David Fuller and Eoin Treacy's Comment of the Day
Category - Autonomies

    The bizarre business of intentional product failure: planned obsolescence

    This article from reportsfromearth.com may be of interest to subscribers. Here is a section:

    Today built-in obsolescence is used in many different products. There is, however, the potential backlash of consumers who learn that the manufacturer intentionally make the product obsolete faster. Such consumers might turn to an alternative producer (if any exists) that offers a more durable alternative. In other words, this nasty strategy is not available for small companies who would only lose customers.

    Given today’s tremendous increase of international corporate power and severely reduced competition, planned obsolescence has become an attractive possibility for products than ever in human history.

    Built-in obsolescence was already used in the 1920s and 1930s when global mass production became possible and rigorously optimized. 

     

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    How One Huge American Retailer Ignored the Internet and Won

    This article by Kim Bhasin and Lindsey Rupp for Bloomberg may be of interest to subscribers. Here is a section:

    But don’t expect a trend heading back in time. This is a difficult system to replicate, said Simeon Siegel, an analyst at Instinet. TJX boasts a wide net of inventory buyers who find small batches of desirable clothing, then make a small bet on those goods. This is unlike the traditional department store model, where buyers look at runway trends and make large orders of a few items, hoping that they’ll be the winner for the season.

    “You’re buying closed-out product and you’re buying samples,” said Siegel. “You have to be very attuned to the numbers and very attuned to the fashion. The vendor base that you need to be plugged into and the intelligence that goes into buying the product is the most important asset they have. You need to find the most compelling stuff.”

    When stores like T.J. Maxx do it right, they leave their shoppers filled with feelings of adventure and serendipity, says Jordan Rost, vice president of consumer insights at Nielsen, a research firm. Even an unsuccessful trip to a discount store can reinforce the thrill of the hunt. The instincts driving customers into parking lots is similar to those shopping online, Rost says. They’re searching for deals and the best item to fill some broad want or need without a target in mind.

    As shoppers across generations and demographics become more focused on value than ever before, the excitement of finding something on sale has an even broader appeal. Millennials who grew up relying on e-commerce for all their needs are coming through the doors, too.

    “Younger consumers are really open to that kind of open- minded approach to shopping, not necessarily coming in with a specific brand or product in mind,” says Rost. “Discovery is part of the experience.”

     

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    Email of the day on luxury goods companies

    Hello I’ve noted that high level luxury looks pretty bad, but medium level luxury have interesting graphs. Tods Safilo and Luxottica seem to be basing, Tods is high quality but not flashy for example 

    Piquadro has stopped going down IT0004240443

    Ferragamo I can’t figure out the graph yet but it is to watch as well 

    Yoox looks bad to me, the site is awful compared to mytheresa.com 

    LVMh has broken out too it seems 

    I’m asking because I thought that with the dollar so strong , Asians would lower consumption, buy maybe they are buying less Prada and more sober brands I haven’t figured it out yet I read Dolce and Gabbana are going badly 

    Saluti!

     

     

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    Ford leads automakers in patents for 2016

    This article by Greg Gardner for Detroit Free Press may be of interest to subscribers. Here is a section:

    We are living the innovation mind-set in all parts of our business across the globe,” Nair said in a news release. “Our employees are delivering exciting new technologies for our customers at record levels.

    The Dearborn automaker was granted 1,700 more patents in other countries, bringing the total to more than 3,100 patents granted worldwide this year.

    One of those patents was granted to engineers Tony Lockwood and Joe Stanek for an invention that equips autonomous vehicles with drones.

    The system deploys a drone from an autonomous vehicle to map the surrounding area beyond what vehicle sensors can see. Passengers can control the drone using the car’s infotainment or navigation system.

     

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    As Schultz Steps Down, Next Starbucks CEO Brings Tech Savvy

    This article by Leslie Patton for Bloomberg may be of interest to subscribers. Here is a section: 

    Starbucks’ digital and technology prowess has put it ahead of its peers, allowing it to serve more customers faster. Same- store sales rose 5 percent in the Americas region in the most recent quarter. Mobile payments accounted for about 25 percent of U.S. transactions in that period.
         
    Starbucks built on its tech leadership with an order-ahead feature, which lets customers select and pay for drinks in advance. They then can pick up the beverages at a shop without waiting in line.

    Since Johnson became operating chief, Starbucks has rolled out mobile ordering across the U.S. and even tested delivery.

    The Seattle-based company also is boosting spending on digital ventures, including taking its app and rewards platform to countries such as China.

    Though shares of Starbucks tumbled immediately after the announcement, they recovered some of that ground during extended trading. As of 9:53 a.m. in New York on Friday, the stock was down 2.4 percent to $57.11

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    How Apple Lost China to Two Unknown Local Smartphone Makers

    This article from Bloomberg News may be of interest to subscribers. Here is a section:   

    “Oppo and Vivo are willing to share their profit with local sales. The reward was an extremely active and loyal nationwide sales network,” said Jin Di, an IDC analyst based in Beijing. While they declined to detail their subsidy program, she estimates the two were the top spenders in the past year. “They’re doing something different -- they do local marketing.”

    China had for years driven Apple’s and Samsung’s growth. The U.S. company generated almost $59 billion of sales from the region in fiscal 2015, which was more than double the level just two years earlier. During that time its shares surged more than 60 percent. At its peak, Greater China yielded almost 30 percent of its revenue and Apple was neck-and-neck with Xiaomi for the mantle of market leader as users clamored for the larger iPhone 6 models. Even as the domestic economy began to sputter, Chief Executive Officer Tim Cook spent a good chunk of an earnings call last year talking up the country’s promise, saying Apple’s investing there “for the decades ahead.”

     

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    Holiday Price War Heats Up as Wal-Mart, Target Chase Amazon

    This article by Lindsey Rupp and Sarah Very for Bloomberg may be of interest to subscribers. Here is a section: 

    “With the lines between traditional brick and mortar and e-commerce continuing to blur, the need to make a big splash during large retail events like Black Friday is significant,” Traci Gregorski, senior vice president of marketing at Market Track, said in an e-mailed statement. “The ease of comparison shopping across channels is creating a situation that puts a definitive advantage in the consumers’ hands.”

    Wal-Mart and others also are steering customers toward online deals, rather than just physical stores. While the chain still offers Black Friday specials at its supercenters, the day marks the beginning of a streak of online promotions called “Cyber Week.” Wal-Mart has tripled its e-commerce selection to 23 million products this year, aiming to better compete with Amazon. The world’s largest retailer said in a statement Friday that Thanksgiving was one of its top online-shopping days this year and that about 70 percent of the traffic to its website came from mobile devices.

    Target, meanwhile, is offering 15 percent off almost everything in its stores and website for two days: Sunday and Monday. The aggressive discounts come at a cost. When Target slashed prices last holiday season, its profit margin slipped to 27.9 percent from 28.5 percent.

     

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    Facebook Projects Greater Costs, Slowdown in Ad Sales Growth

    This article by Sarah Frier for Bloomberg may be of interest to subscribers. Here is a section:

    In the third quarter, Facebook increased its monthly active users 4.7 percent from the previous quarter to 1.79 billion, topping analysts’ estimates of 1.76 billion. Daily users rose to 1.18 billion.

    Facebook expanded its mobile ads business to Instagram, its photo-sharing application, which has started to contribute to the growth. While the company doesn’t break out sales, Instagram’s advertising revenue is rising faster than for Facebook’s main product, Wehner said in an interview. Still, Facebook’s main app was the bigger contributor to the sales increase, he said.

    Even if Facebook’s sales gains start to slow by the middle of next year, Chief Executive Officer Mark Zuckerberg has plenty of other levers he can pull to make money. In addition to Instagram, the company has two chat apps, Messenger and WhatsApp, with more than 1 billion users each. Facebook is testing models for revenue from the properties, such as letting users talk to businesses to book trips or send flowers.

    Meanwhile, Zuckerberg is changing the nature of the Facebook app to focus more on video.

    “In most social apps today, a text box is still the default way we share,” Zuckerberg said. “Soon, we believe a camera will be the main way that we share.”

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    Chip Makers Cut Deals as Cars Get Smarter

    This article from the Wall Street Journal may be of interest to subscribers. Here is a section:

    Ford Motor Co.,  BMW AG and others have said they would have self-driving cars on the road in the next few years, while Tesla Motors has a semiautonomous system already on the road. Tesla last week began shipping vehicles that include hardware that could one day be empowered by software, which must be validated and approved by regulators, to operate in a fully autonomous mode. Tesla Chief Executive Officer Elon Musk aims to demonstrate fully autonomous cross-country drive by the end of next year.

    Analog Devices Inc. cited auto applications as a key motivation in a deal announced in July to buy Linear Technology Corp. in a cash-and-stock deal valued at $14.8 billion. NXP became the top auto chip supplier by striking a deal valued at nearly $12 billion last year to buy Freescale Semiconductor Inc.

    But the market for years has been fragmented among many suppliers with different specialties competing on price. Where an iPhone has one central chip to power its computing functions, many parts of cars have long used separate chips—a situation that could become even more complex as car makers add more features for safety and other purposes.

    “Those will all require more processing capability and likely will be supplied by different suppliers who are not exactly working together,” said Dave Sullivan, an automotive industry analyst at AutoPacific, in an interview.

    The push toward autonomous driving is a countervailing force, requiring more powerful chips and software that can analyze feeds from cameras, radar and other sensors using technologies such as deep learning. Tesla Motors Inc. has moved toward a central computing system, announcing last week it had picked chip maker Nvidia Corp. as part of the self-driving hardware it has vowed to include in all its new vehicles.

     

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