Retail's New Problem - Consumer Revenge

"Satisfied customers will never be loyal to you. They'll only be satisfied until a competitor does it better." - Tont Hsieh at Zappos

Here is this Week's Issue of The Business Brief

The Markets are waiting on an election.

Personal Log: Shoddyocracy is a term and how it impacts us two hundred years later.

Retail's new problem - Consumer's Revenge

AI - A hot new Podcast

What Keeps Smart People Up At Night

At the end of the day, Be silent no more

The Markets

As someone tells me regularly, "The markets go sideways more often than they continue to rise." It is my belief that the market is still about growth, particularly with AI. There are a lot of new startups raising capital. And I am not referring to those that use APIs to create and sell services. The investments are going to those with developments around LLMs and Generative AI. According to CNBC, 40% of all investment capital is going to Generative AI startups. Overall, corporate investments in AI are also on the rise.

The question is how organizations will evolve and how this will impact the workplace. At first, this may seem benign. The pressure to improve productivity and performance will pick up pace. You may want to read this from The Toronto Star

Personal Log: Shoddyocracy

Nope, I didn't create this word. It comes from the 19th century and was popularized at a grim time in the US, the Civil War. You see, the pressure was on them to produce and manufacture so many products that they took a lot of shortcuts. And it wasn't just shoes, clothing, and military equipment. It was also medicine. First, we know that drugs of the era weren't that reliable, but then, because they couldn't get enough, they would dilute it with other chemicals that were never tested to be fit for human consumption. People were injured or died.

Yet there are stories every day in the news about faulty equipment, from cars and appliances to food and medications, all being recalled. Sure, there are watchdogs to prevent and investigate. However, quite often, there are injuries and even deaths. All kinds of issues come to mind. We still make clothing with PFAS, and it's seeping into our water. Over 90% of Americans and Canadians have it in their bloodstream. This Government of Canada report should worry all of us because this family of chemicals is linked to cancer.

In 2008, a milk and baby formula manufacturer in China adulterated the product with melamine. The chemical in tests gives the appearance of higher protein content. Of course, there wasn't additional protein, and babies died. I happened to be living in China when this was happening.

Even some well-known brands, especially appliances such as dishwashers and washing machines, were manufactured and sold with flaws, from door locking to uncontrollable vibrations and machines needing multiple repairs early in their lifecycle. Many of these led to lawsuits because of failures, injuries, and damage.

Retail's New Problem - Consumer Revenge

Here's what TEMU, SHEIN, and others represent to consumers. They have been paying you too much for made-in-Asia products, and the Asian companies are bringing similar products to them for a lot less. That is the biggest problem retailers face.

I hear retailers complaining about the competition and lower prices from online sellers like TEMU, SHEIN, and VEVOR. It is low priced and has unknown brands and quality. Often, you end up getting what you pay for. Consumers are lured because of our inflationary prices, which are higher by 15-20% compared to 2020. Will they put up with Shoddyocracy? Hint!

But consumers are savvy. They see the origin of the product; it is often from Asia. An intelligent consumer will recognize that TEMU and SHEIN may not have the same quality, but they do have lower prices, so why pay local prices?

Of course, the word on the street is that TEMU and SHEIN's sales will plummet. No, they won't; it's their rate of growth that will slow down. It doesn't mean consumers will suddenly return to buying local and better.

But if the solution is to increase taxes on these out-of-nation retailers, consumers will double down on their revenge, perceiving that local retailers charge them too much.

Unless!

Local retailers get smart and capitalize on two things—assurance of quality and the best price.

Fundamentally, consumers are not loyal. They will shift to save money, which is a big problem for retailers. That's why 沃尔玛 and Costco Wholesale will continue to perform well; they understand the consumer well.

Retailers now know they have two problems: consumers on Revenge Saving and Competitors with AI capabilities that will beat them at price and product offerings.

Artificial Intelligence: A Hot New Podcast

I deliver many presentations, one of which is "The 7 Principles of Telling and Selling Your Brand Story." I wrote a 900-word essay on it and posted it on this site called?NotebookLM ?by Google. Now, here's what's cool about this: This site took my 900-word essay and converted it into a podcast, about 14 minutes in length.

You can listen here: PODcast of 7 Principles to Tell and Sell Your Brand Story. What's unique about this is that the voices are completely AI, and it took less than 15 minutes to create. Oh, and by the way, the podcast is called DeepDive, and it is becoming popular!

This is why I am so heavily vested in AI. It is a game changer.

PESTLE: What keeps smart people up at night

First, why would these things keep them up at night? There are known and unknown variables, and each has a cause and effect on personal lives, work, business, investing, and unwanted outcomes.

Here are three of the top issues: `

Business continuity: In this environment of continuous technological change, especially with AI, the push to invest in, transform, learn, and adapt to this technology grows daily. And there is uncertainty as this is just emerging, and it won't fizzle out. However, the overall concern is how much of an impact it will have on consumers, jobs, and the ability to compete. Its capabilities are growing exponentially every day, and our ability to keep up isn't.

What Chips Away At Democracy: Two wars rage. I am not going to debate the virtues of either. However, these attacks that started them were attacks on democracy and the right of a nation to exist. In the case of Ukraine, 3,000 North Korean troops are near the border of Ukraine at the invitation of Russia. Iran provides missiles and drones to Russia, and China is buying Russian oil so that their nation doesn't collapse. The other war started with an attack on Israel. There are four smaller nation-states in the region whose military is funded by Iran, and apparently, some technology from North Korea has also found its way there. On Friday night, Israel fired back at Iran for their attack. If there was a time of high risk for escalation, this is it. However, the human non-combatant lives lost are the biggest tragedy to democracy, and those who have started and funded these wars are the real warmongers.

Global Economy: Pivot, Stagnation, Deflation, Inflation, Recovery or Recession? We are seeing it all transpire right now. Germany's economy could stagnate because of a short recession. China continues its deflationary path and could take parts of Asia with it. Inflation, well, Canada seems to have prudently tamed it, and the US sees the same signs. However, globally, prices are still higher and rising even if at a slower pace. But there are elections underway and others waiting for one; the question is what kind of pivots will occur. Right-wing governments promise less regulation and threaten changes to global trade along with lower taxes. Left-wing governments promise more for everyone. Where will it land? And all of this can unravel with another crisis, and there are plenty of those lurking.

At the end of the day...Be silent no more

I was at a function—it's not important where—when I ran into four friends. All of them are elected officials representing all walks of ideology. Two are local politicians, one provincial and the other federal. Some are more right, and others are more left of center, but they are all good people with good intentions.

I live in a town where the local newspaper, previously owned by the Toronto Star, was shut down. Today, residents have to sift through their social media accounts to see what is happening locally. But generally, unless something serious happens, about 140,000 residents have no clue what is happening except through gossip and if you subscribe to a regional online news outlet.

I am a friend of the media because it is very important to democracy, regardless of whether some politicians want to call it fake news. But something worse is happening in the absence of true editorial investigation and even opinions. Voter turnout is sliding because few people subscribe to paid news and are less informed. Therefore, the lack of an abundance of collective voices against this or that leads to what you don't want to happen. How do we know? When the votes become less diverse or vote in blocks, it is a sign that we are no longer inclusive and united. That is followed by apathy and beliefs that you can't make a difference. You can make a difference, just not in silence.

Thank you for reading this week's issue of The Business Brief.

For information about speaking engagements you can reach me here: [email protected]

#retailing #strategy #ceo #technology #innovation #politics #economy