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.

  • Robots demoralise coworkers

    Faster Robots Demoralise Coworkers | Careers | Communications of the ACM – If you get the pace wrong would the effect of robots demoralise coworkers limit productivity? Is the future not robots augmenting coworkers, but replacing coworkers a more productive alternative. A Cornell-led team has found that when robots are beating humans in contests for cash prizes, people consider themselves less competent and expend slightly less effort—and they tend to dislike the robots – to be fair I’d expect to see something similar if the same person kept winning employee of the week. I know that workers on the line at Vauxhall in Ellesmere Port used to sabotage the robots on the line on a regular basis. This might phenomenon of robots demoralise coworkers be part of their motivation (along with laziness and malice)

    Flickr Cofounder Questions Tech’s Impact on Humans – WIRED – it’s easier to ask the big questions when you’ve made it and can reflect in the tech industry. These weren’t questions that we asked back in the day. More on Caterina Fake here.

    Marbridge Consulting – China’s February 2019 Domestic Handset Shipments Down 20% YoY14.51 mln mobile handsets were shipped in China in February 2019, down 19.9% YoY and 57.4% MoM, according to new figures released by the China Academy of Information and Communications Technology (CAICT), a department of China’s Ministry of Industry and Information Technology (MIIT). The significant month-on-month drop can be explained in part by the week-long Chinese Lunar New Year holiday towards the beginning of February. Of total shipments in February, 13.98 mln were 4G handsets, down 20.2% YoY, 37,000 were 3G handsets, and 0.49 mln were 2G handsets

    A Witch-Hunt on Instagram | Quilette – western PC culture seems to have more and more cases of it eating their own

    Aging Millennials Soothe Themselves With Childlike Fashions – WWD – to try and hang on to youth. The attenuation of youthfulness is a cross generational phenomenon. For instance middle aged dads the still buy streetwear rather than Superdry, skate and go to gigs.

    SXSW 2019: Virtual Cinema – JWT Intelligence – culture is still trying to adapt AR and VR. Whilst it has the energy of an early SIGGRAPH demo reel, I still think the storytelling aspect of things is struggling to find its legs

    Patrick Pruniaux: “There Truly is an E-commerce Potential for Horology” | Luxury Society – Kering haven’t been particularly good at using Ulysse Nardin as a brand in China, but they are rectifying it now. Kering are looking to tap into ‘new’ watch consumers who can’t spend Rolex money on a watch, this position now looks more tenable since Apple has stopped going for the luxury sector with the Apple Watch

    How to Create an Authentic Luxury Experience for Millennials | Jing Dailyif a luxury brand wants to entice today’s consumers, whether it’s in China or beyond, it needs to underscore its authenticity and relevancy. Powerful words, to be sure, but what does it mean to be authentic and relevant? For the moment, let’s start with the opposite. During many of my brand strategy sessions, I often hear the expression “they feel staged” when people describe brands that they would never buy. Needless to say, when brand feels staged, it is neither authentic nor relevant. The synonyms unnatural, deceived, cheated, and faked come to mind. In other words, a staged brand is bullshitt*ng their consumers.

    Louis Vuitton Has a Michael Jackson Problem | Intelligence | BoF – LVMH invested significantly in Virgil Abloh to elevate its menswear line. However, the potential failure of Abloh’s Michael Jackson-inspired collection—whether due to pulled items or lack of consumer interest—is unlikely to significantly impact Louis Vuitton’s overall revenue, as men’s ready-to-wear is a small part of their business. The real concern for Louis Vuitton is protecting its brand reputation, which remains strong unlike some competitors who have faced recent social media backlash. This is especially crucial now, as consumers are quick to criticize any perceived missteps.

    How What Goes Around Comes Around Is Attracting Millennials To Buy Vintage – US chain channels aesthetic of Japanese vintage shops

    You May Have Forgotten Foursquare, but It Didn’t Forget You | WIRED – interesting how Foursquare went from being useful (I use it as spatial bookmarking, so that I can return to new places that I like) to where 2.0 middleware with a bit of ad tech creepiness thrown in for good measure (paywall)

    Pinterest Files for an IPO: What Investors Need to Know | The Motley Fool – interesting for intent driven visual search if they can monetise it effectively on a global scale

    Great video of a Black Hat conference presentation on biometric identifiers.

  • Zara model controversy & things I made last week

    Chinese netizens on Zara model controversy. I love Asian Boss’ qualitative interviews. The Zara model controversy happened only because its in China. Chinese netizens over react to anything they perceive as a slight. Fashion isn’t about ‘beauty’, but that subtlety sailed past Chinese netizens. Freckles indicate age and peasantry in Chinese culture. Beauty is porcelain flawless skin.

    Anand Giridharadas on the modern gilded age and how we should be skeptical of plutocrat philanthropy.

    New Balance China tends to march to the beat of its own drum. But even I was surprised by these sweatshirts with new romantic type detailing. China is unique in terms of its faux Korean aesthetic. I just don’t get the sportswear versus flamenco dancer look, I am just speechless at it.

    New Balance does New Romantic

    Samsung’s facial recognition is surprisingly easy to defeat. This is particularly bad for Samsung. Samsung’s other biometric authentication finger print ID isn’t as good as Apple’s. Samsung isn’t even as good legacy finger print scanners found on the back of Android handsets. Users have no reasonably secure option beyond PINs. I knew of siblings (not twins): a sister unlocking her younger brother’s phone at a glance.

    The moral of this story is that physical security of your phone is required to prevent unauthorised access to your device. Regardless of whether its made by Samsung or any other vendor.

    Goldman Sachs have a great (if terrifying) video on the use of biometrics in public places like airports and stadiums. This is really disturbing, nay, dystopian viewing if you care about your privacy at all. The human factors issue of the laptop loss at Clear affected the brand reputation. What’s impressive is the fact that the Clear brand survived disaster. It is rare for lightning to strike twice, even more so in technology.

  • Stone Island morphing print + more

    Stone Island morphing, evolving print for its new collection | Dazed – why Stone Island isn’t cited more often as innovators is beyond me. It’s more than a football casual brand. Stone Island morphing print is an extension of the approach that the brand has taken in materials development. It changes technical and aesthetic properties, with one eye on tactical garment detailing.

    Elizabeth Warren plan to break up Amazon, Facebook, Google, big tech – Business Insider – this could get interesting. While Elizabeth Warren won’t be president, her views will help shape Democratic party policy. Big tech’s historically cozy relationship with the Democrats will come under pressure.

    How Makimoto’s Wave Explains the Tsunami of Specialized AI Processors Headed for Market – ExtremeTech – great read and analysis on the current trend of specialised processors for machine learning and crypto currency applications. More on Makimoto’s wave here.

    WHY COMPETITION IN THE POLITICS INDUSTRY IS FAILING AMERICA A strategy for reinvigorating our democracy Katherine M. Gehl and Michael E. Porter | Harvard Business Review – it seemed pertinent to read just as the UK spins out of control on Brexit. I can’t work out if it is consumer behaviour or related to the electoral system. In both the UK and US; they have first past the post systems rather than proportional representation. Proportional representation is more popular in many European countries including Ireland and Germany.

    Huawei seen as better value for money than Apple and Samsung by Brits | YouGov – interesting trade off between low trust but good value

    Eight in 10 Britons rely on cash for everyday payments, report finds | Money | The Guardian – there seems to be a discrepancy between cash infrastructure usage and apparent cash usage? I suspect that card usage must be focused in the large cities and cash usage more popular in smaller towns.

  • Shut down digital marketing + more

    Mark Ritson: It’s time to shut down digital marketing teams for good | Marketing Week – return to media neutral and evidence based marketing? It also reminded me of a debate that I had back in 2008 with James Warren about when were we likely to see the end of the digital strategist. It hasn’t happened yet, because there are plenty of businesses selling ‘digital transformation’. Basically the old enterprise IT sales process in a new design thinking bottle. I suspect that the time to shut down digital marketing teams might be a while away yet, though I agree with Ritson’s sentiment.

    Carmakers quitting Britain won’t blame Brexit – it’s not in their interest | The Guardian – classic reputation management; I don’t blame the Japanese for taking this approach. I imagine that Mini, Bentley and Rolls Royce might take this approach too, if the brands survive electrification. Aston Martin and Jaguar Land Rover may go further showcasing India or China as a premium vehicle powerhouse.

    Europe lagging on 5G? Don’t be so sure, says Ericsson | total telecom – Ericsson believe that the move to speed up 5G rollout in Europe will come from Industrial, rather than consumer focused use cases. European government’s and operators are looking to fast track their 5G rollout programmes, dispelling the myth that Europe will be ‘late to the 5G party’, according to an industry expert

    WSJ City | Key investors unhappy with SoftBank Tech-Investment Fund – not terribly surprised

    Gender and box office performance: Applied Economics Letters: Vol 26, No 9having a male star in a film generated a premium in the neighbourhood of 12%, while female star had no statistical impact on a movie’s performance – is this down to the way that they are marketed or the way that male stars are perceived versus female stars? I also tend to follow directors because of the sense of style that they bring to a story. Their name is a mark of quality

  • AngloArabia by David Wearing

    I got sent a copy of AngloArabia and was interested in having a read of it. I grew up at a time when the Gulf states influence grew through OPEC. I started my work life with a brief time in the oil and gas industry. Since then I have moved on through a number of iterations in my career.

    Currently reading

    The Gulf states sit in a peculiar AngloArabia part of British history that isn’t generally understood. Wearing goes through the history of the the area from the Trucial states attached to the British rule of India. And brings up to date regarding the UK’s role in the modern Middle East.

    The modern relationship between the Gulf states and the United Kingdom blurs the hierarchy between client states and their former colonial master. Oil and the OPEC oil crisis was the catalyst as countries got increased financial power and the UK became the number one Euro Dollar market.

    Lots of western countries have seen sovereign funds invest with a view to gaining influence. The UK is unique in terms of the role played by Gulf States who are bailing the country out. Without the support of Middle East money, the country would be overwhelmed by its current account deficit. This money has gone into property, the UK stock market, private equity investments and trophy businesses such as football clubs. The Gulf states are also responsible for a huge amount of consumption in the UK. The UK luxury market revolves around their consumption patterns.

    The implication is that the British economy and the UK government literally can’t afford for any of the Middle East monarchies to fall in an Arab Spring style revolution.

    The author David Wearing is a left of centre leaning journalist with wonkish credentials. As with any author, you need to ask yourself about his agenda. He has managed to write a relatively accessible book. More related content here.