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Craftblogging: The Backlash Against Mass Produced Fashion

RebootAs brands like Gucci attempt to grow their businesses by leaps and bounds, there will be consequences to flooding the market. Ulla-Maaria Mutanen, who manages the Hobbyprincess blog, had a provocative discussion about the trend against mass brands in Europe and Japan.

An increasing number of people prefer to buy their apparel from a designer someone has recommended, or one that they personally know. Ulla describes her concept of craftblogging - producing hand-made fashion items and publishing them on weblogs.

Ulla goes on to provide more concrete examples on her blog, showing how concepts like iLife could be modified to enable consumers to interact more frequently with their tailors; TypePad could be used to build a brand, self-promotion and begin selling items via PayPal and eBay; and last.fm coold be modified to provide a recommendation system for fashion.

The challenge is to capture real-time information about consumer desires, then act. I've written how this could work for newsrooms; the Economist has a great piece on how Zara is doing this for fashion in Europe. When Spain's Crown Prince Felipe and Letizia Ortiz Rocasolano announced their engagement in 2003, the bride-to-be wore a stylish white trouser suit - which caused a stir among those concerned with royal protocol. Zara took that look and made it available in its stores almost instantly. Instead of trying to create demand for new trends in the summer and winter seasons using the catwalks of fashion shows, Zara studies the demands of the customers in its stores and then tries to deliver an appropriate design at lightning speed.

A retail information network - a la StoreTrak - that could capture real time information on consumer desires, analyze it, and make that information available to a network of independent designers, who would then remix those designs, using their own sensibilities to do their own riffs, would be a very nice addition to couture.

"The Gap" in Percentage Rent

Gap_logoOnce upon a time, a certain retailer made the argument that if you had a kiosk in a mall, sales made through that kiosk were different than the normal exchange of money for physical goods. That retailer went on to assert that because of that difference, they should not have to pay percentage rent on goods sold via the kiosk.

Other retailers created separate divisions that operated online exclusively, thinking this would enable them to  avoid paying sales taxes to states where they have no physical presence, pursuant to a 1992 U.S. Supreme Court ruling.

A little-known ruling in California may put a dent in that line of thinking. California's 1st District Court of Appeal in San Francisco ruled against Borders, ruling May 31 that the company's website and retail stores have been too intertwined to call themselves separate companies. The three-judge panel cited in-store advertising for the website, receipts that said, "Visit us online at http://www.borders.com " and the ability of customers to return online goods at retail stores. The judges also noted that the companies had board members in common and shared a similar logo.

Shopping centers have long argued for tax fairness, as opposed to new taxes. As municipalities and others reach their breaking point in budgeting for police, fire, schools, and other critical infrastructure, people need to think harder about what it really takes to fund the places they have chosen to live in.

Envisioning The Future of Cell Phones

CellphonesastrainticketsAs someone who used to be about 10 years ahead of his time, I've learned that just about every idea, however outlandish, is fair game. For example, a recent notion of  mine putting cell phones on dogs and cats - so guilt-ridden owners can talk to their pets from the road - has been done in Korea, according to CNN. The Textually blog reports on a step even further where the collar detects the dog's emotional state before sending a warning to the owner either via email or SMS. Woof.

So, when thinking of tomorrow's smart phones, we're literally talking about the horsepower of today's most powerful computers - like IBM's BlueGene/L, which can predict weather just a couple of hours in the future for a region as small as a football field.

So it was with great interest I read a speech by Tomi Ahonen, author of Communities Dominate Brands. The Canadian industry association, CWTA, invited him to deliver the keynote to its celebratory event celebrating 20 years cellular telecoms in Canada, and asked him to look 20 years into their future.

I pretty much agree with much of what he says: credit card functionality on phones by 2010, retail acceptance of mobile payments by 2015 to the point where more payments take place over phones than traditional credit cards, and built-in video projectors in phones by 2020. Remember the scene in Star Wars where Luke sees the image of Leia for the first time, floating as if by magic? We're going to go away from watching video on postage stamp-sized screens, to heads up displays similar to those currently pioneered by Seattle firm Virtual i-O. Lay your phone on a table, and voila - a talking head appears, probably a bit smaller than mine.

Given the audience, he is wise to be silent on issues like tax and what happens in a global economy. The explosion of mobile telephony and cable television across the world in the 1990s, partially made possible by governments who saw opportunities to modernize, was a sign that countries recognized the importance of a modern communications infrastructure. Increasingly complex mobile integration issues, and the question of how taxes are calculated, signals a coming world politic that makes the current European Union fracas look like a child's playground. 

Link: Full text of 20 Year Future of Mobile Telecom

Inside New York's Restaurant Week

Timewarner_circle_1This next week marks the latest NYC "Restaurant Week" where restaurants all over the city offer a three-course lunch for $20.12 (and some even offer dinner for $35). Restaurant Week is a great opportunity to sample a restaurant that may usually be out of your budget.

Heather Cross of About.com (now owned by the New York Times) has compiled a great list of participating restaurants to visit. (Bummer - Masa isn't on the list.) I think restaurant reviews are a prime opportunity for blogs and as proof, here are great entries from NYC Eats, A Full BellyLuxist, and Gridskipper.

One way to size the New York restaurant business can be found in a recent Times article profiling Seamless Web, a restaurant ordering business that operates exclusively in Manhattan. The company made $50 million in revenue last year and CEO Jason Finger expects to reach $80 million in sales this year. The company currently serves more than 100,000 people and about 750 restaurants in New York, or about $67,000 in revenues per restaurant. Yowza.

Seamless Web wouldn't be the success it is without vigorous cooperation from city officials. That organization, NYC & Company has become arguably the best advocate of local businesses in the country. From launching a 311 service (like 911, but only if your emergency is finding a great place for dinner) to creating a Chief Marketing Officer position to find innovative ways to generate revenue without raising taxes, the organization has created examples that its fellow ShopAmerica members have emulated.

Link: NYC & Company's New York City Restaurant Week 2005

The Luxe Experience: What We Can't Do Without

AirplaneperksWall Street Journal asked its readers what airplane perk they couldn't live without. Surprise - soft drinks came rated #1 by a large margin.

Coke, and to a lesser extent Pepsi, have long based their brand architecture around the notion of refreshment, as shown by the list of past Coke slogans that have used the word 'refreshment'. And what do airline passengers want to do, but be given an oasis from the outside world, for however long or short the flight time might be?

We have just begun to see a resurgence in studies of the importance of our sense of smell, taste and hearing in our overall experience of a brand. It just might be that the combined smell and taste of our favorite beverage is just what we need to relax.

Truly the pause that refreshes, indeed.

Link: WSJ Poll (subscription required)

The One and Only Robb Report

RobbreportbestJason Binn, move over. It's time for the annual "Best Of The Best" report from the Robb Report, who is also the publisher of Worth magazine.  It features premium-quality automobiles, yachts, jewelry, vacations, wines, spirits, cigars, fashion in 58 separate categories, providing a unique view of the international luxury market.

My programmer friend Jozsef Nagy never told me about the Four Seasons Gresham Palace Budapest, which was named as the best hotel. And I'm a little peeved at my friend Siriwan Sellers for not telling me about Trisara, in Phuket, Thailand, which offers an ocean-front four-bedroom villa for $3,960 a night from now to Halloween. With friends like those, no wonder I need a magazine like this to tell me how to spend my time.

A search on Google News reveals the top three ranked Robb Report reviews are all air travel providers: Skybridge (private charter jet brokers), Marquis Jet (private jet cards) and NetJets (fractional ownership). It looks like their SEOs, at least, are doing their work.   

WiFi in Coffeehouses: Driving Traffic vs Driving Sales

CoffeehouseI wanted to mention a great article in the New York Times (registration required) on the impact of adding wireless access to coffeehouses. - and the competitive pressure to keep up with the Starbucks of the world. Victrola Café & Art has bucked the trend and has taken out not just their WiFi, but the power outlets as well.

Glenn Fleischman has an excellent article on the social issues that led to this change in policy. "Worse than just the sheer number of laptop users, is that many of these patrons will camp six to eight hours -- and not buy anything. This seemed astounding to me, but she said that it was typical, not unusual."

There are positive things that come out of having broadband access in a marketplace: faster credit card authorizations; cheaper telephone costs through VOIP; streaming video into the store, and so on. All of these great things are for naught if the sheer congestion of non-paying customers causes paying customers to stay away in droves.

Starbucks is trying to create a specific environment, a specific mood, a special place. Starbucks employees here in Denver have told me that they don't mind people coming into their stores just to use the WiFi, without purchasing a single item. This seems to be true in my conversations with Starbucks employees in other cities.

Filling seats can be well and good but there are hidden costs, in the form of congestion and parking. It seems to me that if you're going to put broadband into your venue, you need to have a very well thought out plan that uses Internet access to create incentives for incremental sales.

Colorado 51, Atlanta 48: Inside Arena Football Economics

AflWillis Marshall ran for three touchdowns and caught another as the Colorado Crush defeated the Georgia Force, 51-48, in ArenaBowl XIX, Las Vegas. Kicker Clay Rush kicked three field goals, including the game winner with only three seconds left in the game.

Marshall and Rush may not be household names - yet - but their success on the field is only surpassed by the surprising profitability of the league. The Wall Street Journal reports that attendance hit 1.8 million this year, a 50% gain over 2001 (subscription required). NBC and Fox are broadcasting games live, Nike and Honda are sponsors, and the league will add three new teams next year to the 17 it has now. A group of Kansas City investors paid $18 million for a team, compared to the $400,000 paid by current league commissioner David Baker for the Anaheim Piranhas in 1995.

One reason for the AFL's survival has been its relatively low operating costs, averaging about $5 million a year per team. About half the teams in the league broke even or made money last year, says Ed Policy, EVP of league development and legal affairs. In comparison, the average NHL player salary in the last full season was $1.8 million, up from $271,000 in the 1990-91 season.

With ESPN declining its rights to NHL broadcasts, it triggered a series of events which should be a wake-up call to NHLPA Executive Director Bob Goodenow and player reps like Don Meehan, J.P. Barry, Pat Brisson and Don Baizley. First, it means a tremendous loss of negotiating leverage on TV rights. While the league was intact it essentially had a blank check to expand into new markets, underwritten by lucrative subscriber fees from the satellite or cable operators. That is now gone.   

Second, team valuation is now very much up in the air. Over the past ten years, the valuation of NHL teams has skyrocketed: the Dallas Stars, valued at $53 million in 1995, were valued at $254 million in 2002. But today, even though Fox Sports is a likely replacement for ESPN, the likely end result is likely to favor more established franchises like Boston and New York.

Fox Sports was hurt badly by the emergence of local networks like MSG Network or Altitude Networks. As a result, they've had less economic power in programming negotiations with the likes of Comcast and Time Warner -- less subscriber fees, less money available for the NHL, less money for the players any way you cut it.

Factoring in TV rights, trends in advertising CPMs in NHL games, gate revenue, arena F&B sales, team merchandise, and hypothetical IP TV fees, the new world order just may require a total reboot of the NHL - one that puts a franchise in 85% of the top 25 TV markets, and an average NHL player salary closer to the $572,000 in 1993-94 than the $1.79 million average in 2002-03.

Mobile Phones: The Celestial Jukebox, Revisited

GracenotemobileImagine being able to text message your local radio station and get the name of the song currently playing and the name of the artist.

If your radio station of choice happens to be KTCL 93.3, try calling (703) 286-6454 from a mobile phone.

MocoNews reports on a different implementation by KDDI, who with digital music copyright company Gracenote and BREW developer MediaSocket has rolled out "the first subscription-based digital music download services enabling subscribers to identify and purchase music instantly on the handset". The BREW app plays a song, which is run through the Gracenotes musicID database to identify both song details and upsell opportunities.

Makoto Takahashi, Vice President and General Manager of the Content Division, KDDI, says:

"We've found that offering instant access to music and purchases is very compelling. For the first time, they’ll be able to identify songs they’re hearing on the television, on the radio or another source, and buy related content, such as ringer songs, full songs or albums, at exactly the moment they’re listening to that song."

Radio stations today are nervous about all of these music services - given what amounts to be hidden fees, a minefield of parental consent issues and CAN-SPAM compliance - all of which could give any station's reputation a big black eye.

Link: If you're looking for a more scholarly tract on how music search works, try Similarity Among Melodies for Music Information Retrieval (Adobe Acrobat required)

Wireless Photography

Picasa_1With solid online photography services available from Snapfish, Picasa, EasyShare and Yahoo! Photos, how long will it be until photos are sent directly from your digital camera to such services?

As the relationship between the iPod and iTunes shows, such "lock in" is critical to creating a simpler experience for the consumer. More importantly, though, it creates a trusted environment for trying out new ideas.

Ownership of such trusted environments is critical to sustainability, in my view. For example, upscale shopping centers focused on quality and safety to build environments where consumers felt comfortable about visiting familiar stores like Gap and Claire's Boutique. These environments were architected to make it easy for shoppers to sample concepts that were new once upon a time - like Sharper Image or even Victoria's Secret - and now, new concepts like Ruehl and Forth & Towne.

Online photography services need a business plan for ensuring they are a part of everyday life. If they don't, they're going to either lose out or be bought out by the wireless carriers. Today, Gartner Research projects cameras to be in 68% of all cell phones by 2009...a pretty clear sign of where the world is going.   

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