arc

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On November 20, 2016, arc commented on Is Nike the Next Big Tech Giant? :

Thanks for the post! The efforts Nike has done in bringing the digital world into the athletes’ world certainly deserved a blog post here. Nike has created a complete virtual environment that tries to mirror the marketing efforts done at the store, on TV, and with the sponsorships. Integrating the technology into the shoes and apparel itself is the new frontier for sport goods companies, and Nike has the app experience to serve as the initial point for that strategy.

However, I’m not entirely sure if the market is big enough at the moment for a radical transformation in the industry and a massive migration to smart clothing. The experience of the Apple Watch shows that not everyone is willing to use a new technology just because it’s new. Same can happen with clothing, only the real die-hard athletes will see the value of paying more to get intelligent shoes. The average user might be willing to change some of that technology for lower prices. It’s a challenge for the company to keep pushing the boundaries of the industry without leaving a large number of customers behind.

Great post! It’s interesting how technology can be helpful for companies to create incentives for good behavior. There’s significant potential for insurance companies in this area. However, it requires a lot of commitment from the company to put a good product in place. The product should be attractive for the user, protect the company from “crazy coupon ladies” that outsmart the system as Catherine Brown mentioned in the previous comment, and protect personal information from unauthorized use. All of this require a lot of resources that many companies have not been willing to invest until now…

I also found very interesting that it’s a South African company the one that it’s leading the innovation in the insurance industry. Insurance is the next frontier for large insurance companies, who see the emerging African economies and the rising African middle class as the next big market for general and life insurance [1] [2]. Developing great add-ons for the public will certainly help Discovery face the competition and they can also be a competitive advantage entering other African market.

[1] https://www.towerswatson.com/en/Insights/Newsletters/Global/emphasis/2016/emphasis-2016-1-sub-saharan-africa-insurances-new-frontier
[2] https://www.ft.com/content/bc87016a-2430-11e6-9d4d-c11776a5124d

The arrival of the Internet of Things will definitely change the business model for even the most traditional businesses, like utilities. The pain of doing the transition will be higher for the first entrants and produces significant externalities for the rest of the industry, FPL’s move in Florida will certainly ease the smart meter transition for gas and water companies in the region.

Companies like FPL should use these new technologies as a way to deliver more value to their clients. For example, if the system detects a sudden increase in consumption, FPL could get in touch with the client and give recommendations for an efficient energy use. In the case of a water company, these sudden increases might suggest a leakage and the company would be able to help the client to find it. That way the company also keeps an edge over alternative generation/distribution sources.

However, I’m not sure if utilities companies are up to the challenge. Unrivaled for decades, utilities companies are not known for their innovation and their company structures are not designed for it. Using new technologies require more than just buying hardware and software, but also change the way the companies work [1] and there’s the biggest challenge.

[1] https://www.sap.com/bin/sapcom/ko_kr/downloadasset.2014-10-oct-28-03.ceo-perspective-the-internet-of-things-for-utilities-pdf.html

On November 20, 2016, arc commented on At Nordstrom Lines Just Aren’t Cool Anymore :

Thanks for this post on how a high-end retailer like Nordstrom is also using technology to improve customer experience. The mobile POS should be a tool not only for the moment of the sale but for the employee to get useful information about the client from the moment the customer arrives at the store. Previous shopping history, for example, might be used by the employee to suggest additional products or visiting other sections of the store. It might also make a more personalized experience, for example by not having to ask the address if the item is going to be shipped home. The mobile POS can integrate all the data Nordstrom already has of their customers into the store experience.

However, I was wondering what else Nordstrom is doing to get the customer into the store. Can technology be used to improve the shoppers’ experience while looking for a product? Why would someone go to Nordstrom to buy instead of Amazon other than the fitting room?

Getaround seems a well-thought alternative to the traditional car rental model. No one has been able to create the “airbnb” of cars until now. As the previous comment mentions, most of the friction for potential car lenders are accidents and insurance issues.

With home rentals, airbnb owners take some risk in allowing other people into their homes but it’s limited, a dirty apartment or a new stain on the wall are the expected problems. With cars the story is different. People need to learn how to drive a car and, as most of us would tell, having a licence does not equal being a good driver. A car accident is not unusual for even the best drivers, and the associated costs can go up into the thousands of dollars. Only the less risk-averse owners will be willing to put their cars in the platform.

It’s not clear how Getaround will address this issue in order to scale their model. Giving drivers reviews on the app might help, but it’s not enough to reduce risk in case of an accident. If some sort of alliance with an insurance company could be formed and all car lenders get coverage, it would help to increase the number of lenders and users. The first start-up that achieves this will capture the market.

On November 20, 2016, arc commented on ImaginBank and its war against fintech :

Thanks for the article. It seem banking is finally seeing the need of digitalization that other industries faced years ago? However, I’m not sure that the right strategy is to create a “parallel” virtual bank in addition to the normal bank. Are regulatory limits behind this? Having two banks creates two far from perfect products and more hassle to the users.

It’s understandable that banks like La Caixa wouldn’t want their virtual user to start using the more expensive brick-and-mortar options, but they can impose fees to do it. Moreover, the bank would benefit greatly if it offers the alternative of virtual products and customer service for the current user of the branches.

On November 7, 2016, arc commented on Hershey’s Profits May Melt as the Earth Warms :

Nancy, I imagine most chocolate-lovers are running scared to stock-up on chocolate. Hershey has gone the right way at requiring certified cocoa sources from 2020 onwards. The company should start pushing these practices accross the entire chocolate industry.

However, if the climate continues to change as expected, the company must start thinking now on a plan B for their cocoa sources. It takes almost five years for a cocoa tree to produce its first cocoa pod. [1] Sourcing form a new country would require major investments that would take even longer to be completed. In order to continue in business, the company should start researching where, after the major climate changes we are living, it will be possible to grow cocoa. Chocolate-lovers would be eternally thankful.

[1]http://www.chocolate.org/articles/the-cacao-tree–facts-about-theobroma-cacao.html

On November 7, 2016, arc commented on Is Tyson Forcing Itself Into Sustainability? :

Eric, great topic! Most people don’t know the impact cattle and poultry production have on the environment. Unfortunately, most of the solutions to this problem require a major, almost historic, change in consumer behavior that is unlikely in the short amount of time we have to stop irreversible climate change.

Most of the population in Western countries have meat and poultry as par of their normal diet. Although there has been a major impulse for consuming more fruits and vegetables, the current concept of a balanced diet does not exclude eating animals and the effects of eating meat on the human body are, at best, unclear [1].

The other alternative is to create tissue. However, public opinion is completely against modified food. The experience of the food industry with GMOs show how reluctant people is willing to accept technology in their plates [2].

I was wondering if Tyson has analyzed opportunities to reduce the carbon footprint of their production. Buying a vegan food start-up seem a very small step for a company the size of Tyson’s and it could almost a publicity stunt to deviate attention of the environmental practices in their main business.

[1] http://www.chicagotribune.com/lifestyles/health/ct-should-we-all-be-vegetarians-20151026-story.html
[2] http://freakonomics.com/2014/02/14/why-do-people-fear-g-m-o-s/

On November 7, 2016, arc commented on Make Chamonix ski slopes white again :

Interesting! However, the use of technology can only help ski resorts up to a limited extent, snow from cannons will melt quicker as temperatures rise and there are not enough blankets to cover the Alps. I agree with CC that a more direct intervention on the ski community and their habits both on- and off-season is an idea worth pursuing.

Also, considering the switch to a 4 seasons destinations, Chamonix and other businesses based in the Alps should educate more the general public on how their behavior is affecting the entire alpine scenery year-round, not only in winter. This should also aim at putting more public pressure on politicians, so they approve stricter emissions and pollution controls. It’s the only way we will be able to preserve such a scenery for future generations.

On November 7, 2016, arc commented on United’s Climate Change Challenge (642 Words) :

Has United commented anything on how route planning and therefore, fleet planning, might change in order to reduce their CO2 emissions? The airline industry seems to be going to point-to-point, high frequency strategy that does not seem to be considering the environmental impact of that kind of operation, particularly in long-haul flights. 2 200-people planes don’t consume the same fuel as 1 400-people plane, although the former option makes more sense for most market from a revenue perspective.

It is interesting as well how United has publicly advertised its biofuels program to the general public, even painting one of their planes in a special motive [1]. It seems that the company knows climate change and the impact of airliners in the environment is known by their users. However, agreeing with previous comments, there doesn’t seem to be a real incentive for them to change what the current state of business.

[1] https://www.united.com/web/en-US/content/company/globalcitizenship/environment/alternative-fuels.aspx

On November 7, 2016, arc commented on El niño se convierte en hombre (The boy becomes a man) :

I had no idea El Niño affected areas as far form the Pacific as South Africa. In Latin America, El Niño has been a constant preoccupation for many industries for years. Particularly for mining countries, such as Peru, most of the worries has been related to disruption of the supply chain problems due to problems with key infrastructure: blocked roads, power lines, among others. [1]

This does not mean that water is not a real problem for mining companies there. Most of the operations in these countries have already adapted to operate in areas with restricted water supply since they are located in remote, desert and high-altitude areas. No matter what the problems are, however, communities can play a significant role for the mining companies and its in their best interest to help them. [2] If the surrounding communities get affected by El Niño, they will ask the mining companies for help since government tends to be ineffective in remote areas. Mining companies should start working more with the communities in addressing climate change issues affecting not only their operations but the communities.

[1] http://semanaeconomica.com/article/sectores-y-empresas/mineria/169916-como-se-preparan-las-empresas-mineras-para-enfrentar-el-fenomeno-el-nino/
[2] http://www.portalminero.com/pages/viewpage.action?pageId=101646810