Tracking retail customer movements using their cell phones – a prerogative or intrusive ?

Posted on July 18, 2013 by aviyer2010

An article in the New York Times (July 14, 2013) describes an experiment at Nordstrom, after informaring customers, that tracked customers “using the wi-fi signals from their smartphones”. But the cell phones unique signature also permits tracking customer repeat trips, time spent in the store, items purchased etc. But online stores have always stored customer clicks, browsing time, purchased vs considered goods etc. Is the customer tracking in a physical store similar to online tracking of customer choices and therefore a retailer prerogative ? Should the customer be alerted whenever she is being tracked, with approval sought and an incentive provided, for continued tracking ? Should stores send coupons to customers based on their observed shopping interests to increase their reason to shop ? Are there privacy issues that are relevant or is the store a domain that should be permitted to be under retailer control ?

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Paying Auditors to audit pollution compliance inspections

Posted on July 18, 2013 by aviyer2010

An article in the Wall Street Journal (July 18, 2013) describes an experiment in Gujarat, India, to increase the correctness of the pollution readings by auditors. In the past, most pollution audits claimed compliance. But two experiments were conducted – the first one randomly checked audits but offered a higher rate for audits that were correct in their assessments of compliance. The second experiment paid a bonus if readings were accurate if checked randomly. The impact – both an increase in detection of polluters, as well as an increase in accuracy. Can ideas from this experiment be used to check garment manufacturers in Bangladesh ? Given that better readings also caused an increase in investments in pollution control equipment, does this suggest that improving audit correctness can improve global pollution levels ? How important is a sustained pollution control focus by local governments an ingredient for success of such approaches ?

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The US alliance vs the European accord’s plans for Bangladesh garment factories

Posted on July 18, 2013 by aviyer2010

An article in the New York Times (July 14,2013) describes plans by an alliance of the US retailers to offer shared inspection reports of over 500 factories in Bangladesh, loans from a pool of $100 million to factory owners to improve their plants, but the option to cancel orders to factories that do not comply. The European accord plans to fund the remediation of factories that do not comply. US retailers claim that the European accord would expose them to unlimited liability in the US because the US legal environment is different from Europe. But the European proponents claim that voluntary changes as envisaged in the US plan would not be feasible. Should garment manufacturers in Bangladesh be required to take responsibility of their factories and make business decisions regarding compliance ? Or should importers be required to invest in improving factories, thus absorb the costs of compliance ? Will the best way to improve Bangladesh factories be global competition from countries like Cambodia and Vietnam that offer factories with compliance to importer’s requirements?

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On to the next legal round regarding Apple’s role in ebook pricing

Posted on July 18, 2013 by aviyer2010

An article in the New York Times (July 10,2013) describes the judge’s ruling that Apple coordinated with competing publishers to increase ebook prices. Apple is said to have offered publishers an agency pricing scheme by which it would be paid 30% of the selling price in return for publishers getting to set ebook retail prices, along with a commitment that Apple would get the best selling price (called the most favored nation price). This was in contrast with Amazon’s standard $9.99 pricing, which publishers considered too low. The government claims that Apple’s demand for most favored nation pricing decreased competition and increased consumer prices. Publishers claim that Amazon used its monopolistic hold over ebook sales to push their margins too low, while Apple enabled more reasonable and flexible margins. Does the government’s argument that favors Amazon’s pricing enable variety and consumer choice of books in the long run if publisher and author margins get too low? Does most favored nation pricing increase retail prices or segment markets by book or author genre? Will this ruling, which will effectively reduce information sharing about deals signed by publishers, improve the retail supply chains for consumers ?

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The Thai mountain of rice inventory and global supply chain worries

Posted on July 18, 2013 by aviyer2010

An article in the Financial Times (July 18, 2013) describes the impact of the 50% price premium offered by the Thai government to rice farmers that last few years, leading to a drop in Thai rice exports and a surge in government inventories. The current level of Thai rice inventories can cover 50% of global rice imports. Now rice markets are nervous that Thai rice will flood the market and result in significant price drops, thus impacting farmers in India and Vietnam. But producers who use rice as input will also see an impact of this flood of product. How should Thailand manage its inventory to prevent such market meltdowns while achieving its goals ? Should farmers in Thailand be paid to stop growing rice for next year in an attempt to prevent burgeoning inventories ? Should alternate uses of rice for sustainable products such as paper or other be encouraged as a way to manage this problem ?

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Can electric-assisted tricycles use for local deliveries become economical ?

Posted on July 7, 2013 by aviyer2010

An article in the New York Times (July 7,2013) describes a company, B-Line Sustainable Urban Delivery, that uses electric-assisted tricycles to make local deliveries hauled in a 60 cubic foot cargo box. The company coordinates deliveries in a local area around Portland and delivers baked products, coffee, office supplies etc. The space on the side of the containers is used for advertisements and works to make the service more affordable. But even after all the associated benefits, many companies justify its use as enabling customers to feel good, enabling companies to justify being green because the service is more expensive than conventional delivery. Given the lower environmental footprint, should such services be provided additional subsidies by local governments to encourage their use ? Should equipment cost or driver income be provided preferential treatment to encourage such industries ? Will the cost of such deliveries decrease as volumes increase and empty miles traveled get reduced ?

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Competition and monitoring challenges of apparel manufacturing in Cambodia

Posted on July 6, 2013 by aviyer2010

An article in the Wall Street Journal (July 6, 2013) describes the evolution of the role of “Better Factories Cambodia” and its monitoring of working conditions in Cambodia’s apparel factories. Though initially focused on public release of its reports, the demise of the Multi-Fiber Agreement in 2005 and global competition meant less leverage for the US and increased global competition faced by Cambodian manufacturers. The result has been that reports are submitted by manufacturers as confidential documents, and these have to be purchased by interested retailers. This lack of transparency has also affected wage rates, overtime rules and work environment as manufacturers compete globally to win orders. How should the International Labor Organization and retailers organize the monitoring of Cambodian factories to ensure compliance with agreed upon laws ? How should employees be given a chance to share their information without suffering consequences ? Can technology enable consumers to be assured that their clothing is manufactured in an humane environment ?

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Selling more books vs maximizing profits – are Amazon’s decisions in sync with author preferences ?

Posted on July 5, 2013 by aviyer2010

An article in the New York Times (July 5, 2013) describes discount reductions on books by Amazon as the company’s share of book sales grows to 25% of the market. Several authors and small publishers claim that the lowered discounts mean fewer units sold and thus a smaller reach of the product. They believe that Amazon’s move closer to a monopoly now gets them to switch strategies from heavy discounting to drive out competitors to maximizing profit from sales of fewer units. How should the competing priorities of the author and Amazon regarding the impact of number of books sold be reconciled ? Will increased prices by Amazon encourage direct sales through other ecommerce channels by book publishers ? Will the increased use of e-books minimize the physical book supply chains ?

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The impact of WTO’s ruling to eliminate COOL in US food products

Posted on July 5, 2013 by aviyer2010

An article in the url (http://info.usa-c.com/2013/05/06/wto-may-23rd-and-cool/) reports on a World Trade Organization ruling requiring US food products to stop the Country of origin labeling (COOL) on food products after May 23, 2013. The WTO ruled that COOL labels are barriers to entry for food from Mexico and Canada. But other studies suggest that consumers did want to understand their food sources and use that data to make purchase decisions. Another organization that provides the “Made in USA Certified” label (http://info.usa-c.com/) claims to audit supply chains to verify compliance with the claim. Should US consumers demand such supply chain audited labeling to assist them in making purchase decisions ? Given that FTC requirements for US content only apply to automobiles, fur, wool and textiles, is there a reason why food product labeling should be ignored ? If the supply chain involves animals that are born in the US, reared in Mexico, slaughtered in the US etc, how should labeling be enforced to be of use to consumers ?

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The global supply chain that clothes US consumers

Posted on July 4, 2013 by aviyer2010

An article in Bloombergbusinessweek (July 1,2013) displays data from the Office of Textiles and Apparel at the US Department of Commerce to show exporting countries that clothe US consumers. The participants range from China (exporting $553 million pairs of cotton pants and shorts), Italy (the first ranked supplier of wool suits), El Salvador (exporting 297 million sets of cotton underwear and 358 million pairs of hosiery), Bangladesh (exporting 214 million pants and shorts), Vietnam (336 million shorts) etc. Clearly the world’s suppliers clothe US consumers and support manufacturing and trade globally. But the US Department of Commerce also has a database on its website to enable retailers to source from “US made” manufacturers. Given the vast involvement of global manufacturers, how should US retailers organize compliance at manufacturing and shipping sources to acceptable codes of conduct ? Should trade associations organize such efforts, NGOs or governments ? Should compliance with customer expectations be a brand level responsibility or part of regulations that should be imposed on the retailer to sell products in US markets ?

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