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:)

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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