Apr 062017

This morning I’m talking with Steve Austin on ABC Brisbane about the future of retail as the city’s biggest shopping mall opens.

What does such a huge complex mean to the local economy and is it sustainable as the retail industry evolves?

Having had a massive upgrade, we can be sure Westfield Chermside will have plenty of technology to help customers spend money and we covered some of the ways modern retails have to understand consumer behaviour and predict what individuals will spend.

Prior to the segment (which starts around the 60 minute mark), Steve took calls from listeners about how retail has changed in Brisbane over the past fifty years.  The demise of fondly remembered department stores is a reminder of how the sector changed as consumer behaviour changed over the last half of the Twentieth Century.


Aug 202016

As Japan’s society ages and urbanises, the effects are being seen in buildings and communities being abandoned.

The Japan Times reports on how the nation is now becoming a magnet for urban explorers discovering what lies insides abandoned homes, hospitals, hotels and theme parks.

Many of the abandoned tourist attractions are legacies of the 1980s economic boom that saw a massive over-investment in property plays. With a shrinking population, those facilities were always doomed but in a growing society, there would have been economic reasons for redeveloping them.

In Japan though, those economic drivers don’t exist in much of the country as the Japan Times explains.

“Japan is in some sense uniquely blessed as a land of ruins. Its rapidly aging population, low birth rate, urbanization and lack of immigration have left a legacy of ghost towns and more than 8 million abandoned homes, or akiya. That tally could hit 21.5 million, one-third of all residences nationwide, by 2033, according to the Nomura Research Institute.”

Japan is the first of many nations that will face the consequences of an aging population, what they do will be a lesson to all of those who follow. Of those, China will probably the biggest experiment.

One big lesson is property demand changes and once valuable assets don’t necessarily hold their value in the face of a societal shift.

Apr 132016

Can Japan reinvigorate its startup community? A story in the Wall Street Journal describes some of the attempts to encourage entrepreneurs in an economy that has been stagnant for a quarter century.

In many ways Japan is a prototype for the modern global economy, just as the Japanese tried to stimulate their economy following their 1989 bust by pumping money into their deeply corrupt construction industry , so too has the rest of the world tried a similar strategy with the banking system after the 2008 crisis.

The results in both cases been the same stagnation as the money is wasted on non productive schemes and speculation rather than investment in job and wealth creating businesses and innovations.

Now the Japanese are looking to a bottom up stimulus to their economy which challenges the country’s social norms where getting a ‘safe job’ with a large corporation is seen as the best prospect for young people.

While this is a change from the accepted wisdom, the entrepreneurial model really isn’t that strange for the Japanese with a range of successful technology companies started by post World War II entrepreneurs ranging from Sony to Softbank.

The Japanese model though may not be suited to the Silicon Valley venture capital model and this is where it’s dangerous to make comparisons with what works in San Jose, Tel Aviv or Shoreditch.

Japan’s strengths in industrial engineering may well make its businesses well suited for the Internet of Things the Wall Street Journal article quotes serial entrepreneur Taizo Son as suggesting. Interestingly, the 43 year old serial entrepreneur is the youngest brother of SoftBank founder Masayoshi Son.

Another area where Japan is a glimpse of the future is in the aging population and it may well be that harnessing the abilities of older entrepreneurs is another area where the country can either show the way to success or what not to do with an older, stagnant economy.

In many ways Japan is a pointer to where the world is heading. How they manage the early twenty-first century will be a lesson for the rest of us.

Oct 282015

Europe risks heading into a ‘digital recession’ warn Bhaskar Chakravorti and Ravi Shankar Chaturvedi in the Harvard Business Review.

Chaturvedi and Chakravorti base their concerns on the Digital Innovation Index they created that looks at the sophistication and speed of digital change across fifty developed countries.

Most Northern European countries, along with Japan and Australia, were advanced but their rate of adoption was falling risking their economies dropping behind the researchers found.


The solution offered by the authors was for the countries to encourage investment, immigration and exports.

The only way they can jump-start their recovery is to follow what Stand Out countries do best: redouble on innovation and continue to seek markets beyond domestic borders. Stall Out countries are also aging. Attracting talented, young immigrants can help revive innovation quickly.

A striking problem in Europe is the state of e-commerce across the continent where consumers prefer to buy from US based sites than from those of fellow EU countries.

In many of the nations government Austerity policies have also hurt investment while risk averse cultures have discouraged innovation and new business formation.

For Europe, the risks of being left behind are real and with an aging population a fall in living standards is a likely possibility. It would be a shame if the European Union experiment ends up failing due to a digital recession.


Sep 302015

Businesses would be wise to stop telling people what they should want and let customers tell them what want says Shel Israel in his latest book, Lethal Generosity.

In this book, Israel’s previous works include Naked Conversations and Age of Context which were both written in collaboration with Robert Scoble, he looks at the technological and social changes affecting business and how they can adapt to a rapidly evolving marketplace.

Key to that evolving marketplace is the explosion of data offering businesses deep insight into their customers. as Scoble describes in Lethal Generosity’s introduction in talking about social analytics service Vintank;

VinTank was acquired by a big PR agency that wants VinTank to do for all sorts of industries what it has done for the wine industry. Are you a restaurant or a winery ignoring that data? Go ahead and keep doing that for a decade. Your competition won’t.

Israel illustrates the need to watch the marketplace in citing a campaign where Canadian brewer Molsons completely wrong footed an oblivious competitor, something similar to how one bank discovered a rival’s successful marketing campaign through real time bank deposits data described  at the recent Splunk conference.

Focusing on the customers

A customer centric outlook, not looking at competitors but focusing on what consumers want is key to success in the new economy, Israel believes. This is enhanced by technologies that allow both products and marketing to be personalised as shown in the chapter detailing how retailers and airports are using beacons and data analytics in their operations.

One good example is AirBnB, while Israel trots out the ‘biggest hotel chain’ in the world fallacy that’s pervasive among commentators, its effects on the established industry has been profound and have forced hospitality operators around the world to re-evaluate their business models.

Israel suggests the best response for businesses affected by the ‘Uberization’ of their industries is to adopt the social and analytic tools and strategies being used the upstart businesses and he provides a wealth of examples.

Seamless sales

Tapingo, the food ordering service for US college students, illustrates the seamless experience that consumers are increasingly demanding in their shopping, business and leisure activities. Israel cites how Tapingo’s merchant partners are seeing an in-store traffic boost of 7 percent and a gross profit rise of 11 percent as a result of using the service.

Shel also illustrates some of the failures in deploying new technologies, specifically London’s Regent Street Alliance that failed due to poor execution and a failure to engage the marketplace.

One of the weakness in the book – which Israel acknowledges – is its focus on US, and specifically Bay Area, case studies. While there are some non-North American examples such as Australia’s Telstra and China’s Alipay, most of the examples cited are of companies based in or around San Francisco and Silicon Valley.

Focus on Millennials

Another weakness of the book is the over-focus on Millennials or Digital Natives. While this group is important that obsession risks Israel’s message being pigeonholed amongst the noise of poorly thought out pop demographics and poor analysis that marks much of the discussion around changing tastes and habits between generations.

Israel’s point that the post 1982 generation will soon outnumber older cohorts in both the workforce and the marketplace in the near future though is an important aspect for businesses to keep in mind with the safe certainties and predictable customer behaviour of the baby boom era being long gone.

However the shift in consumer and workplace behaviour is just as pronounced among all the post World War II generations as technology and the economy evolves in the early 21st Century. Focusing on the younger groups risks missing similar shifts among older members of the community.

The value of customer service

Ultimately though, Israel’s message is about customer service. Shel himself flags this is not new, in describing the competition between hiking goods suppliers The North Face and Sierra Designs in 1970s Berkeley.

What is different between today’s businesses and those of forty years ago is technology now allows companies to deeply understand their customers and provide customised marketing, products and experiences to the connected consumer.

For the business owner, manager or entrepreneur, Lethal Generosity is a good starting point to understand the forces changing today’s marketplace. The case studies alone are worth considering for how an organisation can adapt to a rapidly evolving world with radically shifting customer behaviour.

Sep 282015

“No business or brand has a divine right to succeed,” said McDonald’s CEO Steve Easterbrook last May.

As McDonalds’ management desperately try to adapt to a changed marketplace, Bloomberg Business spoke to some of those bearing the greatest risks – the fast food chain’s franchisees.

The expansion of menu items and the shift to more custom produced burgers is creating problems for franchisees and store managers as equipment and procedures designed for simpler times struggles with varying demands.

McDonalds is in a terrible bind as the company faces a society-wide shift in consumption that leaves its business model stranded at the same time that the market is wanting more customised products.

The latter is an aspect that many businesses whose success and profitability is based on mass production are now facing as customised products become easier and cheaper to produce.

While McDonalds isn’t likely to go out of business soon, the broader trends aren’t running in its favour. That’s bad news for both the company and its franchisees.

Jul 182015

As the world worries about whether China is the next Japan, the Japanese themselves are getting on with life in a low growth economy.

One of the latest ideas is to convert disused golf courses into solar energy farms as manufacturing giant Kyocera proposes a solution to deal with the nation’s power shortage after the closure of the Fukushima power plants.

Japan’s golf course boom of the 1980s, which they exported around the world, was a classic case of overinvestment driven by easy money and lax lending standards. Something that China has certainly had in spades.

The aging nation isn’t doing a perfect job however with the Washington Post reporting that the country’s over 65s are convicted of more crimes than juveniles and the sad reason is seniors are shoplifting to survive.

One of the major mistakes made by Japanese governments through the 1990s was to pour money into corrupt civil projects to stimulate the economy. That money was largely wasted on bridges to nowhere and bullet trains to tiny towns which did little to add to the nation’s productivity or build a safety net for the aging population.

Japan may well be leading the way for other aging nations, we need to heed their mistakes before our societies follow them.