Tag: shopping

Malls and the economic divide

The fate of two shopping malls illustrates the importance of skills and education for communities

Yesterday we posted on how a lack of education is contributing to the decline of America’s middle class. An article on Bloomberg’s Gadfly website illustrates the direct effects of this change in comparing the fortunes of two different shopping malls.

It’s not news that America’s malls are dying in the face of changing demographics, consumer tastes and economics but some centres continue to thrive.

Bloomberg’s Shelly Banjo and Rani Molla put the success of some malls down to the affluence of their customers. A centre that boasts Tesla, Apple and Louis Vuitton stores such as Atlanta’s Lenox Square thrives and charges high rents to its tenants.

Just the presence of an Apple Store boosts a centre’s rents by 13% claim the authors.

Eight miles away from Lenox Square is Northlake Mall which only attracts a quarter of the rents on a per square foot (psf) basis and doesn’t boast the high quality names but rather a range of fading chains and department stores.

Northlake’s woes lie in demographics with its shoppers scoring poorly compared to Lenox Square’s on all measures.

atlanta-mall-comparison

The key points are per capita income and the education level with only just over half of Northlake’s customers having a college degree or better with the result earning only 2/3rds of that of Lenox Square’s shoppers.

Northlake’s lagging educational and income levels isn’t unusual as this is exactly the problem facing most of the lower middle classes as their earnings fall as their skills are left behind by an increasingly technological society.

The decline of Northlake, and most of America’s malls, illustrates the effects of an undereducated workforce on the local economy. Making sure the population has the skills to compete in the 21st Century is more than just a problem for the individuals affected.

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Dashing to the shops with the internet of things

The Amazon Dash Button gives us a hint of how the Internet of Things will change shopping.

Amazon this week showed off their Dash Button, a device that lets brands set up a one press ordering system for customers.

The idea is that a brand, say a laundry detergent, gives out buttons that when pressed will automatically deliver washing powder or whatever product is preprogrammed into the device.

While its safe to say Amazon’s Dash button is a gimmick, it’s not hard to see washing machines, coffee makers or industrial equipment that comes preprogrammed to automatically order supplies when it detects reserves are running low.

So the Dash Button could be showing us how the Internet of Things will help us shop with smart devices automatically organising deliveries for us.

On it’s own the Amazon Dash Button won’t be changing the way we shop but the future of retail is going to be very different as the IoT rolls out.

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A year of competing beacons

Are we looking at too many beacon technologies?

It’s early in 2015 but year shaping up as being one where beacon technologies start rolling out in meaningful numbers as Facebook joins the rush.

Beacons are, as name suggests, small radio devices that signal their location to smartphones and wearable computers. If someone has the right software on their system, the beacon can alert them about anything from shopping offers to the presence of hazardous material.

The biggest potential market for beacons currently is the retail sector along with stadiums and concert venues although the industrial aspects shouldn’t be underestimated. Along with sports stadiums some of the more enthusiastic early adopters have been mall owners and local shopping strips as they see the opportunity of delivering more value to customers.

A question facing retailers and shopping centre owners is whether we’ll see competing networks of beacons being deployed as Facebook, PayPal, Apple and dozens of other companies rollout their own technologies. We may end up with a situation where businesses get sick of being nagged to install multiple devices for their shops or workplaces.

There’s also the problem of crosstalk as the different beacons interfere with each other. In places like shopping malls multiple transmitters could prove confusing for even the smartest smartphone.

Again we’re seeing how silos are developing across the Internet of Things sector as vendors release products tied up in their own proprietary standards.

As the cost of beacons has come down – many are available for under a dollar – the ability of vendors to offer networks has increased dramatically, over this year we can expect all the big players to release their own systems in attempt to control a slice of the market.

For beacons to really succeed in the marketplace it’s going to be necessary for vendors to agree on common standards. If we end up with a rag-tag collection of competing networks, then the promise of the technology will surely be lost.

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Links of the day – redesigning the car and South China Mall.

Interesting links include Mercedes’ vision of a driverless car, an analysis of the ill fated South China Mall’s flaws and how Amazon is reorganising its R&D efforts after the failure of the Amazon Fire.

The CES extravaganza continues in Las Vegas with a wave of announcement, most of which I’m ignoring, however the motor industry continues to show off new developments with Mercedes displaying their vision of how a driverless car will look.

Other interesting links today include an analysis of the ill fated South China Mall’s flaws and how Amazon is reorganising its R&D efforts after the failure of the Amazon Fire.

Mercedes redesigns the car

A little while back I suggested that we could do better in redesigning the driverless car – Mercedes have gone ahead and done it.

Mercedes’ redesign of the driverless car indicates just what can be done when we rethink what passengers will need in the vehicles of the future.

Ford recalls a vehicle for a UI upgrade

Ford has recalled its Lincoln MKC SUV models for a software upgrade after discovering drivers were shutting down the cars by accident.

What’s notable with this story is how software changes are now one of the main reasons for recalling vehicles and how design flaws in an automobile’s computer programs are relatively quickly discovered and resolved.

We will probably find in the near future car manufacturers will carry out the upgrades remotely rather than ask owners to bring their vehicles into dealerships.

A long running security flaw is exposed

In August 2013 a security researcher warned UK online greeting card vendor Moonpig that its system exposed up to six million users’ account and financial details. Until Monday the company had ignored him. This is a tale of classic management disregard for customer security and one area where business culture needs to dramatically change.

Rumours of an AOL – Verizon merger

It’s a speculative story but if a merger between US telco Verizon and former internet giant AOL goes ahead it may mark another wave of telcos moving into content services, although it’s hard not to think that Verizon could spend its money more wisely.

After a flop, Amazon restructures its R&D

The Amazon Fire was by all measures a miserable flop as a smartphone however it seems the company learned some important lessons from the device’s market failures. Instead of abandoning its research efforts, the online behemoth is increasing it’s R&D budget and reorganising its development division.

Design fails of the South China Mall

South China Mall just south of Guangzhou has been the poster child of Chinese malinvestment during the nation’s current boom. In a blog post from 2011, a shopping mall expert visits the development and points out the major design faults in the complex which may well have doomed the project from the beginning.

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Regent Street fights back

London’s Regent Street shows how main street retailers can use new technology to reinvent themselves

Main street shopping strips have had a hard time over the past forty years as supermarkets and big box stores have steadily drained customers away, however the new wave of retail, manufacturing and logistics technologies may be an opportunity to revitalise them.

A good example of shopping strips using new technologies is London’s Regent Street with its smart shopping app that integrates with iBeacon location devices,  the website Contactless Intelligence reports how shopkeepers, landlords and the local authorites are rolling out an initiative as part of a £1 billion regeneration project.

London’s Regent Street is a fairly unique mainstreet in that it’s extremely upmarket which gives it a lot of advantages over most neighbourhoods, but it does point the way for how other shopping strips can use new technologies to reinvent themselves.

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Pay Pal and the Modern Spice routes

PayPal trace the modern online spice routes with some important messages for retailers.

Online payments company PayPal has released a paper on the The Modern Spice Routes which describes the pattern of online trade across the US, Germany, UK, China, Brazil and Australia.

The results are a snapshot of how online commerce patterns are evolving.

PayPal commissioned the Nielsen Company to survey 6,000 online shoppers about their cross border online buying habits to determine some of the characteristics of global internet commerce.

What immediately stands out in the report is the United States’ dominance with 45% of global market share, China follows with 26%.

At the bottom of the pack is Australia with 16% and, surprisingly, Germany with 13%.

The US itself is an interesting study with the most preferred overseas shopping destination being the United Kingdom followed by China.

Why are people shopping online?

American respondents were overwhelming shopping overseas to access more variety, with 80% of respondents citing the reasons for shopping offshore being “more variety that cannot be found locally”.

Finding more variety was the key factor in all the markets. Even in countries like China and Australia were respondents cited saving money as their main reason for shopping internationally online, more diversity in offerings came a very close second.

That in itself show the opportunity for companies selling internationally  – be unique and don’t offer what can be found at the local WalMart or Tesco.

Illustrating this, the PayPal report cited Australia’s Black Milk clothing and Germany’s Hatshopping as two international success stories.

Intra-region trading

An understated point with the report is just what proportion of international shopping is of each country’s spend – in the United States’ case it is only 18% while in Australia it’s 35%.

Illustrating those internal trading patterns are the British and German figures that show online shopping in other European nations is substantial, so intra-EU trade is a considerable factor.

Similarly, the second popular destination, after the United States, for Chinese online shoppers is the Hong Kong SAR. In fact the Chinese statistics show that intra-Asian trade is just as substantial as EU commerce with Japan, Korea and Singapore all feature highly on the list of shopping destinations.

This illustrates a problem for Australia as it has neither the United States’ massive domestic market or a group of closely integrated neighbours and the high level of international online shopping indicates just how poorly local merchants are doing with their internet strategies.

Indeed, for Australia that the proportion of online shoppers buying overseas is so high should be a worry for local merchants.

Today’s modern trade of bulk carriers, courier companies and shipping containers is very different to the spice routes of Marco Polo’s day, the world is evolving around new trading patterns right now.

For businesses like Australia’s retailers those changed trade routes may not be kind to those who can’t change.

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