Sears Is Losing Its Dominance Over American Retail. Does It Have a Hope of Regaining It?
Sears used to rule American retail. But the troubled retailer's sales are continuing to decline, falling nearly 14 percent in the most recent quarter. Shares at Sears Holding Corp. are at a multiyear low, and the brand is continuing to close stores.
The most troubling sign of all? Sears isn't trying to get better, Steven Azarbad, chief investment officer at Maglan Capital and an expert in distressed retail companies, told Business Insider.
"How many more quarters of negative sales can you handle as a business without being forced to close?" Azarbad said. "They're not pumping cash into turning this into a real retailer or business, and merchandise looks sparse for the most part."
The company, which also includes Kmart stores, has lost more than $6 billion since 2012. "It's hard to come up with a reason why Sears and Kmart need to exist in today's environment," Azarbad said. "It's hard to imagine them ever being a destination retailer."
The collapse of Sears and Kmart is "inevitable" and could happen by the year 2016, retail analyst and author Robin Lewis writes on his blog. "These two retail brands are dead men walking," Lewis writes. Lewis believes Sears Holdings' inevitable decline started decades ago.
He says executives spent too much time investing in side businesses and ignored the competition. "This did not have to be fatal; however, it actually starved those resources (capital and management) from the retail business, leaving it unable to respond and adapt to the needs of the evolving consumer and marketplace," Lewis writes.
To offset losses in the retail department, the company is planning to build up its e-commerce and make the most of its extensive real-estate properties. The company raised $3 billion this year by spinning off some of its real-estate properties.
But Azarbad said the company would most likely burn through the cash quickly. "The lack of investments into the business is troubling for the future," he said. We've reached out to Sears for comment and will update if we hear back.
Abercrombie’s Trying to Ditch Its Preppy Image. That May Not Fix Its Problems.
Being nice isn't always a good thing. As teen customers continue to flee the brand, Abercrombie has taken several steps to change its image and tone down its sexy advertisements. The company has been criticized in the past for its promiscuous ads and excluding customers who weren't toned and preppy. Former CEO Mike Jeffries gained widespread attention when he said he only wanted the "cool kids" to shop at Abercrombie. Since then, the company has made strides by advocating anti-bullying campaigns and offering larger sizes.
But Abercrombie's all-important teen customers may be bored by the brand as a result, and according to one brand expert the company's attempts to become nicer may be more detrimental than beneficial.
"Abercrombie has removed their brand differentiation from what it used to be, and by trying to be nice—or maybe, more kosher—[concerned with the] sensitivity of the Americans," Erich Joachimsthaler, CEO and founder of Vivaldi Partners, told Business Insider. "I think that has made Abercrombie bland."
Not everyone liked Abercrombie, but one thing was certain about the brand: It had a target customer. "Abercrombie & Fitch had built on [a] particular customer, a particular consumer ... they didn't like anybody ... [former CEO Mike Jeffries] said he [didn't] want to market to everyone," he said. "So I think that's very important—if you don't stand for something, you fall for anything. And what you see right now ... Abercrombie, what they've done, is they're in eternal drift mode."
Abercrombie's lack of a brand identity is evident on its website, too, with dresses that resemble those from its fast-fashion competitors, components of athleisure, and its namesake shirts with the company name emblazoned across the chest. This alleged lack of brand identity could confuse customers, Joachimsthaler said.
So while the brand may no longer be offending people as frequently as it used to, it's not doing anything at all—which might be worse, as Joachimsthaler hugely advocates brand differentiation. "If you think about it, everything that made them different, they have removed," he said. "But they haven't replaced it with anything.”
Housing in San Francisco Is So Expensive, This Guy Is Now Renting Out Shipping Containers
It’s no secret that San Francisco housing prices have shot through the roof. A home with a mummified corpse in it sold for over a million dollars. And real-estate marketplace Zumper rates San Francisco as officially the most expensive rental market in the country. Last month, there was even a listing for a tent going for $899 (or $46 per day) per month in Silicon Valley.
But this might be the surest sign of all that the Bay Area housing market has gone completely haywire: a Wharton grad is trying to get people to live (illegally) in converted shipping containers. Luke Iseman, 31, leases a 17,000-square-foot warehouse in Oakland in which he has built 11 micro residences out of cargo containers, Bloomberg reports. He charges $1,000 per months for each of the makeshift homes, which aren’t legal, strictly speaking. Iseman and his “cargotopia” (as he calls it) have been chased from two other locations by the authorities. But that hasn’t dampened his spirit.
“It’s not making us much money yet, but it allows us to live in the Bay Area, which is a feat,” Iseman told Bloomberg. “We have an opportunity here to create a new model for urban development that’s more sustainable, more affordable and more enjoyable.” On Iseman’s website, he lays out the cargotopia manifesto: “We're living in a solar-powered, sustainable home we built for less than the cost of a car. Chickens in the yard, fast internet, occasionally-alive gardens, and providing affordable homes for our friends: it's getting harder and harder to consider our sustainability a sacrifice.”
Compared to paying $4,200 a month in San Francisco for a lousy two-bedroom apartment, which Iseman told Bloomberg used to be his abode, cargotopia does sound like a certain type of dream. And who are the tenants that share in this dream? According to Bloomberg, the residents of Iseman’s bohemian village range from a Facebook engineer to a bicycle messenger.
Iseman has plans to monetize his adventure through his website, Boxouse. On Boxouse, he sells fully furnished box houses (for $20,000), DIY kits, and building plans. Now he just needs the box living revolution to catch on. And as to getting approval from the government for cargotopia: “I’d rather ask forgiveness than ask permission,” he told Bloomberg.
Watch a film about the project by Kirsten Dirksen below:
Google Wants to Help You Avoid Annoying Long Lines at Restaurants
Google has added a new tool to its search bar that helps people avoid long lines at stores and restaurants. The feature reveals peak traffic hours for millions of businesses on every day of the week, the company said in a blog post. The tool is accessed by searching for a retailer, and then tapping on its title. A graph appears showing average traffic for every hour of the day.
For example, the feature shows that the Shake Shack location in Madison Square Park—which is one of the busiest locations in New York City—has peak traffic on Wednesdays around 7 p.m., Saturdays around 3 p.m., and Sundays around 2 p.m.
"Do you ever find yourself trying to avoid long lines or wondering when is the best time to go grocery shopping, pick up coffee or hit the gym (hint: avoid Monday after work)?" Google's post reads. "Now, you can avoid the wait and see the busiest times of the week at millions of places and businesses around the world directly from Google Search. For example, just search for "Blue Bottle Williamsburg," tap on the title and see how busy it gets throughout the day."
If widely used, the feature could actually help some retailers by encouraging customers to visit during off-peak hours.
Now You Can Print Photos From a KFC Chicken Bucket
KFC is rolling out a high-tech chicken bucket to celebrate its 60th anniversary in Canada, the Verge reports. The “Memories Bucket” doubles as a Bluetooth photo printer, which connects to your phone wirelessly to print pictures.
KFC’s Facebook account indicates the company will be giving “a few” of these special buckets away, so for now it doesn’t look like they will see a wide release. But from what we can see in their promotional video, if you are one of the lucky golden ticket winners, you’ll have an outstanding time.
It must be said that the “Memories Bucket” isn’t quite as innovative as Pizza Hut’s pizza box that turned into a working projector for your smartphone. While the “Blockbuster Box,” as it was called, took advantage of the concept of a “pizza table” and turned that into a lens, KFC’s bucket is essentially adding a printer to the inside of the bucket.
But with printers gradually going out of fashion in favor of a screens-only life, marketing gimmicks from fast food restaurants might be our only chance to actually print out photos.
See the video below:
New Design Patent May Ensure Apple's Earbuds Stop Falling Out of Your Ears
Apple patented a design for earbuds that don't fall out of your ears if you try to do some exercise last year. The patent describes an earpiece with a bendy outer section that forms to fit the user's ear.
This wasn't particularly revolutionary when it comes to earbud design in general, but it is a step away from the hard earpieces Apple gives you when you buy its products. They have a tendency to bounce out of your ear if you do anything more strenuous than walking or sitting down, and they can get really uncomfortable after a while.
While we can't say for certain whether the patent relates to this exact model, Apple has been selling versions like this for a while now.
The pliant outer section attaches to the top of the hard earpiece housing:
Then folds back over to cover it:
Here's how that would look on the inside, with uncomfortable bits of plastic nicely covered:
The patent pointed out that these earbuds could connect to a device wirelessly or with a cable.
Twitter Is Taking Down Tweets That Steal Other People’s Jokes
Twitter has started taking down tweets that copy the same joke that somebody else has already shared, the Verge reports. Olga Lexell, a freelance writer from Los Angeles, spotted that one of her Twitter jokes was being reposted by other accounts without her permission. They didn't retweet her; instead they just copied and pasted her joke. Lexell decided to ask Twitter to take down the tweets, as they were her intellectual property.
Sure enough, Twitter responded by deleting the jokes.
BREAKING NEWS: Twitter is hiding tweets reported stolen. And it's referring to the author as a "copyright holder" pic.twitter.com/DkteWMZ7zg— Plagiarism Is Bad (@PlagiarismBad) July 25, 2015
It's unclear whether Twitter would have deleted the joke tweets if they weren't ripping off a writer who makes a living through the site. But if you want to ask Twitter to take down a tweet that rips off one of your jokes, here's the link to do so.
Here, via the Verge, is what Lexell said about her decision to ask Twitter to take down the tweets:
I simply explained to Twitter that as a freelance writer I make my living writing jokes (and I use some of my tweets to test out jokes in my other writing). I then explained that as such, the jokes are my intellectual property, and that the users in question did not have my permission to repost them without giving me credit.
If the social network does launch a crackdown on copied tweets then that could be bad news for the hundreds of accounts that repost tweets found on other accounts.
GF: I'm sick of you pretending you're a detective. We should split up ME: Good idea. We can cover more ground that way.— Mat (@MatCro) July 26, 2015
GF: I'm sick of you pretending you're a detective. We should split up ME: Good idea. We can cover more ground that way.— neil shmeal (@RoyUpdike) July 27, 2015
GF: I'm sick of you pretending you're a detective. We should split up. ME: Good idea. We can cover more ground that way.— Advocate Who (@AdvocateWho) July 26, 2015
Canada and the U.S. Are Having a Border Dispute Over Lobster
There is still a tiny bit of disputed territory between the U.S. and Canada, and relations on the border are getting frosty.
In the northeastern-most part of the U.S.—on the coast where Maine meets New Brunswick—there are two tiny, uninhabited islands in a political gray area. It isn’t because anyone wants the islands. Instead, they want the lobster surrounding the islands, and it’s disputed which country has the fishing rights.
During normal times, the dispute seems to be little more than an annoyance. But apparently this year, there are real problems because the price of lobster is so high ($5.50 a pound in that area, compared to $4 the previous year), according to Zane Schwartz in Maclean’s.
The conflict bubbles to the surface every few years, when a bellicose lobsterman on one side or the other gets quoted in the press and sets the other side off. But things are different this year. Due to the high price of lobster, new lobstermen have entered the fray, and they are ignoring unwritten rules that have kept the conflict on a low simmer since 1783.
There are fears from the Maine side that this might get violent. “Somebody is going to get killed. We’ve had bad years in the past and got lucky, but this is the worst year I’ve ever seen,” says American John Drouin, chair of the Maine Lobster Zone Council district in charge of the grey zone. Drouin fears things are even more dangerous than they were eight years ago, when Maine lobsterman Patrick Feeney had his thumb ripped off. It got caught as he was trying to free his equipment while jostling with a Canadian for territory.
Meanwhile, both countries assert their legal rights to the islands.
Click here to read the whole story, and see a really fabulous photo of a puffin.
Google Wants to Lure Businesses Away From Amazon With Free Cloud Storage
What would you do with 100 petabytes of free cloud storage? Google is hoping to find out as it officially launches its Cloud Storage Nearline service and tries to get a leg up on rival Amazon. The service, which has been in beta since early March, provides businesses with a cheap and easy way to store files and documents that a user doesn't need instantly.
Today, Google's Nearline is available to the world. And to entice people to switch away from the cloud storage competition—namely, Amazon Web Services, the unstoppable $6 billion juggernaut of the market—Google is offering 100 petabytes (100 million gigabytes) of free storage to anybody who comes aboard.
Normally, Google prices the data stored on Nearline at 1 cent per gigabyte per month. This works out to Google extending a service credit of $1 million per month to any customer who switches. For a big company, they'll probably blow through that pretty fast. For a startup or smaller company with less intensive data needs, it could last a while.
The deal isn't explicitly aimed at Amazon Web Services, and you'll get the credit if you switch from any other cloud provider or storage software vendor. But Google rolled out a calculator to go alongside this announcement to specifically show how much customers can save with Google Cloud Storage Nearline versus Amazon Web Services, so the intention is clear.
To further the promotion of its cloud storage, Google also rolled out the Google Cloud Transfer service, which makes it easier to move data from other storage providers like, of course, Amazon, into the Google platform.
All of this, including the free credits and the transfer tools, are in the name of getting more and more people to sign up with Google's cloud instead of Amazon's. But it's also furthering the dangerous "race to zero," when cloud storage is so cheap and so plentiful that companies like Google and Amazon won't be able to sell it anymore.
Coca-Cola Wanted to Make More Money by Selling Soda in Smaller Bottles. It Worked.
Over the past few months, Coke has shifted its focus toward selling smaller cans and bottles in the U.S., in the hope that slimming down on portion size will help fatten up its margins. And it's a bet that appears to have paid off.
Coca-Cola said in its second quarter earnings report published Wednesday that it gained non-alcoholic ready-to-drink (NARTD) beverage volume for the 21st consecutive quarter, driven by an increase in both the quantity and quality of marketing investments, and also its "continued rational approach to pricing and disciplined price/pack strategies.” Net operating revenue in North America grew 3 percent year-on-year to $5.9 billion in the three months to July 3. Profit grew 7 percent to $887 million.
On the earnings call, Coke gave more detail: Smaller packages are growing much faster than larger packages, and smaller packs have a higher price per gallon/liter/case. Coca-Cola chairman and chief executive officer Muhtar Kent explained on the Q2 earnings call that Coca-Cola's marketing model is about "more people enjoying more Coke, more often, for a little more money." Smaller packages are helping drive up overall transaction growth, he added.
"Moms in particular like small packs and are returning to the category to use small packs as a way to give treats to teenagers and others in the household. It's particularly positive that moms can do this without the packaging being too big. For many years we marketed packs that were too big, or were over-consumed. And that's one of the reasons why we are over-accelerating," Kent said on the call.
Strategies have included more aggressively marketing 7.5-ounce mini-cans and smaller 8-ounce glass bottles on supermarket shelves. Coke also recently said it distributed a million mini cans as part of its "Share a Coke" summer marketing push that saw it print popular names on-pack.
Last November, Coke's North American president Sandy Douglas said the trend towards health and wellness had set up a "tremendous opportunity for the Coca-Cola brand with our smaller packages,” the AP reported. He explained that a regular 12-ounce can of Coke sold on average for 31 cents. But a 7.5-ounce mini can sells for 50 cents—or, in other words, 2.6 cents-per-ounce for a regular can, or 5.3 cents-per-ounce for the mini can.