hold their value longer, but will still have a rapid half life.

In my previous blog about Whitcoulls and Borders I wrote about how they could follow the example of Amazon and know what their individual repeat customers were buying and therefore their interests and could recommend books to them. Amazon continue to prove that people in NZ will buy based on recommendations along the lines of “You bought these 3 books, other people who bought the same books also enjoyed the following titles”. Not only do we often buy them, but we also pay massive freight costs to get them here, at the same time as local book retailers are discounting stock that people aren’t buying. How smart is that?

One good way of dealing with this is using Business Analytics or Business Intelligence tools such as BIonaMAP, soon to be launched by New Zealand geospatial solution provider, GeoSmart. Fortunately for retail chains, this product will support both Australia and New Zealand, so users can have visibility over both countries.

BIonaMAP

Whitcoulls and Borders


I was thrilled to learn that the remaining Whitcoulls and Borders have been sold to Anne and David Norman. Now they have some hope. They will now live in the Pascoes Group and of course this group are known as having revived the ailing Farmers chain and given them new life.

Once the essential housekeeping details are sorted, such as property leases and staff contracts, there is every reason to hope that they will breathe new life into Borders and Whitcoulls.

That can not mean BAU or Business As Usual, because even though they did OK and the biggest problems were in Australia with REDGroup. Nevertheless these stores were not run optimally and they were not run with the times.

I heard people, partly lead by local publishers, saying that if the NZ stores were run from Australia, they would probably signal the demise of the NZ author. Certainly I agree that we would have seen less Kiwi authors in store, but I think ultimately either the publishers would have to become less greedy and insular or the local authors would start to embrace the new eBook media and of course in doing so they can either self publish or join Amazon or other local eBook publishers. Neither are ideal for people who love books.

As I’ve said in many previous blogs about Whitcoulls and Borders, a few of them can be found here, the first thing is to go back to basics. For these stores to be successful they need to operate smarter and provide what the modern shopper wants. There are many good examples overseas.

With the chain expanding, here a some ideas that I would look at.

  • Macy's

    Gift Registry. Chains like Macy’s in the USA have had phenomenal success with their national gift registry programs for decades. They have kiosks in store which are linked nationally. I was so excited the first time I went through one I almost bought a gift for a young man’s Bar Mitsva in Chicago. I was in New York at the time looking for a hat in one of the coldest winters I have ever experienced. It was so well laid out, there were thousands of special events from weddings to anniversaries and being national, you could see from New York, what a person in Madison Wisconsin had their hopes on. Given that the chain owns Farmers and a number of jewellery stores, this would be a great opportunity to combine the lot.

  • I keep harping on about Jeff Jarvis’ book What Would Google Do? It’s funny in a way that in one of his first blogs about the book, he suggests that you could buy it from Borders. The thing was though that I couldn’t buy it from Borders at the time because they didn’t have it, so I bought it from Amazon.
  • So I think that Borders and Whitcoulls need to start saying, what would Amazon do. So many companies are naive and believe their own hype that web retailers (only part of what they are) are no threat, or they consider them such a threat that when things go bad, they become a self fulfilling prophecy.

Hanging a few Kobo’s on the wall is not the answer, that has been a major botch up in my humble opinion. Even on the web, sell the sizzle on the home page! But some things they could do with their ‘loyalty’ programs is monitor what each customer buys and make recommendations based on the buyer habits. I have bought at least a dozen books on Amazon’s recommendations. Amazon is also much cheaper than buying locally, but that’s a different story because it costs a lot to get books to New Zealand, so unless you buy a stack of books, you pay back what you save on freight.

Amazon has many great features that can be just asdestination events

Mobile Marketing easily applied to a bricks and mortar chain, which has the benefit of being able to hold a book, tell you what store it is in and provide you with much quicker gratification.

I don’t want to write a book, but here a some things you may find in this blog in the coming days for Whitcoulls and Borders:

  • Becoming a destination for events such as readings and signings
  • Back to basics and way beyond in inventory management
  • A major web presence with lots of ideas perhaps sparked by What Would Google Do (which should be a mandatory read for all Whitcoulls and Borders management at all levels)
  • A new way for both stores to have lots of stock available, but not necessarily on the spot. A central warehouse with the option of home delivery could cut down inventory sizes without sacrificing range and depth.
  • Embrace proximity based marketing on mobile devices. I would strongly recommend that management from Borders, Whitcoulls, Farmers and in fact all retail chains attend the Mobile Marketing Forum in Auckland this June. This Forum could be called The Retailer Strikes Back. They will learn many new ideas at this event.
  • Understand their regional customer base. There is no point in carrying the same stock range in each store. It simply won’t work and you will have aged stock going on sale. Some of the category managers need to take a long hard look at the books they have been stocking and ask themselves what on earth possessed them to make some of the decisions they made? Or was it the publishers reps that conned them?
  • They should look at products like GeoSmart’s impending Business Intelligence on a MAP. This could produce many aha moments when used to geographically view their business results in combination with consumer demographics.
I could go on but that’s plenty for now. I think with the right motivation and attitude, these two stores can be not only revived, but will rise to new heights. But only if they stop living in the past of this is the way we always did it. They need to embrace and perhaps even lead the future. It’s not hard, its just thinking outside the square and remembering that it is the customers and the books that make your business. Its about the words and the stories and people.

The Future of TV


I was watching a TED Video recently. Unfortunately I can’t remember who was talking, but a couple of statistics resonated. The speaker said that by the time an American student (in most western countries probably the same) gets to university they will have spent 20,000 hours watching TV and another 10,000 hours playing video games.

What’s really amazing about that is generally (especially this time of year) how crappy TV coverage is. I have written in blogs previously that I believe IP TV is going to change things massively, but of course that will spell the demise of TV as we know it unless broadcasters get on the bandwagon. If they don’t, they will be singing the same song and laying off loads of staff in the same way as the music and newspaper industries are.

One thing that will make a difference is interactivity and in NZ we are way behind on that score, although I did note during the T20 Cricket match between Pakistan and New Zealand on Boxing Day on Sky TV, you could vote for your man of the match via your remote control. Normally you have to text and pay a premium, so that’s a start, but NZ is way behind the 8-ball when it comes to TV interaction.

In the December issue of The Futurist John M Smart of Acceleration Future Studies came up with some insightful comments on where TV will go, which should be compulsory reading to broadcasters.

Interactivity was one of those concepts. Two areas he covered were collaborative rating social viewing. Both of these happen independent of TV already, but are not embraced by the broadcasters. For example, kids send each other SMS messages via their mobiles all the time when they watch TV. This has been happening for years. The only way the media has taken advantage of that is for competitions and voting on programs like American Idol, which recorded 178 million votes this year. It’s hard to find out what revenue they got from that because it depended on how you voted and who your carrier was, but you can be certain that signifiucant revenue was made, but I digress.

I was talking about social interactivity. So kids text message each other all the time while they watch TV and with new media such as Twitter, the same thing crosses the age barriers. For example whenever there is a major sporting event on anywhere in the world, people are tweeting in real time and sharing their opinions and passion. I believe this will be huge during the Rugby World Cup in New Zealand in 2011. It will be happening concurrently around the world via mobile and internet. That would be a great opportunity for Sky TV in New Zealand, NBC, and others to get involved, but I doubt they have the foresight.

Another topic that John Smart covered was ratings. I don’t know how accurate the current TV ratings systems are, but if TV really wants to compete with the Internet, why not give all viewers the ability to rate what they are watching on TV and at the same time  what they are viewing by way of IP broadcast media.

A great thing about the Internet is that it can cater for every taste. I have around 60 channels on my TV, but I have access to so much more media online. Family overseas have access to hundreds of channels, but most of it is reruns of old TV series.

I regularly watch TED videos on my TV via my iPod connected to my home theater, but the interface is ugly and its a pain to connect my notebook to my TV. I don’t have an iPad as yet, but I can certainly see myself getting some sort of IP TV connectivity, whether it is a home media hub (so I can get internet radio as well as YouTube and other products around the house).

Today, according to Smart there are 20,000+ streaming Internet TV Channels including YouTube, Vimeo, Metacafe and Viddler. Boxee is an example of a Set Top Box that started off with an open source media software package. Unfortunately many of their services such as Pandora are not available in New Zealand. I’m going to give it a try and see if I can make it work downunder.

I’ll stop here and will come back to this topic as I am just grazing the surface. Leave your comments and bookmark this page if this is of interest to you. This is a very exciting and rapidly changing environment and it will be interesting to see who the winners and losers are in the next 5 years.

Boxee review suggests it has potential, but isn’t quite ready?

I’ve been reading


This week I had a short stay in hospital for a minor operation and have been resting up to make sure that I don’t pop any stitches. For a couple of days I was popping pain relief which had as much influence on my head as my body, then I decided I wanted clarity back and started reading.

I mean really reading. I finished a book I had started weeks ago and started another straight away. I really enjoyed myself. I also got into reading some more articles and read a quote by Nicholas Carr, from an article in The Atlantic, which really resonated with me, entitled Is Google Making Us Stupid?

The core of the article is that we have access to so many snippets of information and the ability to easily research any topic, that we don’t have to do any serious reading any more. In fact most of us don’t bother any more. I have been an avid reader most of my life, but these days I spend more and more time on the computer.

My business and personal life involves amongst other activities, reading, responding to and writing emails and spending a lot of time communicating via Twitter, LinkedIn and Facebook, plus many sites such as MySpace and Music Forte, where I hope an A&R person or singer will pick up some of my songs. It seems to be a race from one micro-communication and application to the next.

In his article, Carr wrote: “My mind now expects to take in information the way the Net distributes it: in a swiftly moving stream of particles. Once I was a scuba diver in the sea of words. Now I zip along the surface like a guy on a Jet Ski.” That sounded so much like what I do, what I revelled in.

But here’s the thing for me. I have read thousands of books over the years, from literature to politics, science, philosophy and psychology and much more. I have enjoyed the American and English classics, with some Kafka and Solzhenitsyn, lots of Science Fiction, and many university texts. They have given me a background from which to interpret all the bytes of information I now sample, to understand them and make sense of them.

Because you can think faster than you read, I was able to analyse, interpret question and process everything I set my eyes on, storing it for future reference. But here’s the thing, many people today are not building those backgrounds of data and knowledge.

Many teenagers don’t read books any more. Many tell me they can count the total number of books they have read in their lives, on the fingers of one hand. When they communicate, they abbreviate words to send text messages on their mobiles or send emails. Spelling has become poor and many people who have come to me looking for jobs, could not write a quality CV to introduce themselves. When I complained about my children’s spelling in their school assignments, teachers told me that it was concept and intent that mattered, not delivery. I’m going on a tangent, but things are changing and they may not be for the better.

When it comes to news, only a couple of people in my office read a newspaper, although most of them are graduates. If we didn’t have one in the office, most people would know nothing more than what they see on the TV news, when they bother to watch it.

I’ve counted myself lucky that I live in New Zealand where people have had a DIY attitude, based around the history of being a young country where people had to solve their own problems and find ways of doing things despite many obstacles, including being about as far away from the rest of the world as you can get.

Kiwis have been known as inventors and problem solvers and have been well accepted in business all over the world, where specialisation is becoming more common. Even here though, talent shortages are becoming obvious, especially as people find they can earn more overseas. Another reason imho, is that without an intellectual background, and moving away from the land and domestic skills that come with necessity, we are losing those skills.

Companies who made their older staff redundant and replaced them with young managers are finding that they may be lacking in maturity that comes from experience and learning intellectually, not just info bytes. This is costing them dearly. In many cases older workers are going back into the workforce for economic reasons and companies are reaping the benefit of their experience, but this comes hard as younger people often think they know everything and don’t need ‘wise counsel’.

The world economy may help us, bringing people home from their extended overseas experiences, looking for a better place to raise their kids and our isolation could be a good thing.

Specialisation is going nuts. A story in The Futurist earlier this year by Bruce Tow and David Gilliam gave an example of a surgeon who was only qualifed to repair knees injured during the playing of football. There is a new specialisation now starting to becom sought after, which is that of a ‘connector’. A connector is someone who can understand enough about a lot of disciplines and can act as an intermediary to help solve problems outside of the specialist spheres.

Without realising it, I have become one of those. Many people come to me for advice in how to solve business problems. They have people within their organisations with amazing specialist skills, but without  the ability to harness these people to and networks to get results. Often it seems really simple to me, with my background and of course an objectivity that comes from not being involved in the path that got them to their current position.

So I’ve been reading and I guess I’ve been waffling, but I’m allowed because this is my blog. Many people think that Twitter and all the other networking sites are a waste of time. For many people they are, because they don’t have the skills to access the wisdom and knowledge behind many of the shared messages. The people who really maximise the wealth of information on the net are those who have read and absorbed knowledge first. The ones who rise up as genuine consultants share real knowledge. They don’t need to fill their micro bytes with quotes and links from someone else, they can think for themselves, because they did their apprecticeships, they learned intellectually and by doing, failing and doing again.

Maybe it was just the painkillers and reading this will be a waste of time. But then I don’t think reading is ever a waste of time.

Another Reason Why Newspapers Will Fade Away


This morning for the 2nd time in 2 weeks my NZ Herald wasn’t delivered. This happened a couple of times previously with the Sunday Herald which was actually the one I used to enjoy the most. After the 2nd time I cancelled it. Two weeks ago when my Saturday Herald didn’t turn up, I tried to call them and got a voice message saying that I had called outside of working hours. I thought to myself that perhaps reading hours might disappear as well and this morning I told them that 3 strikes and they could say goodbye to my subscription.

This is one of the reasons why newspapers are on the way out. Not only are they reliant on people who really don’t want to go out on wet cold dark winter mornings, but a printed newspaper is becoming so inefficient.

I get headline tweets from the NZ Herald along with 1,648 other people, with links to the stories I want to read. Online I can see the headlines and major stories on their homepage and then I can see the headlines for each section and go straight to the stories that interest me. The Herald is only one publication I subscribe to on Twitter, there are several news services that flick past me on the side of my browser using Twitbin which is a Firefox plugin.

I also use iGoogle for my RSS feed. This gives me the latest news on all the topics I want to keep up to date on. That includes lots of streams around topics such as GPS, LBS, Psychology, Music and much more. It updates itself automatically all day and I can see which stories I have read in case my memory fails me.

Twitter of course is also a great vehicle for getting the latest news about anything. It told me that there was an earthquake in LA just as I boarded a plane there, although it turned out to be inconsequential. It told me what was going on in Iran and even if you can’t spell swine flu you’ll find out what’s happening to real people like Izzy who just found out her brother has it.  If you could spell it correctly you’ll find out what is happening, which famous people have just caught it and more than you’ll ever want to know.

I started off saying that newspapers are closing and you probably thought I was exaggerating didn’t you. Well think again. Here are a few examples.

Of course there are also stories around the world talking about job cuts in the newspaper industry like this one in the Guardian.

This doesn’t mean, of course that we don’t want news. Of course we do, but we have new vehicles that are far more efficient, we now have a choice, in fact we’re spoiled for it. Did you wait for news about Michael Jackson’s death to appear in the newspaper? Of course not, it was on every TV news channel and you got it up to date. By the time the newspapers came out, the stories that were in it, such as him not being dead, but only in a coma, had long since been refuted.

The big problem for the print media companies, is that they don’t know how, or if they can monetise the online media. There are of course ways that they can do this, but they have to switch their thinking, which is so enrenched in ‘this is the way we’ve always done it’ that many of them won’t be doing it at all in the future. Sounds a lot like the recording industry doesn’t it?

Vote for me on NetGuide Web Awards:)


While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course http://luigicappel.wordpress.com.

Thanks so much for your support:)

The rest of the story, what can they find out about you on Facebook


Sorry about the wait, I’ve been meaning to do some more work on this blog, but I am on holiday you know. I can see that lots of people are interested in this so I am going to tell you a bit more about what I found.

The first thing is that when you are logged in to Facebook, at the top of your page you will see a button called Settings and in there one of the options is to edit your privacy settings. Some people obviously don’t know that or don’t know how.

If you set this to only allow your friends to see your records, you will be pretty safe, but if not, then you are pretty transparent.

I entered in a common name by way of a random search. I will not provide all the details, but this will give you an idea of what I found out about this random person who had not set their security settings appropriately, obviously not realising the implications.

This person is a 29 year old atheist. I could see how many friends they have and what their names are. I also found that I could see all the details of several of that persons friends Facebook accounts.

I saw that the person hda been in a relationship until November last year and that they are working in the armed forces and have been in that role for over 10 years.

I was able to see hundreds of photos and all the people in the photos, including some from overseas trips, were tagged with their names and in many cases I had access to their pages.

Reading the Wall to Wall messages I was able to find out about things like their favourite foods and what sort of material they like to read.

I found out what the persons favourite films, books and activities were and the list goes on.

Off course Facebook isn’t he only place where you can get lots of information about people, but it is one of the easiest and you don’t have to have any special skills.

My conclusion is that unless you want your life to be an open book, you really should be sure that you set your security levels carefully. The phenomenon of trust, where people share much more of themselves on facebook than virtually any other social networking application is something that we should all be concerned about.

What can people find out  about you on Facebook? Much more than most people think. It could very easily be abused. It would be very easy for example for unscrupulous advertising companies to find out about your interests and Spam you.

While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course http://luigicappel.wordpress.com.

Thanks so much for your support:)