Looking back to when I started this blog, it would have been reasonable to expect an inevitable march of retailing from offline to online. Amazon was on a tear and search advertising volumes were increasing year on year. By the time I was at Yahoo! search advertising (focused on online retailing) counted for about half of all revenue for the company.
At that time Yahoo! had a Spotify-like subscription streaming music service that was viewed as a threat to Apple’s iTunes download only offering. When I worked there Yahoo Music was the number one online music site in terms of audience reach and total time spent by consumers on the site. Also display advertising was much bigger for brands than it is today and Yahoo! was guaranteed a good share of the online marketing spend from any movie launch at the time.
The reality of online retailing, was slower than our expectations. While COVID drove an increase in online retailing there has also been corresponding innovations in retailing as well.
Amongst the pioneers in this change have been luxury brands like Burberry and Nike, who brought digital into their stores to provide a superior customer experience.
Adidas brought manufacturing into its stores with its speedfactory experiment, allowing for fast time to market and customisation.
Supreme changed the cadence of retailing with the Thursday morning ‘drop’ which saw queues outside stores. Every Thursday became a launch day as far as their customers where concerned. The queue has moved from Apple’s annual cadence, to every week.
Why talk about delivery services? On the days that I go into office I am reminded of the late 1990s and 2000 with online services marketing, in particular delivery services. The Super Bowl advertising had a plethora of online businesses, Coinbase’s QRcode ad will likely be the Pets.com sock puppet of 2022. (The reason why online businesses are on TV is that it represents the lowest cost per reach for effective brand awareness of any medium, including digital channels).
https://youtu.be/0XXPKvbNr8o
Growth hacking
We also saw a resurgence in growth hacking, trying to get consumers to go from ‘I’ve never heard of you’ to app download as fast as possible. Which usually means thrusting a leaflet with a QRcode into my hand as I leave the tube station on my way home most week day evenings. A lot of these apps are delivery services.
Here’s a list of the on-demand delivery services that have been promoted to me so far:
Getir – I had a leaflet from Getir one time at the the tube station. It’s purple and yellow brand colours caught my attention because it immediately reminded me of vintage Yahoo! I threw the leaflet in the recycling and paid no more attention until ‘Taxi-gate‘. The company alleged that their agency partner didn’t buy enough taxi advertising for their brand and instead bought advertising for other delivery services. I didn’t realise until I started researching this post that Getir was founded in 2015 by a team in Turkey.
Uber Eats – Uber Eats had already established itself as a restaurant delivery service to rival Deliveroo and Just Eats. It has also pivoted into grocery deliveries over the past couple of years in my neighbourhood. I would get emails and mailouts from my credit card company with a discount code for use the first time I grocery shopped on Uber Eats.
Deliveroo – Like Uber Eats Deliveroo had already established itself as a restaurant delivery service and expanded into grocery delivery services as well. I had them actively promoted to me via email, as I had used Deliveroo in the past
Ocado – This spring Ocado started promoting Ocado Zoom to me promising deliveries of a limited amount of products within two hours of order
Gorillas – Gorillas is a Getir analogue that was founded in Germany and launched in 2020. I got a number of leaflets from them, they were the most frequent leaflet that I received on my way out of the tube station. The logo was distinctive, but that’s all I could remember about it.
Kozmo.com
Kozmo.com could be considered to be the American dot com ancestor of online delivery services. Kozmo.com was the brainchild of two investment bankers in the US. It was launched in 1998 serving areas of New York. In July 2000, at the height of its business, the company operated in selected areas of Atlanta, Chicago, Houston, San Francisco, Seattle, Portland, Boston, New York, Washington, D.C., San Diego and Los Angeles. It was popular with young professionals and college students, in the areas that it served. But despite the delivery service’s careful choice of markets served, it didn’t survive the dot.com bust going under in April 2001. While the business had filed for an IPO, it never actually went public.
Economic circumstances
The UK is likely to be heading into a recession that will be harder and longer than our near peers. There is an inflation and commodity pricing storm that has caused a cost of living crisis currently dominating the political agenda and rising interest rates.
We know from businesses like Uber and Kozmo.com that delivery services are a low margin business at the best of times. We could be staring into another online business bust. This time it will be driven by a wider economic crisis rather than the precipitating incident, but the effect will be the same. Retail investors including pension fund savers will suffer.
It feels that we forget history and are doomed to repeat it. Yes smartphones made ordering more convenient than dial-up, but it still didn’t change the essential business model for these delivery services. These businesses relied on cheap money to burn through in the hope of eventually getting profitable. In this respect it reminds me of the dot.com startups that I used to meet at the start of my agency life who talked about not worrying too much about profitability, but about trying to move at ‘internet speed‘. We’ve already seen this kind of thinking at WeWork and other Softbank businesses.
History is destiny; if we fail to learn the appropriate lessons from it.
NASA’s administrator says cost-plus is a “plague,” just as DoD is giving up on fixed-price development | Acquisition Talk – this reminds me so much of the UK’s ministry of defence. My Dad moved over to the UK to work on the Resolution class of submarines that were designed to carry the Polaris nuclear missile. At the time the Royal Navy paid for these submarines on a cost plus basis which meant that the shipyard advertised for tradesmen in newspapers in Ireland and across the Commonwealth. A lot of people spent a lot of time drinking tea and claiming overtime. One can understand why cost plus could be seen as a plague.
However bad cost plus is, fixed cost doesn’t seem to work either with failed projects and strong disincentives to try innovative solutions. Where NASA is at the moment I can understand why fixed price makes more sense than cost plus. But high innovation programmes like Ares or the Apollo programme would do better under cost plus. One of the current best arguments for cost plus is the likelihood that the Ajax armoured vehicle will never be issued. It is a ‘firm priced’ meaning fixed price contract. Crossrail looks more like a cost plus project, it was a mess, it cost way too much, but it runs. I wonder if the UK ministry of defence will ever consider cost plus again?
Opinion | Boris Johnson Is in Trouble, and So Is Britain’s Conservative Party – The New York Times – First through austerity, then through Brexit and Mr. Johnson, the Conservatives have left Britain in the ruins of their ambition. Each one of their proposed solutions, offered in the name of national renewal, has made the situation worse. No one in the party can escape blame for this baleful legacy. One of the pretenders to Mr. Johnson’s throne — Rishi Sunak, Liz Truss or Jeremy Hunt — may offer a change in style. But a substantial change of course is unlikely to come. An economy predicated on low productivity and low investment, buttressed by a self-defeating lack of seriousness about Britain’s condition, is all the Conservatives seem to be able to offer.– Worthwhile reading in association with this: Grim times lie ahead for UK as inflation combines with low growth | Financial Times
Russian emails appear to show ‘network’ holding $4.5bn assets linked to Putin | Russia | The Guardian – An anti-corruption expert in Russia, who requested anonymity given the political situation in Moscow, said the findings raised questions as to whether there was a level of “common management”. “LLCInvest looks most of all like a cooperative, or an association, in which its members can exchange benefits and property,” they suggested. For nearly two decades, Putin has been accused of secretly accumulating vast wealth through proxies, fuelled by a series of disclosures in leaks such as the Pandora papers about the fortunes of those closest to him. Sergey Kolesnikov, a businessman, claimed 10 years ago that he had been behind a scheme that allowed a group of Russia’s top oligarchs to pool billions of rubles into a type of “investment fund” for the benefit of Putin, who was then serving as prime minister. The claims were denied and Kolesnikov fled from Russia. – Interesting how this has been set up
It’s time for data-first diversity, equity, and inclusion | Fortune – In 2010, using nationally representative data on thousands of individuals in their 40s, I estimated that Black men earn 39.4% less than white men and Black women earn 13.1% less than white women. Yet, accounting for one variable–educational achievement in their teenage years––reduced that difference to 10.9% (a 72% reduction) for men and revealed that Black women earn 12.7 percent more than white women, on average. Derek Neal, an economist at the University of Chicago, and William Johnson were among the first to make this point in 1996: “While our results do provide some evidence for current labor market discrimination, skills gaps play such a large role that we believe future research should focus on the obstacles Black children face in acquiring productive skill.”
Incoming Hong Kong leader John Lee unveils team, while Beijing lays out key expectations | South China Morning Post – John Lee pledges to win people’s trust and make policies that meet demands as State Council approves his governing team. Hong Kong and Macau Affairs Office lays out five expectations for incoming administration, including tackling housing and addressing wealth gap – this explains the big gaps in Lee’s previous policy document. What’s less apparent is how Lee will deliver on these intractable challenges when every previous chief executive haven’t managed to address them
Edelman Launches Global Gen Z Lab | Edelman – Today, Edelman announces the formation of The Gen Z Lab, a global offering comprising 100 Gen Z employees, a roster of internal and external on-call advisors, and data hub dedicated to generational insights. Under the watch of Edelman’s Global Chief Brand Officer, Jackie Cooper, the Gen Z Lab will lend expertise, perspective and counsel clients looking to effectively engage the Gen Z consumer. In a breakthrough move, Edelman is also appointing the world’s first ZEO as a cultural and creative advisor for the Gen Z Lab. Stepping into this inaugural consultative role from July 1st, will be gender fluid fashion designer, Harris Reed. He will be supported by Amanda Edelman as Gen Z COO. The Gen Z Lab will harness their generation’s perspective and ambitions to solve issues such as race and diversity, sustainability, and climate change, and align with brand interests to become catalysts for change. – I’d totally trust them managing my brand reputation…………….. NOT!
Meta’s new digital fashion marketplace will sell Prada, Balenciaga and Thom Browne | Vogue Business – Balenciaga CEO Cédric Charbit in a release. “Web3 and Meta are bringing unprecedented opportunities for Balenciaga, our audience and our products, opening up new territories for luxury.” Balenciaga, along with Prada and Thom Browne, is among the first to sign on to sell digital fashion in a new Meta-created avatar store where people can buy clothing for their avatars to wear on Instagram, Facebook and Messenger. Eventually, other designers will be able to independently offer digital clothing for sale in the marketplace. The items for sale in the avatar store will range from $2.99 to $8.99 to start. A Meta spokesperson said that it did “not have details to share” on if or how it would share revenue with designers. Meta CEO Mark Zuckerberg and Instagram VP of fashion partnerships Eva Chen, who announced the updates via Instagram Live on Friday, said these capabilities will be available next week, starting with the US, Canada, Thailand and Mexico. – Worthwhile reading this piece also: Inside The Metaverse Strategies Of L’Oréal And LVMH | The Drum
What Chinese media reveals about Shein’s secretive operations – Rest of World – There are two main kinds of suppliers: “free on board,” those that make simple designs they haven’t devised themselves, and “original design manufacturers,” those that do both. They all feed into Shein’s sprawling manufacturing execution system (MES). The designer-suppliers will find pictures online and send a selection to Shein’s internal buyers for consideration; the buyer and their manager settle on a final pool. Once samples have been received, there might be two, or even three, rounds of changes before manufacturing can commence. (The entire time, everything needs to be recorded in the MES — materials, pricing, even chat logs — something suppliers balk at, because, if the deal falls through, all the information sits in Shein’s records, and there’s nothing to stop them from producing it elsewhere.) – I could see Amazon acting in a similar way
China’s Expanding Surveillance State: Takeaways From a NYT Investigation – The New York Times – DNA, iris scan samples and voice prints are being collected indiscriminately from people with no connection to crime. The police in China are starting to collect voice prints using sound recorders attached to their facial recognition cameras. In the southeast city of Zhongshan, the police wrote in a bidding document that they wanted devices that could record audio from at least a 300-foot radius around cameras. Software would then analyze the voice prints and add them to a database. Police boasted that when combined with facial analysis, they could help pinpoint suspects faster. In the name of tracking criminals — which are often loosely defined by Chinese authorities and can include political dissidents — the Chinese police are purchasing equipment to build large-scale iris-scan and DNA databases. The first regionwide iris database — which has the capacity to hold iris samples of up to 30 million people — was built around 2017 in Xinjiang, home to the Uyghur ethnic minority. Online news reports show that the same contractor later won other government contracts to build large databases across the country. The company did not respond to The Times’s request for comment. The Chinese police are also widely collecting DNA samples from men. Because the Y chromosome is passed down with few mutations, when the police have the y-DNA profile of one man, they also have that of a few generations along the paternal lines in his family. Experts said that while many other countries use this trait to aid criminal investigations, China’s approach stands out with its singular focus on collecting as many samples as possible. – and more here: Police in China Stalk Citizens With Surveillance That Predicts Future Crime
The BBC had Darren McGarvey on, reading is own book The Social Distance Between Us. Something is added to the content through McGarvey’s own voice reciting his own book adapted for the ‘book of the week’ slot. His Glaswegian accent and experience recording Scottish tinged rap helps in his delivery. Darren McGarvey is better known in music circles as Loki and his two albums published in the 2010s before he became an author and fronted documentaries (like working-class Londoner Professor Green). This is McGarvey’s second book after Poverty Safari, which was released in 2018. Both of the books deal with the realities for the British working class.
Revlon files for bankruptcy – CNN – one would normally expect a brand like Revlon to be resilient in a recession for being an affordable luxury a la Esteé Lauder. Ron Perelman overburdened Revlon with too much debt and its impressive that it lasted this long
China
Chinese courts flex intellectual property muscle across borders | Financial Times – Chinese courts have issued four key cross-border “anti-suit injunctions” following claims made by the country’s massive telecom equipment and smartphone groups — Huawei, Xiaomi, ZTE and Oppo — in disputes against Germany’s Conversant, US group InterDigital, and Japan’s Sharp. These rulings have essentially sought to block non-Chinese companies from enforcing IP rights in other jurisdictions, meaning Chinese companies cannot be sued for alleged infringements.They are enforced via daily penalties on a foreign company’s local operations in China, if that company insists on pursuing a case. According to Rieko Michishita, a veteran China IP lawyer at Bird & Bird, the rapidly mounting penalties make the injunctions akin to “taking a hostage”. And the cases are an indication, she warns, of how Chinese companies and courts will become more confident in deploying such legal manoeuvres as the country’s technological prowess steams ahead
Fears of data abuse as Chinese health code turns red for financial scandal protesters | South China Morning Post – Victims of what could be one of China’s largest financial scandals found themselves unable to step outside to join planned protests because their health QR codes had turned red, reigniting fears that the large-scale data collected for contact tracing would be abused for other uses. Since late May, hundreds of people have taken to the streets in China’s central Henan province, calling for authorities to ensure the return of their deposits that were frozen in four rural banks in the province.
Transforming logos for Pride has lost brand impact | Marketing Week – When the mass market starts arguing over who gets the specially altered distinctive asset for the month, it’s probably time to retire the whole code-playing business forever. Monkeys cannot run the zoo – especially the zoo’s Special Surprise Tricks Unit, which designs things to influence the monkeys without them knowing anything about it. Pride month clashed with the platinum jubilee. Brands got involved with the platinum jubilee celebrations as planning got under way by local councils and British embassies by mid-May. The platinum jubilee allowed brands to reach a wider swathe of consumers than would otherwise be the case and increase their relevance to consumers lives. Celebration of pride month was seen as brands ‘deprioritising’ the platinum jubilee on one side, while platinum jubilee critics were seen as been prejudiced in nature. What struck me was the quiet of the voices in the middle ground of the Pride – platinum jubilee dispute. Perhaps its better for brands to stay out?
The West’s Struggle for Mental Health – WSJ – American psychiatrists have been studying rates of functional mental illness, such as depressive disorders and schizophrenia, since the 1840s. These studies show that the ratio of those suffering from such diseases to the mentally healthy population has been consistently rising. Ten years ago, based on the annual Healthy Minds study of college students, 1 in 5 college students was dealing with mental illness. – and depression has surged 135 percent over an 18 year period. The finding are that “The more a society is dedicated to the value of equality and the more choices it offers for individual self-determination, the higher its rates of functional mental illness.”
☕️ Candy in your coffee – this seems to be an extension of the ‘sweet flavours’ available historically from the likes of Dunkin Donuts and other coffee outlets
National security law: can Hongkongers still hold June 4 commemorative events marking anniversary of Tiananmen Square crackdown? | South China Morning Post – political scholar Steve Tsang, director of the University of London’s School of Oriental and African Studies, also said the security law was intended to ensure activities that were deemed unpatriotic could not take place in Hong Kong. “It has been enforced in a way to secure an intimidation effect,” he said. “Unless someone or members of a civil society organisation are prepared to be charged and jailed … they will not hold a public event of any sort.” Lau Siu-kai, vice-president of the semi-official Chinese Association of Hong Kong and Macau Studies, said a large vigil commemorating June 4 might be seen as an act that undermined China’s sovereignty and therefore was not worth the risk. Asked what kinds of June 4 events might be allowed in the future, the pro-Beijing scholar said: “Some implicit actions, in private, and in small groups, should be fine under the current political atmosphere.” Simon Young Ngai-man, associate dean of research at HKU’s law faculty, said the question centred on whether such acts signalled “seditious intent”, which might risk violating the Crimes Ordinance – an offence punishable by up to two years in prison for first-time offenders. “Note that intending to promote feelings of ill will and enmity between different classes of the population is also a seditious intent,” he said. “The precise meaning of ‘exciting disaffection’ is unclear. Does it cover any kind of criticism of the Chinese and Hong Kong governments?”
Diabetes drug leads to notable weight loss in people with obesity – study | The Guardian – interesting article that touches on multiple aspects of obesity as a chronic condition. The biggest issue is that government’s aren’t looking to treat it as the chronic condition related to an an endocrine system imbalance that it is. I worked on a rival drug to the one mentioned, which is being promoted in the US and other countries at the moment
An Oxford case study explains why SpaceX is more efficient than NASA — Space Business — Quartz – Planners behind projects that attempt to achieve a massive gain in a single leap, they posit, enmesh themselves in psychological patterns that lead to failure. They delude themselves in thinking the actual costs of the project will be much less than expected, because if the real costs were known, the projects would never be attempted. Platforms, on the other hand, grow incrementally. These aren’t just digital constructions but real world activities that share several characteristics: Repeatability, extendability, the ability to absorb new knowledge and adapt to new situations.
Microsoft Azure cross-tenant cloud security flaws concerning – Protocol – “It’s concerning. And it is a pattern,” said Rich Mogull, CEO at independent security research firm Securosis and a longtime security industry analyst. “And so the question is: Do we believe that that’s because they’re under greater scrutiny? Or is it that they have more problems? It might be a little bit of both.” At cloud security firm Orca Security, whose researchers have found two of the cross-tenant vulnerabilities in Azure services, the issues strongly suggest that Azure is not withstanding the pressure applied by researchers to the same degree as AWS and Google Cloud, according to Orca CTO Yoav Alon. – the more things change, the more they stay the same
Deadly secret: Electronic warfare shapes Russia-Ukraine war | AP News – Russian jamming of GPS receivers on drones that Ukraine uses to locate the enemy and direct artillery fire is particularly intense “on the line of contact,” he said. Ukraine has scored some successes in countering Russia’s electronic warfare efforts. It has captured important pieces of hardware — a significant intelligence coup — and destroyed at least two multi-vehicle mobile electronic warfare units.
A primary metaverse leader is leaving Microsoft at the wrong time — Quartz – Kipman’s exit came as a surprise to some AR industry insiders. Kipman has been the leading evangelist for Microsoft’s immersive computing efforts since the launch of the HoloLens AR headset in 2015, which he helped develop. In addition to the HoloLens, Microsoft offers its bleeding-edge Azure Kinect spatial computing depth camera, which captures and tracks 3D objects. The company has also developed Microsoft Mesh for shared AR interactions, supports a wide array of VR headsets via its Windows Mixed Reality platform, and boasts one of the most popular VR communities in AltspaceVR. Quietly, Microsoft has become the biggest name in the metaverse next to Meta, largely due to its focus on business enterprise users. But now that Microsoft is losing its immersive computing champion, where does the company’s metaverse path lead? And why is Kipman leaving at such a crucial moment?
An interesting essay on the nature of scientific slow down that applies as much to applied innovation as well – Scientific slowdown is not inevitable – Works in Progress – The most popular version of the low-hanging fruit model is that we are picking fruit at a slower rate because the higher-up fruit are harder to get to. You can only invent fire, the wheel, or a flint axe once. This story says that declining research productivity is inevitable. The fact that we once saw increasing scientific progress is because we were continually increasing inputs: adding more researchers, more research tools and technology. But now research is getting so much harder that even this is not enough. But another explanation for falling innovation ‘yields’ is that we are getting worse at picking it, despite the progress in picking methods that has happened. We’ve handed in our stepladders for footstools, without realising it. Our recent decline in innovation vibrancy might be explained by ideas becoming inherently harder to find, but it may just as easily be explained by us becoming worse at finding them. – The scientific slow down is real and is occurring across disciplines:
Pharmaceutical research is taking longer and there is a patent cliff on blockbuster drugs
Each process change in semiconductors costs more money and takes more time
Software takes more lines of code
But the scientific slow down might also be down to problems with incentives. Technology executive and engineer Judy Estrin talked about the way ‘hard innovation’ is no longer invested in compared to ‘soft innovation’. Innovation itself has become financialised with blockchain being like a snake eating its tale. The scientific slow down could be as much related to the incentives and choices that drive research. The scientific slow down could also be down to the divorce between developing and making things. Silicon Valley is no longer making silicon. So it is harder to foster an eco-system to deal with scientific slow down.
China Will Be Deglobalization’s Big Loser by Minxin Pei – Project Syndicate – China was headed toward at least a partial decoupling with the United States well before Russia invaded Ukraine. And it has been seeking to ensure that this process happens on its terms, by reducing its dependence on US markets and technology. To that end, in 2020 China unveiled its so-called dual-circulation strategy, which aims to foster domestic demand and technological self-sufficiency. And yet, last year, China was still the world’s largest exporter, shipping $3.3 trillion in goods to the rest of the world, with the US its leading export market. In fact, overall trade with the US grew by more than 20% in 2021, as total Chinese trade reached a new high. Trade with the European Union also grew, reaching $828 billion, even as disagreements over human rights torpedoed a controversial EU-China investment agreement.
Cleaning Up Streetwear’s Act | High Snobriety – the European Commission are proposing new standards which would dictate how durable apparel would need to be in addition to bans on the destruction of unsold materials. This comes at a time when a cavernous dichotomy exists between the cohort of people who require their products to be sustainably minded and the growing number of consumers who succumb to the whims of fast fashion led by retailers like Shein mushrooming to a $100 billion valuation
