April 1st, 2013

Disintermediation

h/t my husband

From the NYT:

http://www.nytimes.com/2013/04/01/business/e-commerce-companies-bypass-middlemen-to-build-premium-brand.html

The 2 page story is about up-and-comers exploiting manufacturer knowledge of what established brands are doing to help the New Guys produce cheap, on-trend items. The manufacturers are playing along because the established brands have had to retrench since the bust, and because they are mad at established brands being unusually slow to pay.

The story also mentions, but completely buries, the difference in payment model, which is the exact same payment model difference that led to discount stores in suburbia decades ago: pay when ship, rather than months later. This is another form of delevering or deleveraging, and when discount stores did it decades ago, they took on the capital risk of having paid for the item before they had sold it. With web retailing, the new guys are able to take the order, have it made, pay for it and ship it all very close together in time, thus limiting or eliminating their capital risk (they eliminate it if they take payment from the customer before having the item made; they limit it if they just shorten up the production and delivery time frame. I believe they are doing the latter, but making ONLY enough for what you already have orders for eliminates inventory costs as a segment of capital risk. I sure hope I got the vocabulary right. I know I got the underlying idea right, so if the words are wrong, please let me know).

Of course, you still have to deal with quality control, which even large retailers have difficulties with (the first iPhone, the current Lululemon yoga pant scandal, etc.), and the costs associated with establishing a brand. Retailers who maintain a commitment to in-person retailer (brick-and-mortar stores) continue to believe that touching and feeling is an important part of connecting with a brand and one that cannot be entirely dispensed with.

They may well be right, at least part of the time.

Tourism Drop in India

http://timesofindia.indiatimes.com/city/chennai/Inbound-tourist-arrivals-dip-by-25/articleshow/19326526.cms

Can't say that's surprising: when the headlines for months are relentlessly about horrifying gang rapes of (1) a woman accompanied by a man using public transport and (2) a woman accompanied by a man camping in the woods while bicycle touring from temple to temple, it's actually kind of hard to imagine the informed woman traveler, alone, with a man, or in a group that would feel inclined to take on that risk.

You can certainly argue that, well, gang rapes happen everywhere, and that is true: the world is a horrifying and depressing place and no one is ever completely safe. But the risks look a little different for each kind of person in each kind of place and right at this moment in time, optional travel to India has to look a little sketchy.

I, personally, was still working on forgetting this one:

http://en.wikipedia.org/wiki/2008_Mumbai_attacks

India looks so beautiful in all the pictures and video. The food is wonderful and everyone I've met from there seems kind and intelligent and polite. I'd love to go there. But I'm going to be waiting quite a long while yet, it seems.

ETA: Ford Figo ad controversy probably hasn't been helping either.

http://india.blogs.nytimes.com/2013/04/01/indias-ad-industry-shaken-after-ford-figo-controversy/

A very large number of people need to change their understanding of how this makes them look to other people, and why they should care.

There are links within that piece to other incidents. On the one hand, I can't help but feel that some of these younger advertisers, uploading ads for clients to websites without pre-clearing them, trying to be shocking to get attention, are maybe engaging in some cultural protest, a la adbusters. But the content of them is so tilted in one direction that it seems impossible to view it ironically or critically. I think these are just the Indian version of frat boys who desperately need some schooling. Or consciousness raising. Or something.