Business & marketing 2.0 – Page 2

Retailers “doing it tough”. Again.

Australian politics, Business & marketing 2.0, Environment & sustainability

It seems every year, in the lead-up to Christmas, we hear about how “retailers are doing it tough” and that the Christmas period is crucial for retailers, so we, as consumers, had better “spend, spend, spend”.

This year was no different, except the “global financial crisis” had “hit retailers hard” and that, more than ever, we needed to spend, spend, spend. Never mind the fact that families might need the Rudd government’s handout for bills and savings – it was our duty to spend to save the economy.

Before the Christmas rush I commented to Ang (though I wish I had have blogged the prediction here) that by the time Christmas was over we’d hear that spending was up this year, if not to record levels. Why? Because I’ve noticed that this happens every year.

Last year it was the weight of growing interest rates denting consumers’ spending. This year, the economic crisis. I forget what it was the year before that.

I did entertain the thought that the financial “crisis” might, in fact, have an impact this year – but I posited that we’d still see a surge in spending all the same.

Well… the scare tactics appear to have worked.

According to the salesman at The Good Guys near my Mum’s home, large LCD TVs have been “walking out the door” (hardly an objective measure I know). And Gerry Harvey is surprised that sales had increased 8.7% over the same period last year.

Mr Rudd must be very pleased that his bonus is being spent so wisely…

Now, I am aware that retailers have experienced a significant decrease in spending over the past few months and that some, especially I suspect smaller operators, will actually be “doing it tough”.

I don’t know about you, but I just find the whole “it’s your duty to spend” line a little sickening and that the justifications for why we should are wearing a little thin when retailers continue to report record profits even after claiming that they’re “doing it tough”.

I’d like to see journalists, when reporting such statements, take a look at the profit figures across the previous year and put it all in a bit of perspective: “Despite the fact that David Jones posted a record profit last year, the best in it’s history, the retailer says its preparing for ‘tough times’.” (tough times = “net profit after tax … in line with previous guidance of five to 10% growth” – emphasis mine.)

I think it’s all very much a sign of our myopic focus on growth at all costs (hilariously captured by this YouTube video) as though the environment is just a never-ending source of resources and that permanent, endless growth is possible.

It’s quite simply not possible – the environment has limits that are already stretched by our current consumption habits. Sooner rather than later we’re going to have to face that fact.

Perhaps we should be looking for alternative models and starting to look at the economy from a different perspective? Models and perspectives that don’t rely on infinite, unsustainable growth fueled by private, debt-enabled spending – which, after all, got us into this mess in the first place.

The benefits of certification

Business & marketing 2.0, Environment & sustainability, Ethical clothing

Originally posted on the Green Loves Gold blog.

When I was thinking about starting a sustainable business one of the things I looked into fairly early on was certification standards. In the clothing business there are a growing number of standards and certification programmes that need to be considered.

Standards in the textile industry

In the industry that I’m entering with Arketype, there are a number of potentially applicable standards – to name just a few:

Fairtrade Cotton – Fairtrade certification for the raw fibre and textiles production
Certified organic cotton schemes, such as USDA National Organic Program or EU 834/2007 (which takes effect in Jan 2009) – covering raw fibre production using methods that are much less impacting on the environment
Oeko-Tex – testing and certification to limit use of certain chemicals
Homeworkers Code of Practice – an Australian programme that accredits garment manufacturing as “No Sweatshop” (which is part of the Fairtrade cotton standard for garments manufactured in Australia)
NoC0₂ – programme for auditing, reducing and offsetting carbon emissions

Of course there are many standards and logos which can be quite overwhelming for business owners and customers alike. The good folks at Eco-Textile News have produced an excellent guide for the TCF industry that outlines the major standards for that industry.

Even so, businesses can’t carry out all of these certifications, especially so during the start-up phase where capital (and time) are often limited. So the challenge is to be discerning about which programs we engage in.

Of course, we can also incorporate the principles of the various other programs into our practice, even if we’re not in a position to carry out certification against those standards.

Certification counter-acts the tyrrany of distance

I attended a talk recently by a member of a local food co-op and talk turned to “certified organic” produce. Many of the local growers are using organic methods, but not all are seeking certification.

In discussing this, the member explained that one of the aims of the co-op was to connect local growers with their customers directly. In breaking down this distance – creating a direct, personal connection – he argued that the need for certification is greatly reduced as a relationship is built up and trust develops.

If customers can talk directly to the farmer about their methods, perhaps even visit the farm etc., the farmer is less likely to break that trust as their customers are people they know.

In other words, it’s when distance is introduced – when the supply chain gets between the customer and the producer – that certification becomes increasingly important. The longer the supply chain, the more important certification becomes. I find it a thought-provoking alternative “approach” to achieve the same goal as certification.

For example, at a recent event held by my primary supplier, Rise Up Productions, the makers of our products were there at the event, and were introduced to us. Bronwyn Darlington, Rise Up’s founder, often visits the manufacturers and suppliers of our textiles in India – she has a personal connection to the producers – radically reducing the distance between producer and customer.

This builds confidence in me (the customer) that Rise Up are doing the right thing.

Why should we certify?

Interestingly, though, Rise Up are provide certified organic and Fairtrade cotton products, and are accredited under the Homeworkers Code of Practice. So why, given her close connection to producers, is Rise Up going through the certification process?

I can’t speak for Bronwyn and her team, but for me, certification is still important even under this circumstance for one reason: customer confidence.

Thanks to the effects of greenwashing – essentially an abuse of trust by companies who do more talking than walking – certification is essential to build confidence that what we’re doing is not just a marketing pitch and that our claims have been verified by an independent third party.

Without it, we risk being tainted with the same brush as other companies that aren’t as committed to social and environmental outcomes, but are trying to jump on the bandwagon of growing consumer interest in sustainability.

Recording budgets

Business & marketing 2.0, Music, Personal

I have often seen a lot of debate about the merits of downloading music for promotion of a band and how downloads are changing the music landscape.

Generally I agree that the opportunities for bands are much greater in this day an age than they were previously. In fact, our first EP is released under a Creative Commons license because of this belief – anyone can share our music with their friends, remix it (as our friend Karoshi just has – can’t wait to share that with you!), and the like.

What I haven’t seen is a lot of discussion of how much it actually costs to record and produce music of a standard suitable for “releasing” (radio play etc.). I get a sense that there’s a bit of a misconception that, with the advent of cheaper computers and audio recording hardware and software, that artists are able to produce their music really cheaply, which isn’t actually the case.

The other suggestion I see a lot is that bands can release music for free and make money through other means (performance fees etc.). This I think is in some way related to the first misconception, but also is problematic in its own way.

What I want to do in this post is share my experience of producing music with my band, Fuzu, and having a look at what it costs to release an independent EP.

Cafe service fail

Business & marketing 2.0, Personal

This is a random little rant – feel free to pass it over if that’s not your thing..

I am one of those weirdos that takes his own mug to the coffee shop, to avoid the wastage of a paper cup.

A life-cycle analysis of a paper cup vs. a porcelain mug shows that, if the mug is used enough times, the carbon footprint is lower – so I use it as often as I can. I probably have used my mug for hundreds of coffees – and I intend to keep using it to maximise the use of the resources involved.

I’m consistently dumbfounded, though, when I turn up to a cafe with my trusty mug and one (or both) of two things happens:

The barista takes a paper cup to put the espresso in, rather than a re-usable container. I’m bringing my mug to reduce wastage (why else would I do it?), then you go and waste the cup anyway.
They then only half-fill the mug, or fill it and complain that it’s bigger than a normal cup. I’m saving you the $0.02 of the paper cup, you can afford to give me that $0.02 back with an extra 25-50ml of milk.

If either of these two things happen, I usually don’t go back. Even if the coffee’s good. It’s a basic attention to detail/service thing. Yes – I’m sure that I’m being picky, and probably unreasonable (there are, of course, bigger things in the world to get upset about).

But I’m sure there are lots of people like me that notice these things, and many cafes that are losing custom because of them. And many cafes get it – my favourite one charges less because I bring my own mug.

Which is a long way of saying that I won’t be returning to either of the cafes I went to today…

</rant>

Sustainable investments in the “credit crunch”

Business & marketing 2.0, Environment & sustainability, Personal

Strangely enough I’ve been thinking about my financial situation given the apparent impending collapse of the global economic system… (Or has it already collapsed? I can’t quite work that bit out.)

Although the tanking Aussie dollar is a little bit of a concern, I have a suspicion it’s going to bounce back a bit in the coming months. (Besides, if it wasn’t for the recent buoyancy of the dollar we probably wouldn’t be too concerned – it’s not like the first time the dollar has been hovering around $0.70).

And despite all the ups and downs of the interest rates, I’ve only actually seen one small increase in my mortgage in the past 12 months, so there’s not much to concern myself with there either.

Most of my “net worth”, though, is in my superannuation – so I’ve been thinking about that a bit.

I recently shifted my super across to a more aggressive fund option that includes international shares. This has increased my exposure to the current volatility – though I’m not panicking and “locking in” my losses by changing strategy just yet. Allow me to explain why…

For a number of years my super has been invested with Australian Ethical Superannuation. This means that my money is invested in businesses geared towards a sustainable future.

As far as I can tell the fund has been a strong performer for some time – and one of the nice things is when there’s a downturn the fund typically doesn’t see as great a loss as the general market (unless tech stocks are particularly affected – there’s a slight bias towards bio- and medical-tech in the fund).

Additionally, I truly believe that sustainable businesses are the way of the future and that as the market recovers the sustainable stocks will recover well, especially as people reconsider their investment options and perhaps put some thought into sustainable strategies, rather than the “growth at all costs” approach that started this whole mess. (Call me naive – but that’s how I view things.)

So while I’m expecting to be a bit shocked at the level to which my super goes backwards in my next statement, I’m confident that over time the value will be restored and I’ll be better off in the long run. And I’m really glad I made the choice all those years ago to invest in a strong SRI fund…

$2 that lasts a lifetime

Business & marketing 2.0, Environment & sustainability

A few months back I picked up a stand for my laptop. I decided to shell out for a Griffin Elevator. I’m quite sensitive to neck strain, so having a stand for my laptop is important, and I’d used the Elevator at Digital Eskimo, liked the look of it, so went with that.

When I picked up the Elevator from the store I was disappointed to find that the packaging was predominantly vacuum molded plastic. Not only that, but there were no indications/markings on it indicating recyclability (the little recycle symbol with a number on it).

Having visited a recycling depot (yes, I’m truly an enviro-geek!) I knew that I couldn’t put this in the recycling as they are hand sorted and would end up in landfill anyways – so I was left with no option to but to throw it into general waste.

Annoyed by this I wrote to Griffin suggesting that, in this day and age, it wasn’t good enough to be putting out packaging that was unrecyclable – let alone something that wasn’t recycled to begin with. The response? We’ve looked into it but it’s too expensive.

Now, call me naive – but for a product that retails at around AUD$80 for what amounts to being two formed strips of aluminium and a piece of plastic, I’m sure that Griffin could afford the extra few cents (even a dollar or two) per unit to clean up their packaging. Perhaps by exploring other materials, like molded cardboard, they could possibly even reduce their costs (I’m not sure – but creative thinking might uncover cost savings is my point).

Ever since I read Cradle to Cradle I’ve been quite averse to plastic – especially for so-called “single-use consumables” – plastic water bottles etc. (For example, the Elevator uses plastic in its construction – but it has a long expected life usage. That’s not to say that it, too, shouldn’t be recyclable – which it isn’t – but it offends me far less.)

Sometime whilst reading that book it really struck home how insane our use of plastic is. Here’s a material that has a life expectancy of hundreds, if not thousands of years (depending on the plastic) – and we use it for “single use” products?! As the book says – isn’t it odd that we use a container that outlives its contents by thousands of years? Why not use materials that degrade within years, or months, instead?

It’s not just Griffin, of course. The use of plastic in product packaging is deeply embedded. What bothers me most is that this is the “cheaper” option – the incentive is there to use the most damaging option. That, to me, is broken.

In my view it’s a systemic failure – a market failure. Since I’ve been thinking about it I’ve been wondering what sort of “market mechanisms” might be employed to correct this failure. I’d be really interested to know what David thinks, because so far I’m at a loss.

The thing is, solutions are coming – but as we saw with the recent ruckus by retailers about phasing out plastic bags, we seem unwilling to change our damaging ways. This is a legacy that will last for generations – one of those clear cases where we’re borrowing against our childrens’ future – it’s disappointing (to say the least) that we’re not being more pro-active in embracing and developing solutions.

In my new business I am resigned to the fact that plastic is going to make up part of what we do. I know that Rise Up has found alternatives to plastic coat hangers already – but it seems everything from the buttons (usually plastic) to packing cases to the threads (polyester) seem to be unbiodegradable plastic.

I had the pleasure of meeting a materials scientist at the RMIT textiles workshop I attended earlier in the week and I would dearly love to continue the conversation with him, to continue to explore options. Hopefully we’ll find some alternatives that can help be part of the solution.

And while I don’t have the capital or scale to effect a lot of change – I will be doing all I can to find alternatives…

How to make your customers feel the fool

Business & marketing 2.0, Technology

In response to my last post, Damian points out via Twitter that, despite all my whining, I still want one (that’s my words, not his).

My response initially was: “yes, but I want to not want one. I really would like to boycott the damn thing in disgust, but noone can match the integration. I have a love/hate relationship with Apple. I’ll be cheering on any credible competitor that can challenge their arrogance.”

This is the thing – Apple’s balls-up makes me feel the fool for wanting their product. I stopped wanting to feel the fool some time ago, and will jump to a credible competitor as soon as one appears.

(I think that’s a testament to Apple’s brand – that I would take such a thing personally. But I digress…

I don’t purchase music from iTunes as there is a credible alternative without the lock-in – they’re called CDs. And I recently switched to use my Sony Ericcson W880i instead of my iPod, only to switch back due to the lack of integration. I want to avoid using the App Store as well due to the lock-in there – I simply don’t want to support it.

The thing is, this isn’t the first time I’ve felt this way – I’ve mentioned my gripes more than a few times on this blog. But every time it happens, I want more and more for a competitor to step up and provide me with a decent alternative. I know I’m not alone.

And that’s something Apple’s current market success with the iPod and iPhone currently masks, and thus Apple’s arrogance continues unabated. This hubris (among other things) is what led them to become a minority player early in the PC industry (a position they’ve yet to escape in the personal computer market). I dearly hope they get slapped upside the head sometime soon by a competitor so they pull their head in and start serving their customers. Not that I’m holding my breath…

Update: Hugh posted the following cartoon on a slightly different front, but appropriate all the same:

iRate (or “Apple doesn’t want my money”)

Business & marketing 2.0, Technology

I’m wondering if someone can tell me how I might be able to buy an iPhone in Australia? Seems Apple doesn’t want to sell me one. Telstra are playing extortionist, and Optus are plain out of stock.

Note to Apple Australia: I have $850 to give to you in exchange for the 16GB black iPhone you’re advertising everywhere. If you’d like to collect, feel free to let me know…

The long version

Apple still don’t sell phones outright – only on 24 month plans with Optus and Vodafone. Their advice, roughly, is call Optus, find out where they have stock, then go and get one from whatever store happens to have one on that day. Yeh… whatever. Perhaps Apple should pull down their advertising until they can actually sell the device to interested customers?!

Telstra still have some 16GB stock, but little wonder why – they won’t sell an iPhone outright (despite their claims to the contrary) – certainly not to my interpretation of “outright”. You have to a) be an existing Telstra customer (prepaid is ok, as long as you only want an 8GB unit) and b) have to then (reportedly) pay $150 to unlock the phone to work on other networks.

Optus are clear out of stock. And the city store is no longer taking orders – the exasperated sales staffer informed me that they’d taken 4 calls for very irate customers still waiting for their phones, 3 of which apparently canceling their accounts.

In another city store I asked about the prepaid and they simply responded “we don’t know” – they’ve sent a list of interested people but have no word on when they will receive stock, let alone be able to sell it outright. I’m now on that list that’s seemingly being ignored.

I have to admit, I’m used to Apple not having stock when launching a product. But I have never seen a balls-up like this. I’m sure that Optus aren’t all that impressed with Apple’s supply issues – I wonder if they’ve ever been out of stock of a new Nokia or Sony Ericcson handset? And whoever agreed to the contract terms that limits Apple’s ability to sell the iPhone outright needs to be fired – what a stupid, stupid thing to do.

This is the second attempt to buy an iPhone in the past 3 weeks without success. If Apple thinks this is “creating desire” for the device through scarcity, they are sorely mistaken. It’s just pissing people off – their partners, their customers (existing and potential).

Anyways, I am kinda serious about my initial question. If anyone has some real advice (unlike the kind I got at the Apple store) on how I can pick up a 16GB black iPhone, I’m all ears…

P.S. The reason for my renewed interest is the announcement that Virgin are entering the fray with reasonable data-plans, and 3 have announced their options for those of us that have been able to buy a phone outright (even though they can’t sell the phone, yet), which are even better.

iPhone launch thoughts

Business & marketing 2.0, Media & Communications

Some time ago, when it was first announced the iPhone 3G would be coming to Australia, I quietly (and sometimes publicly) hoped that the 3 network would be the network to launch the iPhone. I thought the only way we’d get decent data charges was if 3 had the phone – given how tremendously awful those charges on other networks are.

As the launch approached, I watched as telco after telco announced that they would be stocking the iPhone: first Vodafone, then Optus, then Telstra.

It’s worse than it appears

As expected, all of them have awful data plans. Optus is by far the most reasonable. Chatting with a friend the other day, they asked “isn’t 500MB enough?” in reference to the Optus plan. Given the pitiful data plans offered by carriers to date, the 500MB option from Optus seems like a good step forward, but I think that for the iPhone this is not enough for all except casual users on a device like the iPhone.

Mark Pesce in a post for the Future of Media blog: iPhail, writes:

“My guesstimate is that the average iPhone user would use somewhere between 2GB and 5GB of mobile data a month – a figure that’s bound to rise as 3G/HSDPA units reach the field.”

Before Mark published his post, I’d come to a similar conclusion. One of the new features of the 3G iPhone is “Mobile Me”, which pushes calendar, contacts and other data to the phone. That will chew up a significant amount of bandwidth. And as Mark points out, that 500MB could pretty easily be chewed up by an avid reader of the SMH.

But I think what has been missed by the telcos is the fact that the iPhone interface, especially the browser and applications (the Apple iPhone App Store also launched yesterda), changes the way iPhone users will use the phone for browsing – increasing it’s use as a truly mobile internet device.

Think about it – using Google Maps on my Sony Ericsson W880i is a “last resort” because of how small the screen is and how difficult it is to input addresses and navigate the maps (I do dig my phone, but that aspect of it is crapful). On the iPhone, I suspect Google Maps will be a “first resort” application – and it will take a fair chunk of data to support that kind of use.

Could Apple have done better?

With the launch of iTunes – which took an enormously long time only to result in a reduced catalogue at higher prices than our U.S. counterparts – Apple Australia demonstrated they had difficulty negotiating the kind of deals that their U.S. compadres could manage.

The inability of Apple to select an exclusive partner (due to legislation restricting the practice) in Australia no doubt didn’t help their cause. But the deals (especially Telstra’s pitiful efforts) are really, really poor – even compared with existing mobile broadband offerings from the same providers. Mark Pesce calls this discrepancy an “Apple tax” – and I think that’s a pretty fair assessment.

So what about 3?

Of course, the glaring omission on that list of telcos is 3. On their blog, 3 claim that Apple are not allowing 3 to carry the iPhone. I find that hard to believe – and I wonder what 3 are asking for that’s holding things up.

But, according to the SMH blogs, word is that Apple and 3 will come to an agreement by August. The general gist of the blog post is “wait” – see what 3 offers. One expects 3’s deal will be stronger than competitors to make up for the fact they missed out on the launch hype. And that, in turn, might apply pressure on other providers to rethink their offerings.

Sounds like good advice to me.

Suckered by the hype

With all this in mind, I’ve been saying to friends for the past few weeks “I’m going to wait a few weeks after the iPhone is launched before I buy one – just to see if there are any issues and to see what 3’s offer is.”

But walking past the lines at the Apple store, Optus and Telstra stores, I got sucked in and decided to at least find out if I could buy an iPhone outright and use it with my current carrier (which is 3).

I went to the Apple store, expecting that as the maker of the device they would be selling the iPhone outright. I waited until the line was a reasonable length and joined in. A friendly Apple staffer was walking the line and asked me “You’re here for the phone?”. Umm, yes. “Do you have 100 points of ID?”. Check. Yep. “OK, so you know we’re not selling the phone outright?”. Umm. No.

I find it quite incredible that Apple are only selling iPhones on plans. But the friendly staffer suggested I try Telstra (across the road) as they were selling it outright.

So across I went, into another line. I get to the (clearly exasperated) staffer. “So what are your plans?”, I ask. He silently hands me a bit of paper (clearly exhausted). Same crap plans. No mention of outright purchase. “So can I buy this outright?” Yes, I’m informed. “But the phone is locked to the Telstra network and we can’t unlock it.” What do you mean, you can’t unlock it? “I don’t know. ‘They’ just said we can’t unlock it. I think it’s something to do with the demand.”

At this point I’d spent enough time in lines to decide I should stick to my original plan and wait for 3’s offering, so I didn’t bother going to Optus and press the issue.

So on the launch day of the iPhone, I was unable to buy one outright… Seems like an odd sales strategy to me. But perhaps, in the end, I’ll be better off being made to wait. One can only hope…

Bad for industry

As an aside, John Allsopp on the Web Directions blog talks about how this affects the web development industry more broadly in iPhone in Australia – now for the bad news.

OK, in the scheme of things, this is not really a huge deal. World hunger is a big deal. But, this is not just the lament of some yuppie who wants a cheaper phone deal. To me this will actually have a huge impact on Australia’s capacity to become a serious player in the next wave of web innovation – mobile web applications and services. People simply won’t use mobile web services (except the “free” access to carriers own services – my bet is that this will come soon enough). Which means little if any incentive for local companies to innovate in this, a space with almost limitless potential. In markets with inexpensive data charges, all the innovation will take place, and when affordable mobile arrives here, those innovators will be ready to swoop on our market, with local companies in no place to play catchup.

I have to agree.

Research project

Business & marketing 2.0, Ethical clothing

Ever since I first worked with Digital Eskimo (while I was working on the Future is man made site re-launch for WWF) I’ve really admired their approach to using qualitative research methods to underpin their work.

The research we did for the FiMM site was really valuable and useful – giving us a much clearer picture of where sustainability fits in people’s lives and what sort of site/support people would find most benefit in.

So, in starting down the path of launching a new business, I felt strongly about embarking on a research project to underpin the brand and product development.

Keep reading over the jump for more information about the research process.

Update: I was remiss in not mentioning that I was first introduced to the idea of ethnographic style research for business and the web by Stephen Cox, who is now doing great work at News Limited.