Consumption 2.0 and Mobile Society

I’ve just read an article by Hugo Garcia of Futures Lab in Portugal in the latest issue of The Futurist. He was outlining how younger people today are more mobile, more focussed on consuming goods, services and experiences, rather than being attached to things and places. One area that he was strong on was the fact that people are now so mobile and keen to explore the world and their environments.

Location becomes far more important because you are continuing moving around as opposed to tied to a fixed location in the world. He said that one example is the trend towards not owning a home, perhaps ever. I always hear talk about how hard it is to get into property, I don’t think it has ever been easy. When we bought our first home (to give ourselves and our children some long term security) we bought in a cheap neighbourhood and at one stage were paying in excess on 20% interest. For a couple of years in the beginning, we went without pretty much anything, just to pay the interest. Today many don’t want to restrict their lifestyle, making it a choice, their choice is to live for today.

The ‘office’ is for many people today, especially knowledge workers, not somewhere we need to be a lot of the time and the cost of maintaining an office, commuting, car parking (you could almost rent a room for the cost of my Auckland City car park). We go to the office when we need to, for meetings, teamwork etc, but otherwise I can be much more productive from my home office.

Hugo talks about shared mobility. This is not a new concept, but certainly one that is coming back with a vengeance. Back in the 1960’s the Provos introduced white bikes that anyone could use. The idea was that you grabbed a bike, rode it to where you wanted to go and left it there for the next person to use. Their concept, same as today was to reduce pollution and traffic congestion and promote community engagement. They were certainly engaged as very quickly the bikes were stolen and repainted, but the idea was very good.

Today carpooling continues to grow, Zipcars, recently purchased by Avis, which is currently being debated as to whether it was an anticompetitive manoeuvre, is an example of car sharing, which in principle makes a lot of sense. People share ownership in boats, holiday homes and other items and many people are travelling around the world using the services of portals like Airbnb. There are loads of companies sprouting up like Whipcar, which lets you rent out your own vehicle when you don’t need it.

Globalisation is also an area that is changing rapidly. I remember reading history books about the great depression and how people moved from town to town looking for work. Mobility today is something far more international and international borders are being crossed continually by people in search of work, whether it is because they can’t find it at home, want a better life, or simply enjoy the itinerant lifestyle. Over a million Kiwis are working and living overseas, while British and other nationalities are moving to New Zealand to work on projects such as the reconstruction of  Christchurch.

Hugo points out there are pro’s and cons. “Unfortunately, some areas may become abandoned because they lack competitive advantages. The war for talent between countries will increase, but regions that offer good living conditions may gain an advantage.

I note again that knowledge workers, one of the biggest industry segments today can often work from anywhere and travel when required. I know many journalists and developers that live in small towns for the lifestyle, but can still perform on a global stage.

This mobile society opens up huge scope for innovation and disruption, particularly with location based services, applications for mobile use, which can support the new mobile lifestyle. Kiwi developers can and are developing applications used globally, despite those that say you can’t be successful unless you are in Silicon Valley, things are changing. The money may be there, but they don’t have a monopoly of good ideas.

If anyone knows about a mobile lifestyle its Kiwis, anywhere is a long way from New Zealand. We know how to travel, we absorb and learn and we love new technology. Where we need help is harnessing our smarts, to help our innovators and entrepreneurs to learn how to scale and think big. That’s a tough ask and I don’t think our Government is doing anywhere near enough to ensure that smart people are able to grow from small concepts to large global enterprises.

I was just asking myself how I suddenly got on my soap box, but then I’m not sure I ever get off it:)

Advertisement

The end of Whitcoulls and Borders in New Zealand

If you have a Borders or Whitcoulls voucher, even if you hate the idea of spending double to be allowed to spend your voucher, I recommend you do it quickly, because within a couple of weeks it will be worthless. It was interesting to see that there is no mention of the current situation on the Borders website which talks about eBooks coming soon, although Whitcoulls have been a bit more responsible with a home page announcement.

The demise of these companies isn’t about eBooks, it is largely around debt as pointed out by Liam Dann in this morning’s Business Section of the NZ Herald.  and the business models. I’m not going to discuss the debt because that doesn’t reflect on the industry itself, it reflects on higher level financial decisions and the economy, not on the book trade.

Book stores and music stores are in industries that are steeped in history of “this is how we’ve done it for the last 50 years and why change it if it aint broke”.

As was mentioned in today’s NZ Herald story by Isaac Davison, “In 2010, 9.67 million books were sold, an increase of 1.2 per cent in volume but 0.1 per cent down in value against 2009. This was despite the mark-up on books in New Zealand, which saw paperbacks sold for as much as $20 more than online, even after shipping costs.”

So much for Amazon (of course there were a huge number of Kiwis including myself who purchased from Amazon as well) being the cause of the demise of our local stores.

I also appreciated the comment in the same story from Jo McColl of Unity Books that many people bought hard copy books as a consequence of having purchased eBooks. I’ve done that too. I read eBooks, listen to Audio Books and still have a personal library of around 2,000 print books. The same with music, I listen to lots of music online but have still purchased at least 10 CD’s so far this year.

I might have to go to a separate blog about how Whitcoulls and Borders business model needed to change in order to stay viable and vibrant (ignoring REDGroup‘s debt which doesn’t reflect on the book trade business model itself) because for these guys its too late unless they get a savvy new owner (who will not purchase the chains’ debt) who is ready to adopt a new business model.

REDGroup have called in Administrators. I don’t care who the administrators are. Their role is a short term one and it isn’t about changing the business model or trading back into profit. It is about the creditors.

They will try to negotiate with the book publishers and wholesalers and other suppliers who are desperate to get paid for their product and worried about their future viability in NZ. Inland Revenue want their taxes and will be first in the queue.

They will need to negotiate with the 1,000 staff who will have to have new short term contracts and will be justifiably worried about whether they will get paid at all, let alone have a future with the chain, but at the same time, will be essential should they find a new buyer for the chains.

Based on the outcome of their negotiations a decision will need to be made on whether to go into receivership which is next most likely step. If that happens, enjoy the book sale, because there will be many bargains up for grabs.

The shame of it is that (outside of the decisions that got REDGroup into this financial position) the problem in the trade is that the business model needed to change and like the music industry and other industries, the people running them don’t get it. They should have learned from the music industry, which still doesn’t get it. Other industries who don’t get it include banking, telecommunications and consumer electronics to name a few.

What should they have done and what can other retail businesses do in order to not follow Borders and Whitcoulls into the mire? Subscribe to my blog and I’ll give you a few pointers for free. It isn’t rocket science, but it is a fundamental shift in thinking, whilst also remembering the fundamental simple principles of retail and distributon.

We live in a new world, its exciting and there is a lot of money to be made, but the fatal flaw is thinking that if you do the same thing you have always done, that you will get a different result.

There is an RSS feed to this blog. Come back and read some of my ideas on how companies like Whitcoulls and Borders can thrive and prosper.

Here are a few things I would look at:

• Understanding your business
• Communication with customers
• Communication with staff
• Distribution methods
• Stock turn and inventory management
• Engagement
• In Store Events
• Proximity based marketing
• Shelf Management
• Relationships with community
• Relationships with education
• Location Based Business Analytics
• The Internet
• Gift Registry

I could and probably will go on. The answers are a mixture of the old and the new, neither of which these chains have effectively managed. Borders started in the right direction in the US, but didn’t continue the evolution. International chains like Borders and WH Smith focussed more on the  era of globalization than evolution of the business model. Something that would have made short term heroes who have probably made their money and moved on, but was only ever going to be short term.

On Living Longer

I’ve decided I want to live longer.  I love technology and I love this world of change and the ability to be involved in this technological era. I have things to contribute and I want to be active in ICT, Location Based Services and also as a songwriter. I want to see my children and grandchildren grow up and explore this ever changing world and see what they make of it.

I’m going to have to work longer, that was always expected, but then providing my Maslow and Herzberg needs are met, I enjoy working. I enjoy making a difference, helping people achieve their goals. I enjoy learning, watching what is helping in my spheres of interest, particularly those mentioned above. I enjoy collaborating and networking and am particularly passionate about seeing New Zealand step up to the plate and continuing to innovate and achieve greater success on the world stage.

I reckon a healthy target for me would be 120 given medical advances now and in the future. My greatest risks are probably heart and cancer, with the determining factors being nature and nurture and my general disposition i.e. my attitude and happiness.

One thing that is obvious is that I have to look after my financial well being. If I continue to work, then raising the retirement age isn’t going to be a major for me. If I am enjoying my work, see a future for myself where I can contribute from my experience, passion and knowledge and can continue to grow, I wouldn’t be expecting to retire at 67.

I know I can’t rely on the Government to give me any kind of lifestyle on the retirement pension anyway. Our budget deficit has just been raised to over $15b and despite some significant successes, we still don’t have an infrastructure that really supports innovation. We tend to take credit once people are successful, but most successful innovators tend to be successful in spite of the country’s and their employers contribution rather than because of it.

So my first considerations as I start goal setting and planning will be how I can maintain my lifestyle in the years to come, continue to build an asset base so that when I wind down to a shorter working week I can continue to enjoy a lifestyle and if I should be forced into retirement through poor health (which is not the plan) I can still live comfortably, which no one can in NZ on a pension or benefit. I have a super scheme, I still have a mortgage. I am closing down my rental property LAQC and have sold my rental property. The Government doesn’t want people be able to claim losses from their expenses and without that I can’t afford to own rentals. I’ve invested in public companies before, but unless you are buying and selling daily, this is in my opinion a far greater risk business. Even the biggest companies make mistakes or get caught up in circumstances beyond their control and shareholders unless they are big, have little or no control over their destiny. How many Kiwis lost their life savings in the past by investing in ‘rock solid’ companies?

So I’ll invest in myself. I am studying song writing at Berklee Music on-line, which is costing me a small fortune, but if I can score 1 or 2 hits somewhere along the way, I’ll recoup that investment. I study the industries I’m involved in daily through the media, the occasional conference, networking in person and through social media such as LinkedIn and Twitter and I read a lot.

I have and continue to amass a huge amount of local and international experience in a number of industries, particularly in the application of leading edge technologies to solving business problems. Experience, I have learned takes years and is perhaps something that is least appreciated by younger people who come out of university thinking they know everything and by people who have stuck in one industry or a very small number of companies during their work career.

So to cut a long story short, I need to start planning for my long future. I need to consider a range of aspects, particularly how I want to live those years, what I want to do in them, what I want to contribute, what capital I need, how to maintain my health and fitness. Must be time for some goal setting and dream building.

I’ll leave the last word for now to Anne Brunet (who came via that other little university in Boston (not Berklee Music, but Harvard) and Thomas Rando of Stanford U.

Note the real meat of this video starts around 21 minutes in.

Food scarcity and arid land

In my last blog post I wrote about the importance of agriculture to our economy. Then I started hearing stories that farm sales were down, especially dairy. Apparently of over 4,000 farms on the market, only around 200 sold last month.

Good news for some of the farmers who want out, because there are foreign investors who want to buy them. One company wants to spend $1.5 Billion dollars buying NZ farms. You would have to wonder if we can’t make a good living out of farming how can other countries do it? If we do sell them, where will the earnings from those farms go? Not into our pockets I would suggest.

China has a problem. They have a large dry land mass and not enough water to grow the crops they need and a huge and growing population. What are they doing about it? They and other countries such as Middle East are buying good arable land wherever they can get it for a good price. For example China is buying farming land in Mozambique, Angola, Malawi, Nigeria and even Zimbabwe. It’s not all bad, they are teaching local farmers better techniques in animal husbandry, improving crop yields etc.

What are the motives of China and Arabic countries in buying this land? They need the food. In Ethiopia, one of the worlds poorest countries, not only are they selling land to foreign countries, they are giving them tax holidays for a number of years, but what is of greater concern is the expectation that most, if not all of the crops will be going back to countries such as China, Saudi Arabia and Kuwait.

I ask myself therefore, again, why can’t we produce high yield crops on our fertile soils and sell it to the countries that need it. Once those countries have bought our land, we won’t be getting it back and I wouldn’t expect us to gain much in GDP from the crops they grow.

As I said in my last blog, the ‘good old days’ were when we were largely an agrarian economy, we had plenty and we also had plenty to export. Now we have fantastic biotechnology and the ability to increase yields, quality and in many cases without using GM technologies.

I would hate to look into our future and see a country that can’t feed itself, that grows crops on farms owned by other countries, go straight offshore to feed them with minimal economic benefit to us. I would welcome someone to explain the logic of this.

We have expertise, maybe we should be assisting some of those countries who are unable to maximise the return on their land, help them thrive and clip the ticket. That would be a win win. While we do that, we also continue to research and improve product, the grasses and other food sources for animal feed etc. We do have some successes such as Fonterra, Livestock Improvements and many other thriving areas of research and results in biotechnology. We should stick with what we are good at and rather than give our farms to the Chinese, Arabs and others who want them, let the Government buy them. They could be run by unemployed people, who would get training on the job and perhaps even interest free loans to purchase some of those plots and use the skills they have obtained to build themselves a healthy asset and income, while increaseing our balance of payments. Is that silly? What’s wrong with my thinking?

In February this year there were around 168,000 people unemployed. Lets put them to work on those farms, teach them a trade, help them make something of themselves and help them earn the money to buy there way in with low interest loans and subsidies. What could we produce with 168,000 people working instead of paying them to do nothing. The single person benefit is around $160. That works out to a wasted loss of around $26,880,000 per annum. I say lets buy those farms and keep them in New Zealand hands.

This Video from TVNZ gives an example of what is happening.

I’ve been thinking

Do what you do well, is advice that is often given. Get back to basics. So let’s think about this for a moment from a New Zealand perspective. At the moment our economy, like many economies is looking grim. We are borrowing lots of money to stay afloat. We look to electronics, bioengineering and other things that we are good at, but aside from a few exceptions we don’t seem to capitalise on it. We are great with ideas, but not so good at doing something about it.

We have some success stories sure, wine does ok, lamb was doing ok until they invented food miles and we are pretty successful at controlling segments of milk and fruit, particularly apples and kiwifruit. The legacy of people like Angus Tait (who I had the privilege of working for 7 years) continues, but without his innovative attitude. We have some success stories, but they are really far and few between.

Many years ago, when we all took it for granted, we were an agrarian economy and very successful at it. We’ve been successful food exporters, right back to when the Dunedin, the world’s first refrigerated ship left New Zealand full of frozen meat carcasses, back in 1882.

New Zealand fed many parts of the world for over a hundred years and life was good. Live sheep have been exported for over 100 years, although a number of incidents where thousands of sheep died have had a negative impact on this. My biggest argument, besides the inhumanity of keeping live animals penned up for so long, was that much of the stock was exported for breeding purposes, which of course reduced the demand for our own product.

But I digress. In today’s economy, we seem to have turned our backs on some opportunities, such as creating large call centres to look after communications needs of other English-speaking countries in other time zones, a market that South Africa has made a huge industry out of. We aren’t doing enough in areas such as science and medicine, possibly because the people with the smarts go offshore.

So lets look at what problems the world is going to face in the near future, in fact many parts of the world are facing right now, food! Scarce water resources, growing populations and growing tracts of land that are becoming so dry and depleted that nothing will grow on them. Then of course we also have oceanic dead zones, which are killing fish and other sea life.

Is this something we could look at with a different De Bono Hat on? Oceanic Dead Zones thrive through a combination of fertilisers and nutrients that leach into rivers and down to the sea, causing large algae blooms. These compound as the phytoplankton absorbs available oxygen and pretty much kills everything off.

Could this be another opportunity? When I need some extra energy before a run, I swallow a pile of Spirulina. Spirulina is actually algae. Of course the algal blooms often contain toxins, but there are many algae that can be used as a food source. Perhaps we could turn a bad situation into a good one.

In New Zealand, since we signed the Kyoto protocol, it has become relatively economic to grow forests (which while gobbling up Carbon Dioxide also use up a lot of water). We have lots of land, a good climate for agriculture and a need to find new sources of income. In fact I have heard that NZ can no longer feed its population without importing food. So why don’t we start looking at ways of growing bulk food?

If we want to do the right thing, we could look at product that has low cost to grow, that we can export for a profit and help countries that have problems at the same time. More than 1 billion people (1 in 6) suffer from food deprivation.

Food Science is something we are very good at. Most universities have food science and biotechnology majors and there is even a Food Science Institute. Many people have a problem with GE Food. I don’t personally know enough about it, but one way or another we either have to put production into overdrive or accept that hundreds of millions of people will die soon through malnutrition and starvation.We have a food crisis now. Grain is scarce and with oil running out a lot of people are now growing grain to fuel cars, creating even less food source.

Whilst human population growth is slowing, there were still 74 million new mouths to feed last year. A large chunk of these are in countries where soils are eroding, water tables falling and wells going dry.

Water politics is becoming a new issue and it could be that future wars are fought between countries that share water sources. This is especially likely where low lands are reliant on water coming from highlands. Think Europe, where many of our recent wars have begun. But again I digress.

Can we go back to agriculture as something we are very good at and the world needs? Dairy is currently our biggest export and apparently Fonterra’s income represented 25% of New Zealand’s total export revenue 2 years ago!

So we are good at growing crops, but could we do more? I think so. First, we should be self sustainable. We can’t afford to rely on other markets, especially when things get to a crisis where 1st world countries start fighting over resources. Then we should look at how we can feed the world and get paid for it. As a country surrounded by sea, we do not face the extremes that occur with countries that have large land masses, including our neighbours Australia.

As to Food Miles, I’m all for sustainability, so lets look at this is an opportunity. This can mean focussing on closer markets such as Australia and Asia, but also on biotechnology to get more for less.

Sometimes I think we try to be too clever. Faster computers, cloud computing, cars, planes, rockets, 3D TV, all things I want to continue to enjoy, are meaningless to the ever rowing numbers of starving and malnourished people around the world. Because of our geographic isolation, we became very good at food. Let’s look for more and new ways to exploit this. Lets make sure that if everything turns to dung, we can still feed ourselves, then lets look at how we can help feed the world and pay off our national debt at the same time.

I’ll leave the last word to NASA who have remote sensing technology to monitor conditions affecting food resources and their management:

NZ Herald Landlords taking money we need

It’s soapbox time folks. Over the last week, there have been several stories in the NZ media about businesses complaining that people are investing in rental properties instead of buying shares and options in companies on the share market. The latest was in yesterday’s NZ Herald.

I take exception to their bleating and here’s why. Many years ago I worked for a company called RC Dimock as a divisional sales manager. A number of us got together under the guidance of the Financial Controller and formed a share club. We all put money in each week and collaborated on which companies we would invest in.

I really enjoyed it. I read every copy of NBR, charted the daily value of stocks, learned about all aspects of stocks and bonds and invested more in our own company, my employer when we were purchased by Anzon Investments. As time went on, I started investing independently, continued staying up to date with large reliable companies and punted on more risky investments in various industries.

I had my own broker and whilst my investments were not massive, I was young and suspecting that superannuation was not going to give me any sort of lifestyle, I was looking for ways to improve that situation when it came.

As well as Anzon, I joined many people who invested their life savings in NZ stalwarts including Brierley Investments, Carter Holt, Robert Jones and many other companies. Then came Black Tuesday and many Kiwis lost their entire retirement savings.

Friends and colleagues lost almost everything they had, whilst the senior managers of the public companies moved on and in many cases their old boys club helped them pick themselves up again.

When I got married and started a family, we bought our first modest home and gave up any form of lifestyle for a few years paying at times over 21% interest, but we were building some security. Other people’s poor business decisions and the economic climate were not going to take this from us, providing we were able to maintain the payments.

Subsequently I worked for a company which was embezzled by it’s CEO and lost 10’s of thousands of dollars in salary, commissions and a large company credit card bill that my boss had run up without my knowledge. I then learned what it means to get a company credit card and you sign a form in good faith saying that you are jointly and severally liable for a company credit card. The credit card company who were coincidentally owned by my bank told me that I could either pay for the company credit card, or they would sell my house and give me the change after the 9 month bill was paid.

Further in my career, when I was making a lot of money for my new employer of almost 7 years, I was made redundant when the company was sold, along with several of my colleagues and my MD. The decision was made on the basis of a spreadsheet looking only at what they were paying us, not the great success we were achieving, over budget in ebit and sales.

So forgive me for having a lack of faith in business as a way of protecting my future lifestyle if and when I reach retirement age.

I started learning about rental properties, LAQC company structures, negative gearing and tax benefits, in as much as being able to claim depreciation and costs against my personal income and invested in a rental property.

Some people thought I was rich because I had a rental property, but my own home remained modest and I was having to subsidise the rental to cover the cost of the 100% mortgage, i.e. I had zero equity. My first tenants were a young family with 4 kids. Sometimes they would call me and say they couldn’t make the rent and could they pay the following week. I was paying around $170 a week to top up the mortgage, because the rent didn’t cover it. Then there was property insurance, fixing appliances, calling in drainlayers when they tried to flush nappies and other unmentionables down the toilet. These are just a few of the issues I had, and if it wasn’t for the ability to recover some of these losses against my income tax I would have gone broke.

The family were never going to be able to buy their own home and didn’t take great care of mine. They couldn’t pay a rent that would cover my costs, market rents did not reflect the cost of owning property. My hope was that over time the property value would increase and I would recoup my losses.

The key to my rationale, which I still subscribe to, is that I was making my own decisions and having control in the level of risk I was prepared to take. I wasn’t going to have my safety net taken away by some entrepreneur who was travelling first class around the world, who was able to walk away and start again when he had spent all my investment savings.

Owning a rental property is a business. There is a need for rental properties. The Government has quit most of their State Housing stock and people who can’t afford to buy their own homes, around 35% of the NZ population, over 1.5 million people do not own their own homes. So who is going to take responsibility for them?

When people set up a public company and use our funds to run them and take risks with, we have no control over how they use our money. If things turn sour as they have for many Kiwis trying to invest their hard earned money, they walk away and set up their next business. Investing in public or private companies is high risk. For people who can afford that risk, great, enjoy. But most owners (think big mortgage) of rental properties are not wealthy people, they are just people trying to make sure they can afford a little lifestyle when they retire without being a burden on their family. It is not easy owning rental property and the odd example of someone who has built up a rental empire is the exception, not the rule. The majority are Mum’s and Dad’s who don’t want to live on a combined income of $478 a week.

Could you live on $478 a week including rent, power and phone? What would that give you for food? Forget entertainment. On the other side, there is the potential for people to live much longer than in previous years and with Baby Boomers, less tax payers to heklp support them.

If the Government wants us to invest in business instead of rental property, they should give us some security against the risk of public companies. Of course they will also have to invest in providing rental accomodation for the 35% of us who can’t afford to own their own homes. What are the odds of that? About the same as that of people who invested their life savings in Brierley Investment shares. Telecom shares anyone?

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.

Seems Unilever are not trying to con us

A few days ago I wrote a blog about the new Uniliver products such as Surf and Persil, complaining that they have just launched new super concentrated products and that at a local Pak N Save store where they used to special the product at prices ranging from $1.69 to $1.89 a pack and were promoting the new pack which has the same washing power as the old one, but their new special was 2 packs for $5, a premium of over 25%.

At the time I wrote the blog, I also contacted Unilever via their website and asked for clarification of this and an explanation. Initially I got a very nice email from their Consumer Relationship Consultant, ellaborating on the wonderful properties of the product but bypassing the question on price. I replied to say that I agree, their products are great products and that being more biodegradeable was an excellent feature. The quality was never in question and I have to say that their website is excellent, full of great information about how to use their products in a variety or circumstances.

I then got another response saying that they haven’t changed the product pricing from the old one to the new concentrate and inviting me to call them with any further questions. I did call the Consumer Relationship Consultant who was open and diplomatic, explaining that they have no control over any pricing other than setting the Recommended Retail Price (RRP). That is in fact true and I should have realised that to start with. It was in fact Pak N Save who were manipulating the pricing.

I’m relieved to hear that, its just a shame that the promo person in the supermarket didn’t understand the question to start with. So what was happening? Basically the Supermarket were hoodwinking their customers by in effect saying you could buy 1 of the old product for $1.89 or 2 of the new products, which are the exact equivalent of the old product from a use per pack perspective for more then 25% more.

This is not an unusual trick in a supermarket. They have lots of ways to make you think you are getting a bargain. A common one is to haphazardly throw tins or other containers into an end aisle dump bin to make it look like the products are on sale, but still charge normal full retail. This is all part of the tricks of the trade. On the other hand they also have their loss leaders, where they sell product at very low prices, often below their cost to the supermarket, to get people to come in and combine those with other more profitable products for the grocery spend.

In this case, they were just a bit silly and patronising of their customers who are often quite astute. Their timing was very poor and it has reflected poorly on them. On the other hand Pak N save are often cited as the best value for money grocery chain in the country. So the lesson is, be alert and watch for good deals and be aware of items that look good but aren’t. In today’s tough times, they would have done better to keep the price as it was and keep customers trust.

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 https://luigicappel.wordpress.com.

Thanks so much for your support:)

Is Unilever trying to hoodwink us?

This afternoon my daughter came home and said she had an argument at Pak N Save, (the premium brand of NZ owner operated supermarkets in New Zealand under the Foodstuffs banner) with a promo person who was telling people about the new concentrated laundry detergents of Surf, Drive, Persil, Cold Power, Fab and Dynamo, all from Unilever, who according to their UK website are one of the most trusted brands in the UK and state that Always Working with Integrity is one of their key philosophies.

So you would think that their new ‘ small and mighty’ 2x concentrate products on all of their laundry detergents would offer great value. The pamphlet that arrived in our letterbox says that the product has been changed to a super concentrate that offers the same washing power in half the volume. The promo person at Pak N Save, said that the new product offered far better value because you could do the same amount of washing with half the amount of powder. My daughter didn’t have a problem with that, the problem she had was that if it was essentially the same washing power, doing the same amount of washing, why did the new product cost more?

Herein lies the problem and it was perhaps slick marketing at first, because your first reaction with new improved and concentrated would be better than the product it replaced and therefore worth a premium, which was pretty much what the promo person in the store was trying to get across, but that wasn’t what the printed material says. It says that it does exactly the same as the old product did, but with half the volume of powder. So from a benefit or performance perspective it is exactly the same result in a smaller box.

The smaller box has many benefits for the grocers and Unilever because it uses at least a third less packing and distribution costs are halved because it takes up half the space in the warehouses, trucks and supermarkets.

That’s all great, but the problem is that they are charging more! My daughter said that on special she used to pay $1.89 or sometimes $1.69 and the new promotion special was 2 for $5 yesterday. Which equates to $2.50 per box. That represents more than a 25% increase in cost to the consumer for a product that costs less to bring to market and does the same job as the old product.

Perhaps someone from Unilever would like to explain this. It appears to me to be a cynical attempt to hoodwink consumers out of their hard earned money, which in today’s economy would appear to be out of step with their stated values. It sounds to me like a rip off!

They don’t have a New Zealand web site, but this is their Australasian contact page if you would like to ask the question. I will be making contact with them and if I don’t get a good answer, I’ll be following my daughter away from the Unilever brands.

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 https://luigicappel.wordpress.com.

Thanks so much for your support:)

The ANZAC Currency is approved

Yesterday evening agreement was reached between the NZ Prime Minster, John Key and the Australian Prime Minister Kevin Rudd, to create a common currency. In a joint statement they said that this had been on the table for many years and successive governments had decided to see how the Euro fared as a shared currency. Given this success they have announced that within one year of today, there will be a new shared currency between Australia and New Zealand called the ANZAC Dollar, or ZAC for short.

There will be a commemorative ZAC Dollar silver coin minted next month as a collectors item. Given the relationship between Australia and New Zealand, whose soldiers fought side by side in 2 World Wars, the commemorative coin will be minted on two sides. One side will feature Sir Charles Upham, possibly the most decorated Kiwi, with a Victoria Cross & Bar, Greek Medal of Honor and African Star. The other side features Australian War Hero, Alfred Shout, who earned many citations including the Victoria Cross, Memorial Scroll and Kings Message.

The existing currencies of each country will be phased out over a 2 year period and from 25 April 2010, the date of the ANZAC Day commemmoration, either currency will be accepted in both countries until the new currency is released.

“This will herald a new era of a close relationship that has existed for over 200 years”, said John Key  from his Beehive Office in Wellington, where he quipped that he had of course not been around at that time. He went on to sayb that in these difficult economic times, a joint currency would have a stabilising effect on the local economy.