Auckland Kindle Buyers at Dick Smith Beware if You Want to Read Library Books

I have a Kindle, the latest model WiFi 4GB which I bought from Amazon, cheaper than I could buy it locally, which sort of goes to the story I posted this morning about retailers who struggle to cope with change in the way people buy products, i.e. competing with online sales. My wife and I both have iPads, but for reading on long trips or after a day on the computer, I really like the Paperwhite because it isn’t back-lit, so doesn’t cause eye strain.

I am also a happy customer of Auckland Libraries, mostly downloading audio books which I listen to while driving or doing chores like mowing the lawn.

My wife decided after seeing myself and one of our children getting great value from our Kindles, that she would like one too. With the Auckland libraries also having an excellent collection of digital eBooks, I thought this would be a great opportunity for us to get real value, so I went to Dick Smith Electronics in downtown Auckland to see if it was worth buying locally.

Just inside the door is a Point of Sale unit with a Kindle Paperwhite, same model I own and an old model original Kindle Fire (which I understand was superseded quite a long time ago). I looked at the feature display sheet and it says that Kindles including the Paperwhite will allow you to read public library books. Now that isn’t strictly wrong because I know someone who reads them, but they are from Australian libraries. I wanted to confirm whether I could download eBooks from the Auckland libraries onto a Paperwhite. The salesman couldn’t tell me, he was going to check for me, but couldn’t confirm anything and ended up with another client while I went on my iPad to look it up. I asked him to check it out for me. Obviously it was confusing because their POS clearly said I could read library books. When he couldn’t give me an answer, I asked who could. He said that the merchandisers were the people who dealt with the POS so I asked if I could talk to them. That wasn’t possible, so I asked who the distributor was that they worked for. He said they are actually Dick Smith Electronics staff!

Here’s what I found on the Auckland Libraries website. So, given that I wanted to buy a Kindle for my wife, I asked the sales person, when he eventually returned to me to let me see a Kindle Fire to find out whether it would be better on the eye that the iPad, because I didn’t want to buy the Paperwhite at $179 if it couldn’t download the library eBooks.

The sales person said he was sorry, but he couldn’t show me a Kindle Fire because they didn’t have one out of the box; and he couldn’t open a new one because then it wouldn’t be new. I told him in that case he had lost a sale because I wasn’t going to buy one if I couldn’t try it out and see if it was fit for purpose. It’s hard to be a customer at Dick Smith Electronics. I left the store without a purchase. I tweeted that they had lost a sale.

In hindsight I could have bought one because under the Sale of Goods Act, if it wasn’t fit for the purpose I had described to the sales person, I could have brought it back for a full refund. He could have even suggested that, but he didn’t. I also live about 12km from the store and it would be a real hassle if I had to take it back. I hate to think what the customer service level would be for a return after that experience. So my wife still doesn’t have a Kindle.

I subsequently got a Twitter message from Dick Smith Customer Service saying that someone would give me a ring within 2 working days. As you can see, that was just over 2 weeks ago. I haven’t had a call or a message (in case I missed one) since.

So I’m probably going to buy another Paper-white Kindle from Amazon for US119 rather than NZ$179 or $199 depending on where you look, locally from Dick Smith and accept that we can’t download library books. We can buy books on one Kindle and share them with the other and Amazon also have subscription services which are pretty cool. I guess ultimately Dick Smith isn’t local anyway, they are Australian owned, I think, well listed anyway.

My real concern is, if you live in Auckland and you bought a Kindle Paperwhite because you read the POS which says you can read library books, you will find yourself disappointed. I have pointed it out to Dick Smith via Twitter, and the photo above saying you can, was taken in their store in downtown Auckland yesterday, so their in-store marketing hasn’t changed since I first brought it too their attention more than 2 weeks ago.

I did eventually talk to a librarian who confirmed that you cannot download and read library books from any Auckland libraries on a Kindle Paperwhite. It appears the reason you can ‘on some Kindle Fire’s’ is in fact because they are Android Tablets.

So what do you think. Does it help clarify why I sometimes buy things offshore instead of in local stores? Sometimes it’s actually easier.

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Does Your Business Have CIPA? (Read Time 82 Seconds)

I’m just finishing the book Socialized by Mark Fidelman. It is one of the better books I have read of late about harnessing social media. Many of these books date very quickly, but the information in this 2012 book is still very relevant and I recommend you read a copy.

Towards the end Mark relates the story of a girl who suffers from Congenital Insensitivity to Pain, aka CIPA. It was an analogy to businesses who are heading down the gurgler at a rate of knots and don’t even realize it. Those of you who read my blogs will know about how frustrated I was to see Borders self implode, when they didn’t need to. As I mentioned earlier this week, many businesses are being hurt but not realizing it, or not knowing what to do about it. It’s that frog in the pot of simmering water. We all know the story, but many of us are sitting in that pot, enjoying the warmth and then getting severely cooked.

In my experience, it is people who aren’t institutionalized in your business who you need to talk to. If it’s not consultants like myself, at least talk to your customers, the ones you have left. Ask them why they come to your business. What is it that drew them in and how can you give them what they want and stay profitable?. I had loads of answers for the book industry, but they ‘knew what they were doing”. They focused on best sellers, general merchandise goodies and even fluffy toys. The questions you need to ask have to be qualitative, don’t give them choices you think they should answer, have conversations with them. Or get out quick and sell your business to someone while it still has some value. I still maintain if I had been on the management team or board of Borders in NZ, they wouldn’t have floundered, they would have risen like a phoenix out of the ashes of the past and their stores would be full of people, in many cases still buying paper.

Do does your business have CIPA? Are your margins declining, is your stock-turn going down? Are people buying similar products online instead of from you? Are your customers slowly churning to other sources or evolutions of the goods and services you offer? What have you done to future proof your business? As I said in my other blog earlier this week, people are reading more, listening to more music and taking more photos daily than ever before.

Got any questions? Feel free to leave them as comments and maybe we can have a discussion about this.

It’s Hard For Retailers To Embrace New Mobile Marketing Technology

I’ve been engaged in a conversation in a mobile marketing group LinkedIn discussion where people involved in solutions such as mobile coupons are complaining that retailers are intellectually lazy and not looking to embrace new technology.

I argued that most retailers focus on BAU (Business As Usual), working in their business employing strategies and technologies they have used for years, which they understand and can deal with. They do not spend anywhere near enough time working on their business, including strategies to embrace new technologies.

Many retailers have been hurt by one-day deal companies, where they gave up 50% and more in GP in the hope that if they gave great service, they would win new loyal customers. Of course we now know that didn’t work and the only ones that made big money out of it were one-day deal companies. They didn’t have to invest in inventory or carry any risk to speak of.

I’ve presented at a number of conferences on the topic of mobile and location based marketing. What I found really sad was that of all the delegates, the number of retailers at these events could generally be counted on the fingers of one hand.

I’ve been looking at how I could help retailers, particularly in New Zealand and Australia with solutions available today in a cost effective way. I think I have come up with a solution, but its going to take me a fair amount of time and money to deliver.

I will start in the area of Travel and Tourism, largely because they are more focussed on customers who are actively looking for services and new experiences and the industry is used to investing to win new business. Their market is also tough and the traditional business services continue to largely support those who own the systems, ie reservation engines, directories, commissions to tour operators, rather than retailers themselves. These businesses are easier for me to access and easier to quantify direct ROI. Also the individual transactions often have a higher dollar value, so if I can demonstrably increase their cashflow and profit and share in the gain, I can recover my costs more quickly.

I was thinking about how hard it is to get retailers out of the shop to talk to them and from years of calling on owner operator retailers in the past, trying to talk to them in their own environment with customers in store, that’s all but impossible.

So I’m thinking retail readers, if there are any here, and would welcome your feedback on the best way to get in front of you and your peers. The problem is that most of them will never read this. The majority do not attend retail conferences, they don’t even participate in their own main-street organisations. They don’t even do something as simple as co-promote their neighbours. I remember years ago hearing Mark Blumsky (past retailer and Wellington Mayor) talk at the New Zealand Retailers Association conference about how he collaborated with his neighbours by giving away free coffee coupons at the next door cafe to people who bought shoes from him and the cafe gave discount coupons for shoes to their patrons. Leading retailers (because they were at the conference) all talked about it during the lunch and coffee breaks, but I don’t know if a single one of them ever emulated the exercise.

We have amazing free services such as Foursquare and people have probably used one of these apps to check into your store. They may even be your Foursquare Mayor, but you probably don’t even know what Foursquare is.

You need to embrace mobile technology and I want to help. But you’re probably not reading this, so you will have to wait until I have helped some other people first. If you are reading this, leave a comment, connect with me and others who want to see Australasian retailers thrive and grow in this exciting new world. Learn at your own pace, but please step outside of BAU and do something. One little step a day is 365 steps a year and that’s quite a lot.

Tough times for New Zealand Restaurants

There was a story in NBR today called Tough Winter for Restaurants. I left a comment, but it appears to have been moderated, perhaps someone thought it was self serving, just a guess.

I’m actually in the middle of a series of blogs, as you may be aware about location based services, but am going to take a quick break from this to share a few simple reminders about the basics of running a business in the hospitality sector.

What gives me the credentials to make comments on this, you may ask? Here’s a few:

• I completed a Hotel Motel Management course many years ago and assisted and lived in a busy Auckland motel for 18 months.
• I have attended hospitality conferences and exhibitions around the world.
• I started playing guitar and assisting in cafes and restaurants from the age of 14.
• I ran the Casio distributorship for cash registers in New Zealand and assisted with Australia and held around 70% market share in the industry segment for around 7 years and during that time keynoted for conferences including HANZ, Retail Merchants Association and others.
• I was technology editor for a retail magazine.
• I was involved in the development of the first electronic waiter pad systems in NZ, which were subsequently sold through Casio dealers in other parts of the world.

I could go on but I think that will do. So here are a few elements of Restaurants 101 for 2012.

There is an oversupply of restaurants and fast food outlets for the population of the country in most parts of New Zealand. Very few of the people running the restaurants have business training, many do it because they love food and they love people and entertaining and have passion for their business. Once that was probably enough. Having said that, even 30 years ago, a large percentage of these businesses changed hands every 18 months and having gone broke, trained the people who took over from them.

Table turn. The more times your tables are occupied within a dining session, the more profitable, subject within reason to what they are buying. Entrees and desserts are more profitable than mains. Make the mains too big and people won’t buy dessert. Dessert’s tend to generate around 80% gross profit margin.

If people are in for a night, keep coming to see them, ask if they are happy, offer them drinks. Alcohol offers large profit margins. Develop a relationship with them. A restaurant with a maitre d’ or person who remains in the dining area all the time, separate from the people who bring food in from the kitchen and take away the plates and cutlery, will make more profitable sales.

Ask guests what their expectations are, do they need to be served quickly because they are going to a movie or a show, or would they prefer to relax with drinks before and between courses. Show them that you care about their business and experience. People don’t mind paying if they are enjoying themselves. Be sincere, don’t give fake smiles and say enjoy and have people see your smile turn into something else before you have even turned away.

When a restaurant is empty or quiet, people walk past and wonder what everyone else knows that you don’t. If it is busy, more people will want to come in, but that doesn’t mean keep people hanging, waiting for service, because it will empty pretty quickly.

Have a business plan and understand what your model is, understand who your target market is and what they are looking for. There are lots of smart things you can do using social media and location based technologies and you will find plenty of them if you search through my blog, BUT if you don’t have the basics right, they won’t help you.

Many people still haven’t figured out that daily deal sites won’t bring you good business. Very few people who come to you through those sites will be back. They will cherry pick your profits and then do the same to the next business.

If you have the basics right and you know what your KPI’s are then I recommend you start with something like a combination of Foursquare and other social media. Have a really good look through Foursquare and the types of deals you can do with them for free.

Location based services and proximity based marketing are really good tools for distressed inventory. Fill empty tables when you need to fill them, not by discounting before you even know if you will. Get creative, remember Death by Chocolate? If you have desserts left, its getting late, look for people who might come in for coffee, Irish coffee and dessert, you’ll make as much profit from them as some of the people who stayed for an hour or more and just had a main and wine.

If you have any questions, please leave them here or if you disagree, I’m open to that too.

Group Deals and Offer Bombardment

The number of one day deal sites in New Zealand grows every day. There are dozens of them and many of them now have a separate site for each region with deals for experiences, dining, accommodation, attractions and activities. This is great for bargain seekers, but doesn’t necessarily do a lot for bricks and mortar businesses.

There are scenarios where they have value, for example if a business has very large volumes of aged stock that they need to quit. It can also be useful for new businesses to make customers aware they exist. They also come at a price. The more powerful the site, the more they charge with fees being anything up to 40% of the sale of each item.

If you want to attract new customers to your bricks and mortar store, then obviously you want a coupon or something that needs to be taken to the store for redemption. Even if you are quitting aged stock, there may be advantages in getting people into your store in the hope that they will purchase other products while they are there. There are also benefits to both the customer and the retailer in not having the time, packaging  and distribution costs in delivering product to the buyer. More on this in future blogs, looking at check in applications as opposed to group deals.

A study by Rice University found that  32% of businesses surveyed who used Groupon for promotions said they were unprofitable and 40% said they would not do it again. A major issue cited in the research was cannibalising existing business. Mashable quoted a statistic that less than 20% of people who purchased deals where they had to go to a store to redeem them, returned subsequently to buy full priced product.

So the question which I will come to in upcoming blogs is how to get people into your store at quiet times and more often. I believe the answer is in locations based services such as check ins and proximity based marketing. I welcome your experience or opinion on this.

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

On Twitter and Business

If you have or know teenagers, you will know that they spend a lot of time on the internet and particularly in the area of social networking. The most popular applications they use are Bebo, Facebook and MySpace. They aren’t just doing it on their PC’s at home, school or work, they are doing it on their mobiles. You might be surprised to know that in most countries in the developed world, including New Zealand, Facebook and Bebo represent close to half of all mobile data traffic. It is big and no one saw it coming.

Now people using social networking are no longer just Generation Y, it goes through all the generations, especially with professional social networking applications such as LinkedIn (go there and look for Luigi Cappel and you’ll find my account) where professional build a network where they can discuss business issues, look for staff or for jobs and generally communicate with like minded people around the world.

In the last few years the term Generation X has once again emerged. Generation X is generally agreed to as being the later group of Baby Boomers who challenged all the beliefs and philosophies of their elders. Instead of ‘we are doing this because it’s the way we always did it, or the way our parents did’ they tried new ways of doing everything.

These people grew up with the advent of the computer and are very comfortable with the Internet and various forms of Information and Communications Technology (ICT). Yet when marketers are trying to sell new product, they often focus on the Generation Y who perhaps traditionally were the ones who rushed to the record store to get the new albums and wanted to wear the latest fashions. Now of course fewer of them by CD’s when they can download or copy music, mostly without paying for it. In today’s economy they are also more likely to be tempted by sales and even if they didn’t need something, they might still buy it if the deal sounds good.

Back to Generation X. These people are now in the late 30’s and older. They probably have a home and a mortgage, are settled with a good income and despite the economy still have some spending power. So, here’s a thought from left field. There is a social network , Twitter, which has been quietly growing to a point now where there are an estimated 6 million users and around 55 million messages sent a month. It is said to be growing at a rate of up to 2,000 users a day.

So what is Twitter and why should I care. Twitter is a social network where you make friends, or in the case of Twitter, you ‘Follow’ people. You post messages, called tweets, from your internet connected PC or from your mobile phone’s browser. The messages are restricted to 140 characters including spaces, so you have to be very smart with your choice of words. It started with and its main focus was a social one, and the idea was that you entered what you were doing at the time, for example, ‘Having an ice cream at Milford Beach’. This is still a major use and many people only ‘Tweet’ amongst their real friends. I often see Tweets from friends saying things like “I’m heading down to Ponsonby for a coffee, anyone else in the neighbourhood?’

There are also social gatherings, for example a few weeks ago I attended the ‘Twestival’ in Auckland, raising funds for Charity Water, but that’s another story. Let’s keep it simple. Twitter is free, its easy to use and there are lots of applications you can get for free that allow you organise your Tweets. I use Tweetdeck and Twitbin depending on what I am doing at the time.

Twitter is now being used by lots of different organisations around the world. It is used by companies, manufacturers, news media and even government departments such as the Victoria Police. If you are able to come up with reasons why people would follow you, you have a free medium to make them aware of special deals and offers, events or anything else that you think they would be interested in.

Here are some examples. A bar could promote a Happy Hour Deal by posting a message. A coffee chain could send out electronic coupons as Twitter messages, offering a free muffin with coffee for the next hour. A women’s clothing chain could announce a special deal on end of season fashions, or announce the exciting next season fashions are in store. A bike shop could post special deals around a racing event, or perhaps send brief updates of the Tour de France. The messages are anything that you think your customers or prospects would find of interest and be happy to read.

The thing with Twitter is that it is not intrusive. It’s not like a text message that beeps and wakes you up in the night or embarrasses you in a meeting or at the theatre. You have to open up your browser on your phone, or a website on your PC to receive the ‘Tweets’. You can follow who you like and if you don’t want to see them anymore, you can stop ‘following’ them with ease.

So who is doing this already? Find out for yourself. If you go to http://www.twitter.com you will find an option called Find People. Click on this and then select the option box at the top called Find On Twitter. I had a go and here are some of the results I got. I entered ‘shoes’. I got back 91 results. There were generic shoe stores, golf shoes, wedding shoes, custom soles. But when I entered ‘Shoes NZ’ or Shoes New Zealand there were none. I can think of some iconic shoe retailers who could jump into this spot.

So who can you find promoting product on Twitter. Here are a few names that you can look up and follow to see what they are doing and remember it’s free! Vodafone and Telecom, Adidas, Starbucks, McDonalds Cincinnati are doing a great job of promoting new products and deals, Borders Books, The Car Shop, Pro Guitar Shop, Sisters Gift Shop, Alpine Ski Shop, just entering shop I found over 200 shops who are already using Twitter around the world. Now to be fair, only some of them are actively using Twitter for marketing, but that is normal and it is still a relatively new concept, but Twitter has gained 6 million users in less than 3 years, so you would have to say they are onto something and if you are smart, you could be one of the first to really make something of it.

If you look around, you will find retailers who have got it together. For example http://twitter.com/fluevog is a shoe shop. They offer electronic coupons, they have links to pages where they tell you in Twitter about a new product and provide a link to a web page where you can see them. They have only been using Twitter for a short time, only sent out 17 messages and they already have almost 500 followers!

Just as a footnote, even if you are a bricks and mortar retailer and don’t do much on the Internet, you might want to think again. For example if you have identified your target market, especially if you are a speciality retailer, then Twitter could open up a whole new area of opportunity for international sales. There must be loads of opportunities to export product, especially Kiwiana to individual customers.

Twitter is very viral in its approach and if you find people who like your kind of products, and you offer them information and deals in your Twitter messages, the word will get out and their followers can become yours.

One final, final word. Like anything, Twitter as a social network. Blogging environment requires consistency. People won’t follow you if you only send a couple of messages a week. They also don’t want to receive a hundred a day, you need to find a balance, but the main thing is that you provide something that they are pleased that they read.

So here’s a free service that you can get results from if you are smart, for an investment of 5-10 minutes a day. It can create a loyal following and grow a viral network for your business. One other thing I forgot to mention, there is also Twitpic http://twitpic.com/ , which allows you to post photos with your Tweets, again for free, so now you can even show followers pictures of your store, the friendly faces inside or your new products, oh and I did mention that this is all free didn’t I?

And if you want to follow me, you will find me at http://twitter.com/BluesBro.

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:)

What happens when the consumers can’t buy anymore?

Everyone has a deal. Harvey Norman is offering 12 months deferred payment and 12 months interest free, Noel Leeming has deals, Bond and Bond has deals, there is even a web site called Perweek that lets you search for products by the period of interest free terms they are offering.

The Scooter Bar has ads on Trade Me offering deferred payment and special deals on new motorcycles and on it goes.

There is always something essential that you need, like a new HD TV with Freeview, an iPhone, a new car, a stereo that you can plug your iPod into and on it goes.

A couple of years ago I bought a new Canon camera. I had the cash in my savings, but I decided to take the 18 months deferred payment and then pay it off straight away. I paid a week late and GE Money, the company that seems to be offering a large chunk of retail finance wanted to charge me a hefty fee for that, but no one sent me a slip or reminder to say it was due and I had diarised it a week out. I stood my ground and as Noel Leeming wanted to keep my business I didn’t have to pay the late fee.

6 months or so later I got a letter from GE Finance offering me a special deal with pre-approved finance for a sum, I can’t remember exactly, but it wasn’t interest free, they were offering me finance at 24% interest!

They have all sorts of great ideas and of course you could say that anyone silly enough to take that deal deserves to be taken to the cleaners, but the problem is that there are people who are struggling and will be thinking, these guys want to lend me money and I need money, so lets do it.

I wonder if there is recourse in the finance. If the person who is paying for their new HD TV defaults, does it become the finance company’s loss or the retailers problem. Finance companies are typically risk averse, so I’m guessing it’s the retailer. It would be great if someone can clarify that for me.

So here’s the thing. There are loads of people spending money they don’t have on things they can’t afford and chances are it’s not one item, it’s several over a period of time. So when the masses are broke and the retailers aren’t getting paid, what happens next?

We are already officially in a recession and things aren’t getting any better. Very soon a large number of people will owe much more on their homes than their value, especially the thousands who bought at 90 to 100% of the property value in a growth market and those who leveraged heavily for their retirement funds.

If retailers can’t recover their money, they can’t buy new product, they can’t afford their staff and the manufacturers can’t keep manufacturing. If houses aren’t being built because people can’t afford to buy them, all the trades will suffer, plumbers, electricians, builders, labourers, the list goes on.

Is this inevitable? Is there a solution?

Some people got hurt in 87′ but most people in New Zealand have not lived in a depression and have lived a life of instant gratification. Of course there will be some fortunes made as well. What could some of the consequences be?

Increased domestic violence is on the rise, violent crimes are on the rise including aggrevated robbery. Drug use is on the rise which increases crime and the worse of things are, the more displaced young folk will be heading into the welcoming arms of gangs.

How can we avert this?

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:)