Category Archives: Business and Economy

Measuring the economy by looking at midnight Walmart shoppers

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There are all sorts of figures and statistics that are used to measure how the economy is doing. This NPR story introduces a new metric: looking at midnight sales at Walmart on the first day of the month.

Wal-Mart noticed that sales were spiking on the first of every month. In a recent conference call with investment analysts, Wal-Mart executive Bill Simon said these midnight shoppers provide a snapshot of the American economy today.

“And if you really think about it,” Simon said, “the only reason somebody gets out and buys baby formula is they need it and they’ve been waiting for it. Otherwise, we’re open 24 hours, come at 5 a.m., come at 7 a.m., come at 10 a.m. But if you’re there at midnight you’re there for a reason.”

And so Wal-Mart has changed its stocking pattern. It brings out larger packs of items in the beginning of the month, and smaller sizes toward the end. It makes sure shelves have plenty of diapers and formula.

This is a creative data source – but we would need more information before making broad conclusions about the American economy. Do other stores experience similar spikes? How big of a spike is this? What Walmart locations have seen the biggest jumps?

It strikes me that Walmart probably possesses a treasure trove of data that would be very interesting to look at.

Rebounding from the economic crisis in Dubai

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The economic crisis didn’t just affect American building or construction. The city that has grown out of the desert, Dubai, was also strongly affected and now is making a slow recovery:

Chastened after an extravagance-fueled debt crisis last year at Dubai World, the state-run investment giant, Dubai is getting back to basics.

Glamorous whimsies like a giant artificial island shaped like a palm tree are giving way to more pragmatic priorities meant to revive Dubai’s status as the dominant trading hub between the industrially advanced West and the oil-rich Middle East.

The article goes on to mention a number of factors that need to accompany building and development for it to last long-term including stable governance and a diversified economy.

One factor that is cited as aiding Dubai’s recovery is its established infrastructure.

World War I reparation payments from Germany to end soon

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From the dustbins of history, CNN reports that Germany will on Sunday (October 3) make its last reparations payment from World War I. Here is a brief history of the payments:

The initial tally in 1919, according to the German magazine Der Spiegel, was 96,000 tons of gold but was slashed by 40 to 60 percent (sources vary) a few years later. The debt was crippling, just as French Premier Georges Clemenceau intended.

Germany went bankrupt in the 1920s, Der Spiegel explained, and issued bonds between 1924 and 1930 to pay off the towering debt laid on it by the Allied powers in 1919’s Treaty of Versailles…

Germany discontinued reparations in 1931 because of the global financial crisis, and Hitler declined to resume them when he took the nation’s helm in 1933, Der Spiegel reported.

After reaching an accord in London in 1953, West Germany paid off the principal on its bonds but was allowed to wait until Germany unified to pay about 125 million euros ($171 million) in interest it accrued on its foreign debt between 1945 and 1952, the magazine said.

In 1990, Germany began paying off that interest in annual installments, the last of which will be distributed Sunday.

I had no idea that these payments were still being made. I don’t know the answer to this: are reparation payments between nations still a common method for helping to rectifying the wrongs of war?

It is also a reminder of the major consequences of World War I, a war that gets a lot less attention in the United States due to a smaller US role and a majority of the fighting taking place away from American shores.

Becoming more popular in New York City: the pod hotel

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In order to provide hotels at a cheaper price in New York City, several groups are building “pod hotels.” These hotels are characterized by their small, but well-appointed, rooms:

With their wood paneling, velvet benches and Oriental carpets, most of the 150 rooms occupy just 50 square feet (4.6 square meters) and recalls boat cabins. A large mirror hangs on the wall to counter any claustrophobic feelings…

These hotels promise “micro-luxury:” air conditioning, a safe, a flat-screen television and free Wi-Fi. The Jane also offers its clients a bathrobe and slippers.

“We don’t sell a bed, we sell a room,” said Pod Hotel managing director David Bernstein. “The atmosphere is much cleaner and more upscale than in a hostel. The size is really what makes them affordable.”

As long as they can avoid the New York problem of bedbugs, I can imagine these would be popular in a city full of expensive hotels.

An innovative revenue stream for suburbs: exclusive advertisements on city property

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Naperville, Illinois is considering a new tactic to provide for funds for the city’s coffers as there is nearly a $5 million budget shortfall projected for next year:

Naperville is considering an unusual option for long-term revenue: giving corporations exclusive rights to advertise on city property.

In a memo to the City Council this month, finance director Karen DeAngelis cited several examples of how this could work, including a program in which KFC pays for pothole repairs in cash-strapped cities in exchange for stamping the fresh asphalt with the chicken chain’s logo.

Naperville also could sell the naming rights of buildings or allow companies to advertise their products as “the official drink” or “the official burger” of the suburb for a fee, DeAngelis said.

“It’s not something we’ve done before, so we would be on the leading edge and we would need to be careful,” she said in an interview.

This might lead to some very interesting scenes – “Naperville City Hall, brought to you by Geico.” I imagine such ads might be attractive to businesses for the amount of people who might see them, particularly in a vibrant downtown Naperville.

Would a majority of suburban residents go for this? As one expert suggests in the story, this could lead to some negative repercussions and a process of “NASCAR-ization.”

If the city of Naperville couldn’t raise a significant amount of money with a program like this, would it be worth doing it on a small scale or would it just lead to more trouble than its worth?

How much fun should one have at work?

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Schumpeter at The Economist takes a look at the idea of having fun at work:

ONE of the many pleasures of watching “Mad Men”, a television drama about the advertising industry in the early 1960s, is examining the ways in which office life has changed over the years. One obvious change makes people feel good about themselves: they no longer treat women as second-class citizens. But the other obvious change makes them feel a bit more uneasy: they have lost the art of enjoying themselves at work…

This cult of fun is driven by three of the most popular management fads of the moment: empowerment, engagement and creativity. Many companies pride themselves on devolving power to front-line workers. But surveys show that only 20% of workers are “fully engaged with their job”. Even fewer are creative. Managers hope that “fun” will magically make workers more engaged and creative. But the problem is that as soon as fun becomes part of a corporate strategy it ceases to be fun and becomes its opposite—at best an empty shell and at worst a tiresome imposition.

A good point: forced “fun” is hardly fun at all.

A question: what really makes work satisfying for people? Having fun? Collegial relationships? Meaningful tasks? Praise from bosses and higher-ups?

Another question: what can’t this “fun time” at work be left up to the employee’s discretion? One might prefer a half hour to quietly read a book while another might prefer a volleyball game. While this means managers may not be able to rave about how their group came together in an activity, it might provide even higher levels of productivity.

Why add this line in interview about Netflix in Canada: “Americans are somewhat self-absorbed”

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In an interview with The Hollywood Reporter, the Netflix CEO (and co-founder) discussed the company’s new foray into the Canadian market. Netflix prices in Canada will be one dollar cheaper: $7.99 vs. $8.99 in the United States. But the CEO added another line that seems superfluous to the discussion and may not be helpful to his company’s efforts in the American market:

THR: American services when they enter the Canadian market typically charge the locals more than they charge stateside. Why the discount for Canadians?

Hastings: We want to provide an incredible value for Canadians, and it’s the lowest price we have anywhere in the world for unlimited screenings. And anyone can try it for free for a month. It’s pretty addictive.

THR: Are you concerned that American Netflix subscribers will look north and ask for the same discount Canadians get at $7.99?

Hastings: How much has it been your experience that Americans follow what happens in the world? It’s something we’ll monitor, but Americans are somewhat self-absorbed.

I’m guessing more Americans will pay attention now to this than would have before. Whether he is right or wrong about Americans being self-absorbed, why potentially hurt a large market when he didn’t have to?

Generation Y sees the downsides to cars

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A short article from Kiplinger suggests Generation Y has a different relationship to the automobile than previous generations. Rather than viewing them as status symbols, Generation Y sees them as polluting objects and the use of mass transit and car sharing is on the rise.

This has car makers worried:

The trend won’t cause car sales to tank, of course, but the generational shift doesn’t bode well for manufacturers and auto dealers, which for decades have counted on wooing young new drivers to their brands in hopes of cementing lifetime customer relationships.

Gen Yers are a big potential market: At 80 million strong, they represent the biggest generation in U.S. history. Baby boomers are a close second, but millions of them begin turning 65 next year — an age at which car purchases drop off sharply.

There is nothing that guarantees that the American obsession with the car will continue. It sounds like manufacturers will need to change their tack and convince people that they need cars – perhaps it could be tied to ideas about personal freedom.

If this is the case among Generation Y, this has big implications for urban planning and the suburbs.

The importance of having meaningful work

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Recent research suggests that the satisfaction individuals derive from work is not based just on a paycheck but rather on the meaning found in even doing menial tasks:

In several recent studies, social scientists have zeroed in on why paychecks alone can’t explain the link between work and well-being. The evidence shows that people can find meaning in seemingly insignificant jobs and that even trivial tasks make us far happier than no tasks at all.

“We become very dedicated to things it would be hard to be dedicated to if we were perfectly rational,” says behavioral scientist Dan Ariely, author of “The Upside of Irrationality,” published in June. “It turns out you can give people lots of meaning in lots of ways, even small ones.”…

The findings suggest that, although people often yield to idleness, deep down they seek excuses to stay busy, because busyness is happiness. However much Sisyphus rued his meaningless job, the authors conclude, he would have been even more miserable with no job at all.

Interesting findings that would have profound implications for the workplace.

Some quick questions:

1. Do these researchers argue that these benefits of working are linked to human nature or is it a conditioned response based on culture and other factors?

2. What are the long-term consequences of people having no work? If work is meaningful, what happens if people cannot work for different reasons (health, unemployment, other possibilities)?

3. How many workplaces (or what percentage) explicitly talk to employees about the meaningfulness of their individual work?