Category: economics | 經濟學 | 경제학 | 経済

Economics or the dismal science was something I felt that I needed to include as it provides the context for business and consumption.

Prior to the 20th century, economics was the pursuit of gentleman scholars. The foundation of it is considered to be Adam Smith when he published is work An Inquiry into the Nature and Causes of the Wealth of Nations. Smith outlined one of the core tenets of classical economics: each individual is driven by self-interest and can exert only a negligible influence on prices. And it was the start of assumptions that economists model around that don’t mirror real life all the time.

What really is a rational decision maker? Do consumers always make rational decisions? Do they make decisions that maximise their economic benefit?

The problem is that they might do actions that are rational to them:

Reducing choice when they are overwhelmed
Looking for a little luxury to comfort them over time. Which was the sales of Cadbury chocolate and Revlon lipstick were known to rise in a recession
Luxury goods in general make little sense from a ration decision point of view until you realise the value of what they signal
Having a smartphone yet buying watches. Japanese consumers were known to still buy watches to show that they care about the time to employers when they could easily check their smartphone screen

All of which makes the subject area of high interest to me as a marketer. It also explains the amount of focus now being done by economists on the behavioural aspect of things.

Luxury beliefs + more things
Luxury beliefs

Luxury beliefs is a term that I came across from the writings of Rob Henderson. Henderson has a similar kind of story to JD Vance. Addiction in the family and escaping his home environment by enlisting in the US Air Force.

After his service Henderson used funding via the GI Bill to go to Yale. He then got a scholarship to go to Cambridge to do a doctorate. Like Vance he had written a memoir: Troubled: A Memoir of Foster Care, Family, and Social Class that highlights the challenges faced in working class American society including violence and addiction. In his book Henderson explores the idea of luxury beliefs, how they benefit the privileged and harm the most vulnerable in society.

What are examples of luxury beliefs?

The luxury beliefs Henderson cites are seen to be widely held progressive views including:
- Defunding the police
- Defunding the prison system
- Decriminalising or legalising drugs
Getting rid of standardised exams – Henderson sees these as helping less privileged children get into college

Rejecting marriage as a pointless concept. – Henderson claims that one of the strongest predictors of success was if they were brought up in a nuclear family.

Henderson believes that the common thread that holds luxury beliefs together is that they are held by privileged people, the beliefs make them look good (and feel good about themselves), but harm the marginalised.

Luxury beliefs allow the privileged to look good by:
- Playing the victim
- Protest without penalty – which is less likely to happen to more marginalised protestors
- Push the less privileged down
Henderson labelled this ‘saviour theatre’. Henderson reminded of previous generation protestors like Patty Hearst and participants in the Weather Underground’s Days of Rage which would seem to fit Henderson’s definition of holding luxury beliefs.

More posts about new terms can be found on this blog.

Branding

What does Hong Kong airport smell of? Or your go-to hotel? The business of scent branding | South China Morning Post – If you are a fragrance enthusiast, you may have heard of Shiu Shing Hong, a quaint shop in Hong Kong’s Sheung Wan district that has been around for more than 50 years.

The store, which recently went viral on Chinese social media platform Xiaohongshu, not only sells house-made essential oils – must-have souvenirs for visitors from mainland China thanks to the exposure – but recreates the signature scents of popular malls and other venues in Hong Kong.

On its shelves are familiar – sometimes odd – concoctions. Bottle labels reference K11, a shopping mall in Tsim Sha Tsui, the five-star Rosewood Hotel, and the Hong Kong International Airport. Sportswear brand Lululemon has one too.

J. D. Vance Has a Point About Mountain Dew | The Atlantic – brands and identity

China

Deaths in China to reach ‘an unprecedented scale’, peak at 19 million in 2061 | South China Morning Post – due to aging population

WTO says China is backsliding on key reforms and lacks transparency on subsidies | South China Morning Post – World Trade Organization report cites studies that say subsidies could top US$900 billion – providing fuel for critics of Beijing’s practices such as the EU and US

Consumer behaviour

Inside China’s Psychoboom – JSTOR Daily – mental illness has transformed from a bourgeois Western taboo into a legitimate public health concern.

The consequences of the psychoboom are both logical and contradictory. As the Chinese economy has expanded and citizens have grown wealthier, the demands of everyday life have grown in number and kind, expanding from physiological and safety concerns to a desire for love, esteem, and self-actualization. At the same time, such desires run counter to traditional Chinese values like the age-old concept of Confucian filial piety and the relatively new ideology imposed by the Chinese Communist Party (CCP), both of which place the well-being of the collective above the happiness of the individual.

Kamala Harris, Usha Vance, and the twice-born thrice-selected Indian American elite

Design

Adidas partners with Mexican artisans for hand-embroidered soccer jerseys | Trend Watching

Economics

Maersk says Red Sea shipping disruption having global effects | Hellenic Shipping News Worldwide

Ethics

Apple, Nvidia, Anthropic Used Thousands of Swiped YouTube Videos to Train AI | WIRED

Microsoft DEI Lead Blasts Company in Internal Email After Team Is Reportedly Laid Off – IGN

Finance

Morgan Stanley, Goldman Sachs Say Recovery in Private Equity Deals and Fees – Bloomberg – Morgan Stanley and Goldman Sachs Group Inc. are confident that their most important clients are about to get active after a long spell on the sidelines and help goose the long-awaited revival in investment banking fees.
The private equity deal machine has been mostly jammed up for the past two years, leaving many investment bankers twiddling their thumbs while their bosses talked up green shoots that failed to flourish. There are plenty of potential road bumps ahead, but there’s reason to put more weight on the better outlook now even compared with just three months ago: The wave of debt refinancing that has led banks’ revenue recovery this year has also been helping to fix the prospects of many companies owned by private equity firms

The Financial Instability Hypothesis* by Hyman P. Minsky, The Jerome Levy Economics Institute of Bard College – interesting paper used in current negative critiques or private equity like Has private equity become a Ponzi scheme? – UnHerd

Gadgets

Sony is killing off recordable Blu-ray, bidding farewell to disc burning | TechSpot – Sony admitted it’s going to “gradually end development and production” of recordable Blu-rays and other optical disc formats at its Tagajo City plants in Miyagi Prefecture, Japan. Essentially, 25GB BD-REs, 50GB BD-RE DLs, 100GB BD-RE XLs, or 128GB BD-R XLs will soon not be available to consumers. Professional discs for video production and optical archives for data storage are also being discontinued. – the big shocker is the issue for archival formats

Alexa Is in Millions of Households—and Amazon Is Losing Billions – WSJ – a pet project of Bezos, and the Alexa voice assistant and the Echo speakers through which it communicated were inspired by his interest in the spaceship computer in “Star Trek.”

“When launching products back then, we didn’t have to have a profit timeline for them,” said a former longtime devices executive. “We had to get the system in people’s homes and we’d win. Innovate, and then figure out how to make money later.”

To do that, the team had to keep prices low. Amazon sometimes even gave away versions of the smart speaker as part of promotions in a bid to get a larger base of users.

Health

“It’s All Just F*cking Impossible:” The Influence of Taylor Swift on Fans’ Body Image, Disordered Eating, and Rejection of Diet Culture – ScienceDirect and 100-Pound Weight Loss: My health improved. My self-esteem didn’t. | Slate

Another Danish biotech can help investors’ hunger for obesity drugs | FT – this probably explains why Zealand pivoted from taking its medications to market to becoming research and selling on as its not big enough to exploit this opportunity on its own. (Full disclosure, I worked briefly on the diabetic emergency injection product until the company pivoted).

Ozempic Tracker Insights: Price Remains the Largest Obstacle – CivicScience

The economics of GLP-1 – Marginal REVOLUTION

Patients checking into rehab after abusing weight-loss jabs | The Times Online

Innovation

IKE and hyperice’s boots and vest massage athletes’ feet and keep their bodies cool

Dude, where’s my (flying) car? – POLITICO

RISC-V Thrives Through Research, International Collaboration – EE Times

Xiaomi’s ‘lights-out factory’ to mass produce new foldable smartphones | DigiTimes – but it doesn’t mean that the products will be better, just consistent. I keep thinking of the Fiat Strada, an ugly rust bucket of a car, that was ‘hand built by robots’.

Luxury

Luxury brands roll out 50% discounts as Chinese shoppers rein in spending | FT – this will destroy the intrinsic value of the brand

Italy’s competition watchdog probes Armani and Dior over alleged labour exploitation | FT – the question is more why now? It’s been known for years that Chinese workers are exploited in factories based in Italy.

Age of Ozempic: Predictions for the luxury industry | Vogue Business – Analysts agree that the pop culture influence of weight loss drugs is giving luxury labels and mass-market brands, alike, licence to refocus on straight-size. “Luxury brands have long been staunchly unwilling to cater to plus-sizes outside of the occasional token representation, but typically premium and mass players would invest more readily in plus-size,” says Marci. “Now we’re seeing the effects of Ozempic and weight loss culture on retail as a whole.”

Already, a host of US-based retailers and fashion companies including Rent the Runway are seeing boosted demand for smaller clothing sizes, and falling demand for larger sizes, according to The Wall Street Journal. Retailers have been investing in fewer products that offer larger sizing

Burberry’s new CEO has a task | FT Fashion Matters

EssilorLuxottica expands into streetwear with $1.5bn Supreme deal – the deal was a “no brainer” and had happened “very quickly” because VF was under pressure to divest its most “iconic asset”. EssilorLuxottica planned to use Supreme’s wealth of customer data and its Gen Z fans in China, Japan and South Korea to target new consumers – it shows how good a deal James Jebbia got with private equity and VF Corporation

Lewis Hamilton Named Dior Ambassador | BoF – formula 1 driver and pit lane dandy has also worked with Dior men’s artistic director Kim Jones to guest design a collection of clothing and accessories set to launch in October

Marketing

Rediscovered Absolut Blue Painting Inspires New Bottle | MarketingDaily

Focus on value pivotal for brands as consumers get more cost-conscious – The Media Leader

The King’s Speech 2024 – GOV.UK – restrictions on fast food advertising and energy drinks

Proportion of UK businesses increasing marketing spend hits 10-year high – The Media Leader

Evolution not revolution as Sorrell unveils Monks and reorganizes for easier client access | The Drum

Media

The return of piracy – net.wars

‘New model for human civilisation’: What is so unique about China’s style of modernisation? – CNA – interesting that CNA don’t provide a critical analysis on the positives and the negatives of the China model.

Online

Even Disinformation Experts Don’t Know How to Stop It | New York Times – Researchers have learned a great deal about the misinformation problem over the past decade: They know what types of toxic content are most common, the motivations and mechanisms that help it spread and who it often targets. The question that remains is how to stop it.

A critical mass of research now suggests that tools such as fact checks, warning labels, prebunking and media literacy are less effective and expansive than imagined, especially as they move from pristine academic experiments into the messy, fast-changing public sphere.

LGBT and Marginalized Voices Are Not Welcome on Threads – MacStories

Google Is Mind-Bogglingly Bad – On my Om – more ‘Google is Dead’ material – grist for the mill and Daring Fireball: Google Is Shutting Down Its URL Shortener, Breaking All Links

Apple Maps launches on the web to take on Google – The Verge

Retailing

Tesco takes on Waitrose and M&S in premium range fight | FT – implies that Tesco thinks consumer spend is likely to be going up again

The shifting world of e-commerce liability | The Daily Upside – Amazon’s legal issues and the fact it has over 553million SKUs

Security

American Hacker in Turkey Linked to Massive AT&T Breach | 404 Media

Software

Meta won’t bring future multimodal AI models to EU | Axios

GPT-4o mini: advancing cost-efficient intelligence | OpenAI – computing power per watt reduction is the most interesting part of this. You also see it in Mistral NeMo | Mistral AI | Frontier AI in your hands

Inside Microsoft, nobody really owns Copilot – The Verge

Taiwan

TSMC proposes Foundry 2.0 to alleviate antitrust concerns | DigiTimes – Trump-proofing the semiconductor industry

Technology

AI Chip Startup Graphcore Acquired by SoftBank – EE Times

Web of no web

The Future of AR Beyond the Vision Pro Is Already Brewing – CNET

Google’s XR Re-Entry Point | Spyglass

Wireless

China’s Transsion sued by Qualcomm and Philips as IP woes mount | FT
August 5, 2024
IT director powers up + more stuff
The IT director is seeing a return to power and its thanks to the power of hackers and AI. The smartphone, the resurgence of Apple and SaaS saw IT decisions become more organic thanks to increased access to online services that provided better features than traditional enterprise software companies and the rise of knowledge working. IT teams found management of mobile devices onerous and faced hostile users.

Michiko Fukahori of the Japanese National Institute of Information and Communications Technology at ITU TSB – 8th Chief Technology Officers (CTO) Meeting

This meant that the IT director became less important in software marketing. A decade ago marketing had pivoted to a bottom up approach of ‘land and expand’. This drove the sales of Slack, Monday.com and MongoDB.

Two things impacted this bottom up approach to enterprise innovation:
- Cybercrime: ransomware and supply chain attacks. Both are not new, ransomware can be traced back to 1989, with malware known as the AIDS trojan (this had much cultural resonance back then as a name). Supply chain attacks started happening in the 2010s with the Target data breach and by 2011, US politicians were considering it a security issue. Over COVID with the rise of remote working, the attacks increased. The risk put the IT director back in the firing line.
- AI governance: generative AI systems learn from their training models and from user inputs, this led to a wide range of concerns from company intellectual property leaving via the AI system, or AI outputs based on intellectual property theft.
The most immediate impact of this is that the IT director is becoming a prized target on more technology marketers agendas again. This takes IT director focused marketing from back in the 1980s and the early 2000s with a top-down c-suite focus including the IT director. This implies that established brands like Microsoft and IBM will do better than buzzier startups. It also means I am less likely to see adverts for Monday.com in my YouTube feed over time.

This doesn’t mean that the IT director won’t be disrupted in other parts of his role as machine learning facilitates process automation in ways that are continuing to evolve.

Target data breach: Why UK business needs to pay attention | Computer Weekly

Supply chain security – DHS finds imported software and hardware contain attack tools | Inquisitr

Software is not dead | Kevin Xu

The bizarre story of the inventor of ransomware | CNN Business

Silicon Valley steps up staff screening over Chinese espionage threat

Business

The whole supply chain is subsidised’: inside the EU’s blockbuster Chinese EV probe | South China Morning Post

Brands plan for a quiet Pride Month | News | Campaign Asia – The hesitation around Pride may also be related to executives’ increasing reluctance to speak out on social issues more broadly. Wolff pointed to Edelman’s Trust Barometer, which found that 87% of executives think taking a public stance on a social issue is riskier than staying silent. “Essentially, nine out of every 10 executives believe that the return on investment for their careers is not worth the support during this turbulent time,” said (Kate) Wolff. “This is clearly problematic for both the community and the progress we have made in recent years.”

Apple, Microsoft, SpaceX talent jumped ship after return-to-office mandates, study reveals | Fortune

China

The whole supply chain is subsidised’: inside the EU’s blockbuster Chinese EV probe | South China Morning Post

Resignation Bordering on Despair – by Stephen Roach – economics of China and Hong Kong – more here: An Audacious Wake-Up Call – by Stephen Roach. Roache was the head of Morgan Stanley Asia.

China’s Global Ambitions – Part 1: A Violent Thrust Into Modernity – Preston Stewart – quite a nice China primer.

Consumer behaviour

Brands have misjudged the politics of youth | WARC – STRAT7 Research on how woke has become a negative terms for some as the term takes on ambiguity and polarity in societal discussions.

Why Companies Should Add Class to Their Diversity Discussions | HBR

What triggers brand boycotts? | WARC | The Feed – interesting research, but I would like to have seen China and South Korea in this due to the interest boycott behaviours that happen.

People Like Harrison Butker Are Taking Over Catholicism | The New Republic – looks like the evangelical catholics

An uneven commute | Mastercard Services

The death (again) of the internet as we know it | Noah Smith

THE SILVER CULTURE PROJECT – interesting project by BBH London though the age bias in marketing and adland is strong

Culture

Rebecca F Kuang: ‘I like to write to my friends in the style of Joan Didion’ | The Guardian

Design

Pedestrians Aren’t Hearing EVs on the Road | Extremetech – engine sounds in EVs would be a solution. Imagine if your EV could sound like the dignified rumble of a 1980s vintage Mercedes 560 SEL?

Nokia’s Classic 3210 Returns With Modern 25th-Anniversary Upgrades – DesignTAXI.com

IKEA hosts flea markets at European stores to ‘keep good things going’ | Trendwatching – its a pity that most Ikea products are now built for margin rather than quality.

Emoji history: the missing years ⌘I Get Info

Making the Band: An Oral History of the Livestrong Bracelet | Texas Monthly – history of the early 2000s social object

Economics

The Foundation of American Folly – by N.S. Lyons

Finance

StanChart’s Iran transactions subject of fresh whistleblower claims | FT

Chinese underground banks shaking up money laundering.

FMCG

CosMc’s: Brand Launch — Macaihah Broussard • Art director

Nestlé Introduces Vital Pursuit Brand to Support GLP-1 Users, Consumers Focused on Weight Management

Gadgets

Oral-B Hopes You Didn’t Use Your $230 Alexa-Enabled Toothbrush | Hackaday

Germany

German parliament will stop using fax machines : NPR – I knew fax machines were still important in Austria and Japan. Interesting to see that they were still important in Germany as well

Health

Benchmarks for digital marketing in the pharmaceutical industry – phamax Digital

Hong Kong

This city never slept. But with China tightening its grip, is the party over? | CNN Business

HEY YU, DREAMER: Vanity car plates in Hong Kong prove an endearing, enduring trend | The Straits Times

China’s Economic Worries Spur a Different Kind of Shopping Spree – WSJ – sales of Hong Kong based insurance policies surge again representing middle class capital flight.

Ideas

Is human creativity fading away? – by Joel Stein and The age of average — Alex Murrell

Pop Culture Has Become an Oligopoly – by Adam Mastroianni

Tony Robbins on How to Make Tough Decisions – Real Leaders

IPA | Top Ten Practical Stress Busters | IPA

Is modern life bad for creativity? | LinkedIn – Contagious on Sir John Hegarty’s opinion on how modern life is making great advertising campaigns harder:
- A lack of shared cultural references
- Pivot towards sales due to wealth of customer data
- Remote working preventing collaboration
IP

Harley-Davidson sues Next over alleged trademark infringement | FT

Luxury

Chinese Firms Are Investing Heavily in Whisky Market | Yicai Global – Although international liquor giants have developed the local whisky consumption market for many years, the market penetration rate of overseas spirits in China, including whisky, is only about 3 percent. This means domestic whisky producers will need to develop new consumption scenarios, Yang said. Whisky consumption in China centers mainly around nightclubs, gift-giving and tasting events held by affluent consumers, Yang noted, but in these scenarios, imported whisky brands with a long history tend to be more popularly accepted,, so it will be difficult for domestic rivals to compete. According to the latest report from alcohol market analysts IWSR, China’s whisky market was worth CNY5.5 billion (USD758 million) last year, having grown more than fourfold over the past 10 years. It is expected to reach CNY50 billion (USD6.9 billion) in the next five to 10 years.

Yoox Net-a-Porter exits China to focus on more profitable markets – Multi-brand luxury clothing sales platform Yoox Net-a-Porter is closing its China operations, this against a backdrop of other brands also pulling out of Chinese e-commerce including Marc Jacobs fragrances. The corporate line from Richemont was “in the context of a global Yoox Net-a-Porter plan aimed at focusing investments and resources on its core and more profitable geographies”.

LVMH’s unit put under court administration in Italy over labour exploitation | Reuters – shines a light on the eco-system of Chinese manufacturers inside Italy that use Chinese and immigrant staff to cut costs

Step Into The Next Chapter Of Oakley’s Future

Fashion Matters on the big trends from FT Business of Luxury conference and Watch live: Kering deputy CEO Francesca Bellettini in conversation with Jo Ellison

Ignite the Scent: The Effectiveness of Implied Explosion in Perfume Ads | the Journal of Advertising Research – Scent is an important product attribute and an integral component of the consumption experience as consumers often want to perceive a product’s smell to make a well-informed purchase decision. It is difficult, however, to communicate the properties of a scent without the physical presence of odorants. Through five experiments conducted in a perfume-advertising context, our research shows that implied explosion, whether visually (e.g., a spritz blast) or semantically created, can increase perceived scent intensity, subsequently enhancing perceived scent persistence. It also found a positive effect of perceived scent persistence on purchase intention. In conclusion, the research suggests that implied explosion can be a powerful tool for advertisers to enhance scent perception, consequently boosting purchase intention.

The great fashion Brexit? Why UK designers are decamping to Milan | Milan fashion week | The Guardian

Marketing

How SEO moves forward with the Google Content Wa rehouse API leak | Searchengineland, original leak here: An Anonymous Source Shared Thousands of Leaked Google Search API Documents with Me; Everyone in SEO Should See Them – SparkToro and How independent websites are dealing with the end of Google traffic – The Verge

CHARLOTTE TILBURY CELEBRATES A YEAR IN GAMING • Women in Games

The Problem With Behavioral Nudges | WSJ

Touchpoints and the Omnichannel Revolution | BCG

Marketers’ Meta habit is reshaping the ad industry | WARC

Bank on it: Financial media networks are the next big opportunity – The Media Leader

Fan Bingbing tasked by Malaysia’s Melaka to lure in 1 million Chinese tourists | South China Morning Post

Mat Baxter’s Huge turnaround job | Contagious – interesting perspective on his time at Huge. What I can’t square it all with is what we know about marketing science and declining effectiveness across digital media

Celebrate the Unique Ways You Listen With ‘My Spotify’ — Spotify – a judo move on the sinister nature of algorithms in consumers lives

On my LinkedIn, I couldn’t escape from the Cannes festival of advertising. Partly because one of the projects I had been involved in was a shortlisted entry. One of the most prominent films was Dramamine’s ‘The Last Barf Bag: A Tribute to a Cultural Icon’. It was notable because of its humour, which was part of this years theme across categories.

Materials

Renewcell secures a future | Vogue Business – manufacture a fibre that uses recycled cotton instead of wood pulp in viscose

震災復興から生まれた刺し子プロジェクトをブランドに！ 15人のお母さんの挑戦！　 – CAMPFIRE (キャンプファイヤー) – ancient Japanese craft – KUON and Sashiko Gals are part of a new generation of designers keeping the traditional Japanese technique of sashiko alive. And together, they are bringing the decorative style of stitching to our favorite sneakers (including techy Salomons!). Sashiko is a type of simple running stitch used in Japan for over a thousand years to reinforce fabrics. It’s typically done with a thick white thread on indigo fabric and made into intricate patterns.

Media

The new dot com bubble is here: it’s called online advertising – The Correspondent – old article but useful in the way it calls BS on much of the cheerleading for online advertising.

The Epoch Times faces a federal money laundering indictment : NPR

Canon made a special lens for the Apple Vision Pro’s spatial videos – The Verge

Pinterest ads set for 17.1% growth to reach $4.2bn next year | WARC | The Feed

Streamers like Netflix, Max, and Peacock are raising prices — here’s why | Yahoo! Finance and The Dream of Streaming Is Dead – The Atlantic

The Rot-Com Bubble | Ed Zitron

CEOs Go to War Against Creatives – by Ted Gioia

Meet AdVon, the AI-Powered Content Monster Infecting the Media Industry

DVD special features draw fans back to physical media. | Slate – a digital roadmap for streaming services and also shows the power of physical artefacts

Adtech vendors join forces for European Programmatic TV Initiative – The Media Leader

The New York Times And Instacart Integrate For Shoppable Recipes | AdExchanger

Online

Apple set to be first Big Tech group to face charges under EU digital law | FT – interesting that they are going after Apple first. Japan moves the same way: Japan law forces third party App Stores on Apple & Google | Apple Insider

Labour raced to outspend Tories online before spending caps kicked in | FT

Nationalism in Online Games During War by Eren Bilen, Nino Doghonadze, Robizon Khubulashvili, David Smerdon :: SSRN – We investigate how international conflicts impact the behavior of hostile nationals in online games. Utilizing data from the largest online chess platform, where players can see their opponents’ country flags, we observed behavioral responses based on the opponents’ nationality. Specifically, there is a notable decrease in the share of games played against hostile nationals, indicating a reluctance to engage. Additionally, players show different strategic adjustments: they opt for safer opening moves and exhibit higher persistence in games, evidenced by longer game durations and fewer resignations. This study provides unique insights into the impact of geopolitical conflicts on strategic interactions in an online setting, offering contributions to further understanding human behavior during international conflicts.

The Internet: Now you see it, now you don’t

Bumble buys community building app Geneva to expand further into friendships | TechCrunch

TikTok ‘law violations’ complaint referred to US justice department | FT

Gambling addiction’s growing grip on the frontlines – ripping through Ukrainian armed forces and causing havoc at home

Retailing

Sellers Call Amazon’s Buy Box ‘Abusive.’ Now They’re Suing | WIRED

eBay will no longer accept American Express cards over ‘unacceptably high’ fees – The Verge

McDonalds removes AI drive-throughs after order errors – BBC News

Security

Huawei exec concerned over China’s inability to obtain 3.5nm chips, bemoans lack of advanced chipmaking tools | Tom’s Hardware – this is rather different to the picture that The Economist portrays of an all-conquering Huawei: America’s assassination attempt on Huawei is backfiring | The Economist

The Stanford Internet Observatory is being dismantled | Platformer

The West Coast’s Fanciest Stolen Bikes Are Getting Trafficked by One Mastermind in Jalisco, Mexico | WIRED – “Not so long ago, bike theft was a crime of opportunity—a snatch-and-grab, or someone applying a screwdriver to a flimsy lock. Those quaint days are over. Thieves now are more talented and brazen and prolific. They wield portable angle grinders and high-powered cordless screwdrivers. They scope neighborhoods in trucks equipped with ladders, to pluck fine bikes from second-story balconies. They’ll use your Strava feed to shadow you and your nice bike back to your home.” – not terribly surprising, you’ve seen the professionalisation and industrialisation in theft across sectors from shoplifting, car theft and watch thefts so this is continuing the trend.

Fortinet Acquires Lacework | Forrester Research – looks like its a move to prevent supply chain hacks.

China’s Nvidia Loophole: How ByteDance Got the Best AI Chips Despite U.S. Restrictions — The Information – interesting that Oracle have been caught sanction busting and Chinese firms building US data centres that Nvidia can shop to.

West grapples with response to Russian sabotage attempts | FT

“Everyone is absolutely terrified”: Inside a US ally‘s secret war on its American critics – Vox – Indian black ops in the US and Canada

NVIDIA technology found in Russian military drones | Defence Blog

Armed gangs stage bank heists in Gaza | FT

Software

What’s going on with AI in Sequoia? – The Eclectic Light Company

Google AI Gemini parrots China’s propaganda – by Wenhao Ma

Apple Intelligence for iOS 18 is here. But can Apple beat AI rivals? | Quartz

Anthropic course on Claude generative AI · GitHub

Consumer Trends unveils the AI-Powered Future – Ericsson – god this is dark.

Aptoide’s iOS game store launches on Thursday – The Verge

The Top 100 Gen AI Consumer Apps | Andreessen Horowitz

Which media companies have made deals with OpenAI? and Media Companies Are Making a Huge Mistake With AI – The Atlantic – sold themselves cheap.

Microsoft can remember it for you wholesale – net.wars and Windows 11 Recall AI feature will record everything you do on your PC | BleepingComputer

Apple plots creating AI ‘black box’ for iCloud | AppleInsider

Future of Software development/SDLC with AI and Gen AI | Forrester Research

OpenAI Just Gave Away the Entire Game – The Atlantic – The Scarlett Johansson debacle is a microcosm of AI’s raw deal: It’s happening, and you can’t stop it. This is important not from a technology point of view, but from the mindset of systemic sociopathy that now pervades Silicon Valley.

Goldilocks Agents | Sequoia Capital – the quickening evolution of more capable and reliable AI agents.

Apple Intelligence is Right On Time – Stratechery by Ben Thompson – Apple’s orientation towards prioritizing users over developers aligns nicely with its brand promise of privacy and security: Apple would prefer to deliver new features in an integrated fashion as a matter of course; making AI not just compelling but societally acceptable may require exactly that, which means that Apple is arriving on the AI scene just in time.

Style

Can the runaway Hoka boom last? FT

‘Rare, vintage, Y2K’: Online thrifters are flipping fast fashion. How long can it last? | Vogue Business – as secondhand shopping becomes increasingly commonplace, this latest outburst brings to light the subjectivity of resale. What determines an item’s worth, especially in an age of viral micro-trends and heavy nostalgia? Is it ethically moral to set an item that’s the product of fast fashion — long criticised for not paying workers fairly — at such a steep upcharge, and making profit from it? If someone is willing to pay, does any of it matter?

Tools

YouTube Channel Statistics – ViewStats

Web of no web

HyperCinema | Hyper-personalized AI experiences for global attractions – although this is aimed at shopping mall events and theme parks, I could also see it being used in B2B contexts at trade shows and conferences.

Congress unconvinced by Space Force GPS resiliency plan • The Register
June 23, 2024
Chinese Antitrust Exceptionalism

Chinese Antitrust Exceptionalism by Angela Zhang sounds exceptionally dry to the uninitiated. Zhang is a senior legal academic who works at the University of Hong Kong, which until recently got a front row seat to China disputes with both the European Union and the United States. Given the recent changes in Hong Kong where she lives, we may not see as frank a book of its quality come out of Hong Kong academia again on this subject matter if it was viewed to fall under the purview of ‘state secrets’. With the new security law that has come in, definitions have been left deliberately vague and wide-reaching.

So why is Chinese Antitrust Exceptionalism of interest?

If like me, you’ve worked on brands like Qualcomm, Huawei or GSK you realise how much of an impact China’s regulatory environment can have on your client’s success. Around the time I worked on one client, they were shamed on the evening TV news and some of their staff disappeared for questioning by the authorities. They then reappeared months later looking haggard and worn out. It is new important for everything from technology to the millions of COVID deaths that happened in China due to a lack of effective vaccines.

Zhang breaks down the history of China’s antitrust regulatory environment, how it works within China’s power structures and how it differs from the US model. The rise of antitrust was as much down to bureaucratic politics of the Chinese government.

What becomes apparent is that Chinese power isn’t monolithic and that China is weaponising antitrust legislation for strategic and policy goals rather than consumer benefit.

Zhang talks about how regulatory hostage taking and public shaming was a tool of the regulatory authorities from early on.

The book then looks at foreign reactions to Chinese government from EU investigations to current US-China trade restrictions and discusses how China weaponised its regulatory frameworks making ‘hostage taking’ trans-national in nature.

Last of it’s type?

Zhang’s book won awards when it first came out in 2021, and is still valuable now given the relatively static US-China policy views. More on Chinese Antitrust Exceptionalism here. More book reviews here.

April 20, 2024
Boutique e-tailers
The luxury sector is undergoing a transformation, and nowhere is that more apparent than in the world of boutique e-tailers. I am of a generation that grew up with boutiques, carefully curated fashion looks from multiple brands.

TAKA@P.P.R.S

Exclusive

As a child, my Mam would get me jumpers as I grew up from different small stores like this. To this day, the ultimate compliment she would give any item of clothing was that it was ‘exclusive’.

As I started buying my own clothes I pivoted between sports shops for my footwear, Ellis Brigham for layers, Caran D’Ache – a menswear boutique in Birkenhead at the time for jeans and ‘going out’ clothing. (Having known the owner/manager quite well, I suspect that the store was named after the Swiss writing instrument company, rather than the pseudonym of French satirist Emmanuel Poiré). This was where I got my first down jacket (by Naf Naf), Oshkosh B’gosh dungarees and Champion sweatshirts. At the time Ellis Brigham was a sea of Polartec and Gore-tex with no down jackets in sight.

I started venturing further afield and went to Quiggins in Liverpool, Affleck’s Palace in Manchester and what’s now the Victoria Quarter in Leeds. I’d also started coming down to London with friends to find brands I couldn’t get at home.

Famous high-end boutiques like Browns built a reputation for championing up and coming womenswear designers like Hussein Chalayan and Alexander McQueen. They also helped the likes of Ralph Lauren, Jil Sander and Calvin Klein start seeing in London. At their best boutiques moved culture as curators and taste makers. I got my love of American workwear from Caran D’Ache and Japanese streetwear from the late lamented Hideout which was just off Golden Square.

Department stores were the first aggregators of boutiques with a mix of single brand and multi-brand concessions under one roof. Brands like Selfridges, Harvey Nichols, Isetan, Lane Crawford, Mitsukoshi, Neiman Marcus, Saks Fifth Avenue, SEIBU and Shinsegae.

These established businesses have their place, indeed LVMH owns a number of selective retail businesses like DFS (often known as T Galleria), Le Bonne Marché and Starboard Cruises. So multi-brand distribution has a place in the luxury retail mix. Over time the premium department store brands and LVMH’s select retail brand would both have boutique e-tailers within their brands providing an omni-channel experience.

In the run up to COVID, multi-brand retail counted for 57 percent of luxury sales, management consultancy Bain expect this to decline to 36 percent of luxury sales by 2030.

Online

Online continues to disrupt retailing over a quarter century after it landed. The first casualties were book stores and music stores. Twenty years ago, one of the most enjoyable activities that I did in my spare time was rifling through record store shelves, digging for surprising or elusive vinyl records, CDs and DVDs.

Some of the places were I did this are long gone, like Tower Records in Piccadilly Circus. On the flipside, new businesses sprang up to be online first, or online only. Amazon started as a book store and eventually became the modern-day equivalent of the Sears Roebuck catalogue.

Luxury was no exception and a variety of dedicated boutique e-tailers sprang up:
- Matches
- MyTheresa
- Net-a-Porter
- YOOX
- Farfetch
In the same way that mobile operators were the key determinators of whether mobile phone shops were successful, luxury brands had the whip hand over multi-brand boutiques. Phones4U died when its relationships with EE and Vodafone came to an end. The FT article T he implosion in luxury ecommerce implied a similar pivotal moment between Farfetch and Kering, but with Farfetch managing to sell itself to Korean e-tailing business Coupang instead of going into administration.

One brand / one store

Luxury brands have looked to gain more control over their customer experience and get closer to the customer overall. This has seen many brands open single brand stores. Up until the 1980s, Louis Vuitton sold mostly through department stores, now it’s mostly through its own brand channels. Some brands like Audemars Piaget, now only sell through their own single brand showrooms.

The big name department stores continued to hold a position in the marketplace due to their own brand power, even while smaller mid-market stores in provincial cities folded.

Over time, brands extended their shop front into the online sphere. This was done once two things were able to happen:
- An all-up online and offline view of a given customer and CRM systems allowed this to happen. This wasn’t for efficiency reasons to go online only, but to provide an omnichannel service to match customer’s omni-channel lifestyles.
- Getting this all-up view will also help with future EU legislation moving towards a circular economy.
- The ability to provide a high level delivery experience for online purchases. This mattered less with fragrances than it did with watches and handbags. High security logistics providers like Ferrari were able to provide this to the main luxury brands.
One small chink of hope for multi-brand stores is that single brand stores may be forced to either change business practices, or insulate themselves from legal action via authorised dealerships. A court case brought by two women against Hermés in the US claims that having to buy other products to get a crack at purchasing a Birkin bag is a violation of antitrust laws.

The obligation to buy other products first, is what the women claim is an ‘illegal tying arrangement’ which is why Hermés might be in violation of antitrust laws. Other brand who have authorised dealers rather than their own showrooms are less likely to be at risk.

Compressed middle-class

One of the first things that I learned when doing LVMH’s INSIDE LVMH certificate was that the bulk of luxury purchases are made by the middle classes.

Robert Gordon’s Rise and Decline of American Growth outlined how the middle classes in America (but also many other western countries). Income inequality, automation and globalisation drove a stagnation and decline in middle class numbers, even as the number wealthy increased.

Globalisation elevated a new middle class in Asian countries like Japan, Korea, Hong Kong, Taiwan and Thailand. Energy drove middle class growth in the countries surrounding the Persian gulf and Nigeria. Louis Vuitton opened their first show rooms in the US in 1914, in Japan in 1978 (though department stores had been selling their products for years). The first Korean shop opened in 1984 and China eight years later.

Over the past few decades this was compensated by new middle classes growing. They don’t necessarily have the earning power of a middle class westerner, but the purchasing power level may vary considerably. So a middle class consumer in a country like Thailand, Malaysia or Singapore might have more disposable income than someone in the UK.

Japan’s middle class quickly reached stagnation due to the lost decades of economic growth after their 1989 asset bubble. Korea has gone through a similar challenge, it has seen raised consumption, but recently this is driven by household debt rather than prosperity.

China

Quantity is a quality of its own, which is a reason why Chinese consumers have been so important to luxury brands since the early 2000s when China joined the WTO and its economy took off. Once there was even a small growth in middle class numbers that represented a big increase in global luxury sector sales. The decline in economic growth due to the property sector bubble has dampened luxury sales to China. It is not only about the decline in ability to purchase, but also the decline in being seen to purchase western luxury goods.

This less conscious consumption started early on during the Xi administration’s desire to combat corruption and aspire to a more equal society. Gifting declined. Economic decline accelerated this Chinese macro-trend.

COVID and after

COVID changed consumption. Money that would have previously been spent on experiences such as restaurant meals or travel transferred into things. Both single brands and boutique e-tailers got a lift in this environment. But a wider economic effect is still working its way through the economy. This effect is known as the bullwhip or Forrester Effect.

This resulted in a number of economic distortions:
1. Partial shutdown – Consumers no longer went to work or high traffic retail hotspots. Non-essential workers didn’t go to work. Logistics systems buckled under the weight of packages and luxury businesses diverted production to support medical needs such as LVMH’s perfumes businesses making hand sanitiser.
2. Unusual increase in demand – Home working drove an increase in demand from media consumption and home improvement to buying more stuff from all that money they saved from not going out.
3. Supply chain disruption – Air cargo prioritised medical supplies while existing stock sat in empty shops.
All of this disruption which drove inflation, this reduced demand as consumers had less to spend.

Luxury brands focused on their inflation proof ultra-high net worth customer base and raised prices to compensate for the reduction in sales volume. The fight for that reduced volume pitched multi-brand boutique e-tailers against their suppliers and the results weren’t pretty.

Boutique e-tailers are going to the wall, or consolidating to weather the fiscal storm until such time as middle class consumers can start spending aspirationally again.

Some of these businesses can’t be saved. Matchesfashion, which was bought out by Frasers Group didn’t have much chance.

You can find similar posts here.

More information

The implosion in luxury ecommerce | FT

Case Study | Selling Luxury to the 1% | BoF

Matchesfashion axes half its staff after going into administration | FT

Harvey Nichols staff face redundancies as it eyes return to profitability – Retail Gazette

LVMH-Backed Luxury Watch Site Hodinkee Cuts a Fifth of Jobs – Bloomberg

Who Gets to Buy a Birkin Bag? | BoF

The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (The Princeton Economic History of the Western World) by Robert J. Gordon

Canada Goose is cutting 17% of its corporate staff | Quartz

What’s up with 10-year-old kids in Sephora? Why the question itself is driving controversy | CBC News

US Luxury Purchases Fell 15 Percent in February, According to Citi Credit Card Data | BoF

Why Frasers Group Shuttered Matchesfashion | BoF
April 17, 2024
Y2K
Early last year, fashion started to pillage the late 1990s and early 2000s for fashion inspiration, which became a Y2K trend on social platforms and in the fashion media. But this divorced Y2K from its original meaning. Y2K was technologist short hand for a calendar problem in a lot of legacy systems that were designed around a two digit date for years.

The rise of micro-processors had meant that the world had more computers, but also more computer control of processes from manufacturing to building air conditioning systems.

The HBO documentary Time Bomb Y2K leaned into the American experience of Y2K in an Adam Curtis type archival view, but without his narrative.

Millennium layers

There was so much to unspin from the documentary, beyond the Y2K bug, including the largely alarmist commentary. The run-up to the millennium had so many layers that had nothing to do with Y2K, but were still deeply entwined with anxiety around what might happen with Y2K.

This included:
- Internet adoption and more importantly the idea of internet connectedness on culture through the lens of cyberpunk – which in turn influenced the spangliness of fashion around this time and the preference for Oakley mirror shades that looked as if they were part of the wearer. The internet was as much a cultural construct and social object as it was a communications technology. It memed AND then got people online.
- Telecommunications deregulation. In the United States the Telecommunications Act of 1996, saw a levelling playing field be set out and allow for new entrants across telecoms networks to television. They also defined ‘information services’ which internet platforms and apps fitted into giving them many freedoms and relatively few responsibilities. You had similar efforts at telecoms deregulation across what was then the EEC. This saw a rise in alternative carriers who then drove telecoms and data commuunications equipment sales, together with a flurry of fibre-optic cables being laid. There was a corresponding construction of data centres and ‘internet hotels‘ to provide data services. With these services came an expectation that the future was being made ‘real’. Which in turn fed into the internet itself as cultural phenomenon. The provision of new data centres, opportunities for computer-to-computer electronic data interchange (EDI) and services that can be delivered using a browser as interface also drove a massive change in business computing.
- An echo boom of the hippy back to the land movement, many of the people involved in that movement were early netizens. Hippy favourites The Grateful Dead had been online since at least 1996 and were pioneers in the field of e-commerce. The Whole Earth ‘Lectronic Link (or The WeLL) had founders from hippy bible The Whole Earth Catalog. There was also a strong connection through Stewart Brand to Wired magazine. Long time ‘Dead lyricist Jon Perry Barlow created a Declaration of the Independence of Cyberspace – a libertarian totem for netizens up to the rise of social media platforms like Facebook.
- Millennial religious fervour. The Heaven’s Gate cult committed ritual suicide in 1997, and even posted about it on their website. The disastrous FBI showdown with the Branch Davidian cult in Waco, Texas had happened four years earlier and even today is a point of discussion amongst right-leaning Americans.
The confluence of noise around Y2K drove some anxiety and a lot of media chatter.

Advertisers did their bit to fuel insecurities as well.

However by October 1999, American consumers who responded to a poll by the Gallup Organisation were pretty confident that glitches would be unlikely
- 55% considered it unlikely ATMs would fail.
- 59% believed direct deposit processing wouldn’t be a problem.
- 60% said they felt that temporary loss of access to cash was unlikely.
- 60% believed credit-card systems were unlikely to fail.
- 66% felt that problems with check processing were unlikely.
- 70% had received Y2K-readiness information from their banks.
- 90% were confident their bank was ready for Y2K.
- 39% said they would definitely or probably keep extra cash on hand.
Y2K: More Signs of the Time | Computerworld (January 10, 2000)
Experts had felt that the Y2K challenge had largely been beat, but some prudent advice was given. I worked for a number of technology clients at the time including telecoms provider Ericsson and enterprise software company SSA Global Technologies. I had to keep my cellphone with me in case anything went wrong and we would have to go into crisis mode for our clients. Needless to say, I wasn’t disturbed during my night out at Cream by THAT call.

Technology experts like Robert X. Cringely were rolled out to advise consumers on prudent precautions. Have a bit of cash in your wallet in the unlikely event that card merchant services don’t work at your local shop. Have some provisions in that dont need refrigeration in case there is a power cut. And a battery or solar powered radio just in case.

All of these are still eminently sensible precautions for modern-day living.

Why were we ok?

The warning

There were several people who voiced warnings during the 1990s. Some of the most prominent were Ed Yourdon and Peter de Jager.

Risk management

During the 1990s company auditors were informing boards that they had to address Y2K. Failure to follow this would affect their ability to trade. Their public accounts wouldn’t be signed off and there would be implications for the validity the insurance policies need to run a business.

Approaches

IT professionals took Y2K very seriously, which meant that there was little to no impact. Some academics such as UCL’s Anthony Finkelstein posited that the problem was taken too seriously, though it is easier to say that in retrospect. There were a number of approaches taken to combat the risk of failure due to Y2K. In order of least to most ambitious they were:
- Systems testing
- Rip and replace
- Recode
Systems testing

The Russian military had tested their systems for vulnerability to the millennium bug and announced this in the last quarter of 1999. Meanwhile businesses were often passing the testing out to contractors like Accenture with teams based in India, the former Soviet Union or the Philippines. There was a thriving market for auditing software to check if applications used two-digit dates or not. One of these was Peregrine Systems ServiceCenter 2000 Y2K Crisis Management software.

Testing highlighted problems at Oak Ridge Laboratories who process American nuclear weapons, the alarm systems at Japanese nuclear power stations and some kidney dialysis machines.

Problems would then be addressed by ripping and replacing the systems or recoding the software.

Rip and replace

Apple used Y2K as a sales tool to get Macs into businesses, including this campaign from early 1999 where the HAL computer from 2001: A Space Odyssey featured in Apple’s Super Bowl advert.

Two years earlier IBM CEO had the company re-orientate an offering that he called e-business. There was snazzy advertising campaigns ran over an eight year period.

Mainframes and high powered UNIX workstations became internet servers running multiple instances of Linux. IBM Consulting learned as they went building the likes of internet retailer Boxman (which would go bust due to IBM’s cack-handed software and the rise of Amazon).

Timely replacement of business systems with e-business systems, paired with new personal computers like the latest Apple Mac allowed the firm to avoid Y2K and make speedier approaches in digitising their businesses.

German enterprise software company SAP launched SAP Business Connector in association with webMethods in 1999, this provided an integration and migration layer for SAP and other business software applications. It also allowed the business software to be accessed using a web browser and for it to trigger business processes like email updates.

Articles (like Robertson & Powell) highlighted the wider business process benefits that could be generated as part of a move to rip-and-replace existing systems with ones that are Y2K compliant. Reducing the amount of systems in place through rationalisation as part of Y2K preparation would then provide benefits in terms of training and expertise required.

Recode

Where rip and replace wasn’t an option due to cost, complexity or mission criticality recoding was looked at as an approach. For PC networks there were a few off the shelf packages to deal with low level BIOS issues

IntelliFIX 2000 by Intelliquis International, Inc. Their product would check hardware, DOS operating system, and software. This version was free and ran a pass/fail test. The full version, which could be purchased for $79, would report the issues and permanently correct date problems with the BIOS and the CMOS real-time clock. In 1999, Stewart Cheifet of the Computer Chronicles rated the product as a very good all-in-one solution for hardware and software.
National Museum of American History: Y2K collection

Products similar to IntelliFIX included Catch/21 by TSR Inc.

Longtime software makers like Computer Associates and IBM provided large companies with tools to audit their existing code base and repair them. IBM’s software charged $1.25 per line inspected. OpenText estimate that there 800 billion lines of COBOL language code out there. So having one of these tools could be very lucrative at the time.

You might have mainframe code on a system that might not have been altered since the 1970s or earlier. Programmers in the developed world who had skills in legacy languages were looking at the end of their career as more of this work had been outsourced to Indian software factories saw Y2K as a last hurrah.

COBOL is still very robust and runs business processes very fast, so is maintained around the world today.

Y2K impact

Professor Martyn Thomas in a keynote speech given in 2017 documented a number of errors that occurred. From credit card reading failures and process shut downs to of false positive medical test results across the world. But by and large the world carried on as normal.

Academic research (Anderson, Banker et al) suggests that the most entrepreneurially competitive companies leaned hard into the Y2K focus on IT and used the resources spent to transform their IT infrastructure and software. Garcia and Wingender showed that these competitive returns were shown to provide a benefit to publicly listed company stock prices at the time.

There were also some allegations that software companies and consultants over-egged the risks. Hindsight provides 20:20 vision.

IT spending dropped dramatically during 2001 and 2002, and by the middle of 2003 technology started to see replacement of software and equipment bought to address Y2K. But the US department of commerce claimed that was no more than a transient effect on economic growth. This was supported by the Kliesen paper in 2003, which posited that the boom and subsequent economic bust was not as a result of Y2K preparation.

More information

Like It or Not, Gaudy Y2K Style Is Roaring Back | Vogue

These Celebrity Y2K Outfits Weirdly Look Like They’re From 2023 | InStyle magazine

20 Years Later, the Y2K Bug Seems Like a Joke—Because Those Behind the Scenes Took It Seriously | Time magazine (December 30, 2019)

National Museum of American History – Y2K collection

Y2K: a retrospective view by Anthony Finkelstein (PDF)

Y2K: Myth or Reality? Luis Garcia-Feijóo and John R. Wingender, Jr.
Quarterly Journal of Business and Economics (Summer 2007)

Replacing Y2K technology boosts spending | The Record (July 28, 2003)

Y2K spending by entrepreneurial firms by Mark C. Anderson, Rajiv D. Banker, Ram Natarajan, Sury Ravindran US: Journal of Accounting and Public Policy (December 2001)

Exploiting the benefits of Y2K preparation by Stewart Robertson and Philip Powell (September 1999) Communications of ACM

Was Y2K Behind the Business Investment Boom and Bust? Kevin L. Kliesen

What Really Happened in Y2K? Professor Martyn Thomas (April 4, 2017) (PDF)
February 20, 2024