This practice of taking executive recruiting in-house has produced substantial cost savings at GE, as well as Coke, Pfizer, Microsoft and Nike.  This new way of operating is one example of what we have termed Rampaging Efficiencies at U.S. companies.  But while it has produced savings in the tens-to-hundreds of millions of dollars at these corporations, it has resulted in substantial revenue declines at the talent-search companies.  No wonder the search giants are now acquiring leadership consulting companies in an effort to broaden revenue streams.  What happens when the corporate in-house recruiters also branch into in-house leadership consulting?

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Could such an offering eventually become the moneymaker the Postal Service needs to replace the fall off in first class mail over the past several years?

If anything, such an offering, should it eventually be broadly offered in many cities, would be another enabler of the changing nature of retail, toward smaller stores and online shopping and fast delivery. Americans have increasingly found such convenience desirable, especially when compared to gassing up the car and zigzagging among various big-box stores and malls.

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For one, the mailbox is answering the call for delivery of online purchases.

Amazon is now teaming up with Staples, Radio Shack, 7-Eleven and Albertsons for its Amazon Locker Service.  The physical retailers will install Amazon lockers in their stores, allowing customers to buy from Amazon and ship packages to the lockers and then pick them up later.

As we have noted in our New American Lifestyles context, individuals are increasingly moving to urban locations and these locker services, also offered by startups BufferBox and ShopRunner, may prove beneficial to those living in apartment buildings and urban environments.

For another example of the past offering a solution for modern problems, the general store is proving to be a valuable retail model in some cities.

Facing a mass exodus from urban to rural areas and a general population decline that was forcing retailers to close, residents of the German village of Barmen formed a corporation and funded the creation of a village center in 2006.  Today the 150 square meter store sells basic staples and also has an ATM machine, post office, travel center, a place to register a car or renew a driver’s license and has a doctor who comes once a week from a neighboring town.

Those who run the Barmen store have gotten so many inquiries from other towns that they have created a separate consulting firm and estimate that they have helped set up about 10 other stores, none of which are losing money.  They have another 25 stores in the works.

According to one of the Barmen consultants, the most important element of the village store is the café in the back.  While the store can’t compete with discounters on price, or with upscale supermarkets on variety, it can offer a community feel and an experience.

Simplicity (the limited inventory), Connectivity (the community of the town center) and Experience (the café) are three things that are making these general stores a success and are also three of the four items, along with Restraint, on our American Consumer Values Hierarchy.

American retailers, faced with a myriad of challenges, might want to look to Germany for some ideas.

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That was President Ronald Reagan’s perspective on international diplomacy.  Increasingly, that is advice all individuals, all the time, need to apply.  On Amazon.com, for instance, roughly 80 percent of all reviews are four stars or higher, a positive perspective that defies human nature.  Yelp!, which knows that fake reviews undermine its entire business model, claims a proprietary fraud-detection system stops at least 20 percent of all reviews before they reach the public.  According to computer scientist Bing Liu, who studies online fraud, roughly 30 percent of all reviews across the Internet are fraudulent.  Yet, 70 percent of global consumers trust online consumer reviews, up from 55 percent just four years ago.  Review fraud is increasing, and trust in those reviews is also increasing.  Is this ignorance or indifference to accuracy?

The Reagan perspective needs to be used much more widely than just for consumer reviews on the Internet.  A recent study of biomedical journals discovered that use of manipulated data or fraudulent professional reviews has increased 10 fold since 1975 – and that study only counted frauds that were caught.  In September alone, several journals, including Experimental Parasitology and Pharmaceutical Biology discovered that nearly 30 papers had made their way to publication by using fake peer reviews.  The reviews, which are routinely solicited by the journal to assess the papers’ worthiness for publication, were fraudulent, most commonly being reviews by fake professionals created by the authors themselves.

The Internet has put an enormous amount of information at everyone’s fingertips, and now those wanting to use that incredible resource are having to deal with the effects of the intentional polluting of that information. Has deception and fraud become so commonplace that those trying to detect it constantly lag the deceivers?  What does that say about nearly all kinds of societal interactions, including those in retail, advertising, medicine, equities, religion, politics, education, marketing and on and on?  Is there any place individuals can place their trust?  Is there room for an independent, non-aligned business to validate information?

Hmmm, fact checking, the new black.

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At the peak of the YouTube coverage of the event, there were approximately 8 million concurrent viewers from around the world, likely a record for YouTube.  The company claims that they had millions of live viewers during the first Presidential debate, and during a peak of YouTube’s Olympic coverage, it delivered video for more than a half million concurrent live streams.

Google is slowly aggregating a viewing audience for live events, and offering its streams to a global audience is certainly making that happen more quickly. The more live events Google can offer, the easier it will be for on-the-fence cable subscribers to cut the cord.

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Between 30 and 40 percent of everyday conversation consists of people talking about themselves.  For online social media, that figure jumps to 80 percent.  Evidently, without our counterparts in personal, real-world conversation being able to roll their eyes, groan or even say “stop” (in various ways, both polite and not-so-polite), we humans will just talk on and on about ourselves, a reality that has led to more than 1 billion people on Facebook, constantly updating what they have to say about themselves, and to Pinterest “pins,” providing users a way to visually “talk” about themselves.

A recent Harvard study revealed that sharing any information with others triggers a pleasurable neurochemical reaction in the brain but that sharing with others information about the self triggers an even larger shot of the neurochemical dopamine.  For some time, scientists have known that such a physiological shot of pleasure accompanied winning food and having sex and that similar effects came from acquiring money. But this was the first study to prove that the body was particularly pleased and therefore offered larger rewards for something researchers called “self-disclosure.” That certainly gives a vote of confidence for the “quantified self” movement, which encourages individuals to monitor their activities and vital signs and to share their data with others.

Meanwhile, other researchers have focused on what they call “addiction transfer.”  For instance, many patients who have undergone gastric bypass surgery to suppress eating and control obesity have subsequently become addicted to something other than food, such as drugs, alcohol, cigarettes and the like.  Pursuing that curiosity, scientists at Brookhaven National Laboratory in New York and the U.S. National Institutes of Health in Maryland have discovered that the body has specific receptors to control the release of dopamine.  Many people have fewer such receptors and thus are able to get addicted to activities that prompt the brain to unrelentingly release the neurochemical.  In other word, when denied access to one kind of addiction that triggers a dopamine fix, those short of the control receptor transfer to something else that can supply the pleasure shot.

And so, now that we know talking about ourselves can trigger the dopamine shot, researchers might have inadvertently discovered another kind of “talking cure,” the name typically applied to psychotherapy. The 80 percent of social-media conversations that focus on “self-disclosure” suggest that this new form of talking cure might be successful.   Is society really OK with a wild spread of social-media addiction?  Facebook stockholders certainly hope so.

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For the past few years, we have written about the ways in which consumers have gained control over their shopping experience, and one of the results of that control is the beginning of the end of the big-box era  (see, “The Consumer in Control Goes Shopping” http://www.inferentialfocus.com/our-discipline/current-topics/).

Walmart, for one, appears to realize that, if it wants to remain a retailing power in this new environment, it will need to improve the shopping experience for its customers, both online and in the stores.

The company has built a new search engine from scratch in order to better help customers find what they are looking for. Walmart is managing its own search in-house, in a similar manner to online competitors Amazon.com and eBay, but in opposition to its conventional brick-and-mortar peers that mostly outsource their search technology. Walmart’s new semantic-search engine technology, named Polaris, includes something it once called the “Social Genome” – a way of enabling discovery using algorithms that rank results via social signals from around the web. Walmart claims the new search engine will increase by 10 to 15 percent the likelihood that customers will complete their purchase.
Walmart has also begun testing an iPhone-based self-checkout system in one of its Arkansas stores, making it the second major retailer (aside from Apple) to try such a system.

 
Over the past few years Walmart has purchased small technology companies such as Kosmix, OneRiot and Small Society and combined them to create WalMart Labs, which the company is using for digital innovation.  Walmart’s low prices will still be a draw for many consumers, but in an era where consumers also value simplicity and experience, it won’t be enough.  We expect Walmart to continue to aggressively address the digital side of the retailing experience, and for others big-box retailers to follow suit.

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We’ve written in the past that individuals are willing to give up their information, or at least look past privacy concerns, if they were getting something in return, and companies such as Personal would appear to be well positioned to take advantage of that perspective.

However, as we have discussed recently in a context we call the Data Arms Race, companies are now swimming in information, and many have successfully gained valuable consumer data without paying anything to the consumer.

Additionally, as cyber-criminals well know, something as seemingly valuable as a credit-card number now sells for only a few cents on the black market because so many have been stolen that the market for them has collapsed.  That is, information is easy to get.

It would appear to us that while companies value data more than ever, they likely won’t pay the consumer much for it.

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We’ve written about the ways in which producers of other goods are attempting to eliminate the middle man and sell directly to consumers and now some book publishers are following suit.  It appears that the publishers are more afraid of Amazon’s power (60 percent of the e-book market) than they are of piracy.  Can these publishers effectively dent Amazon’s profits, or is it too little, too late?

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While the focus of the announcement is on the sales tax, we see an even more intriguing possibility as Amazon builds these distribution centers. Amazon has previously announced the desire to offer same-day shipping, which in part explains the company’s recent purchase of robotics-firm Kiva Systems. Could Amazon be gearing up to launch same-day shipping in the densely settledNew York City metropolitan region? With transportation costs high, we see an increased desire among consumers to avoid driving from big-box store to big-box store to find an item. Amazon appears to be getting ready to service these convenience-oriented customers.

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