The Invisible Cost Of Convenience

Here’s the story: A friend used to buy her arts and crafts supplies at a locally-owned shop until a Walmart sprang up nearby. The prices at Walmart were cheaper, and customers soon deserted the local shop and bought their embroidery thread and acrylic paints at Walmart. Not surprisingly, the local shop went out of business. Then Walmart decided there wasn’t enough profitability in having a crafts department, and closed it down. Now the people in that community have nowhere to go for their arts and crafts supplies.

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Here’s the moral of the story: The price you pay (or end up paying) for all-under-one-roof convenience and low costs is not always obvious. In choosing the big superstore, you sometimes end up with no choice at all. Not only that, but you are taking the business away from someone who might be more passionate about what they sell.

Of course, it’s hard to argue against convenience – particularly when parking is a pain, the winters are harsh, and everyone is in an unholy rush all the time. It’s so much easier to leave your car in the big parking lot and drive one of those big shopping carts around instead – filling it with new underwear, a few frozen pizzas, a birthday card for your aunt, toothpaste, dog food and a coffee table. Done!

Yup. I get it. But is it worth the cost in the long run? Whenever possible, I prefer to give my business (and hard-earned money) to someone who is genuinely passionate about what they sell. This might be less convenient, but it’s so much more satisfying. People who are passionate about what they make and sell – from pies to paint – are invested in having you as a satisfied customer. They care about their product; this generally means that if you need to return something, get something fixed, or even put in a special request, they’re more likely to be helpful. They’re not ALL about the bottom line, and getting customers and goods in and out as quickly as possible.

Another reason to not shop at superstores is that, because they buy in volume, they often end up corrupting the supply chain with exclusive arrangements that make it hard or impossible for their competitors. Like banks, they become so powerful that they are hard to go up against. That’s when local businesses and even consumers lose out. They make or break the rules, and customers have very little say in the matter.

Passion for people and products, not profit

The next time you make your shopping list, take a look at it and determine if there are any items that you could be buying from someone who is passionate about what they make or sell. Get your bread from that baker who started out cooking pies for her family. Buy your dog food from someone who loves animals, and allows your dog in his store when you shop. Pay a little more for your books at that struggling little store on the corner, because the gal behind the counter loves to discuss the latest novels with you. Go the extra block and get your picture frames from the local photographer, who genuinely loves what he does and needs to earn a little income to keep going. You get the picture?

I’m not saying don’t shop at the superstores. I’m saying make an informed choice. After all, you don’t work hard just to throw more money at a corporate CEO who has no idea who you are, and would care less if he did. That’s not meant as criticism, that’s just today’s reality.

Think about it. Passionately. 

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Algorithm? Don’t Mind If I Do.

I don’t know why consumers have such a fascination with Apple products, but the love affair continues. Last week, after waiting all night to buy the new iPhone, an Australian guy dropped it, and this made headlines everywhere. shutterstock_72638878Are the aliens laughing at us yet? They should be.

Elsewhere in the world, religious fundamentalists are lopping off the heads of innocent journalists, the Ebola virus continues its deadly march (2,800 victims), and climate change besieges us with news of flooding, volcano eruptions, earthquakes and hurricanes. BUT, OMG, a man DROPPED HIS PHONE. Just saying!

Yesterday, CBC’s Norah Young explored the world of computer algorithms, in particular about how they affect our social news feeds (i.e., Twitter & Facebook). I think people need to be more aware of these silent automated functions. Did you know, for example, that if you mention a brand in your Facebook post, Facebook will treat it as a sponsored advertisement and use it to get money from the manufacturer? So if you happen to mention that you and your friends enjoyed a Bud Light Beer on the weekend, Facebook “algorithms” will find that mention, put your post top and center for a longer-than-usual time (so that more of your friends will be exposed to it) and will then collect advertising revenue from the makers of Bud Light. Yes! You’ve become an even better marketing “tool” for advertisers. Congratulations. And you don’t even have to know about it, let alone consent to it.

Why not ask Facebook to kick back some of that advertising revenue? There you go. Now everyone will be monetizing their Facebook posts and hoping to make a living off being a boorish “brand bragger.” You’ll earn money every time you mention your iPhone, and guess what? If you drop it, you can get your 15 minutes of instant fame, too. Enjoy it while you can, because the tricks are changing as fast as I can report on them.

I’ve also noticed an increase in “upgrade” requests. I enjoy free music streaming sites, but the annoyance of having my listening pleasure cut into every half hour with a loud announcer telling me to buy the premium version so that I don’t have to listen to him tell me this… well, that gets old really fast. And I refuse to give in to this “little” add-on fee, because I know that it represents a ton of revenue and effectively negates the whole notion of free (which was too good to be true, after all, I guess).

Also, as a result of not being on Facebook any more, I’m now being penalized by not having access to some companies who have chosen to go “Facebook only” with their Internet presence. Websites are dropping in popularity as the herd obsesses over our online social marketing sites, and for many, it’s incredibly cheap and easy to create a Facebook page. Who doesn’t want cheap and easy?

A full page in the New York Times can cost an advertiser close to $100,000. For just one time, to “maybe” reach a reader, in a paper which will be discarded ten minutes later. Advertisers are having a field day on the Internet these days, saving billions of dollars by moving away from print, and coming up with clever, opaque ways to influence our purchase decisions. Unfortunately, they’re not passing on the savings to their customers.

A small group of people are getting very, very wealthy as they exploit our love of connecting, nickel and dime us for small favours, and punish us for straying too far from the hapless herd. Do you need any more proof that we’ve become our own worst enemies?

NOTE: Algorithms, in case you don’t know, are calculations used for data processing and automated reasoning. They are programmed right into a technology. For example, Facebook coders might create an algorithm that will “watch” which ads you click on most, and instruct that your personal feed be “tweaked” to show more feeds from those advertisers. There’s no people behind these operations; it’s all done by a computer. 

So Funny I Forgot To Laugh

It’s interesting that comedians have become our truth-seekers. Following in the footsteps of pioneer Jon Stewart and The Daily Show, associates Stephen Colbert and John Oliver continue the curious crusade – using humour to point out how incredibly sad we are.

In the excerpt below*, John Oliver picks on Dr. Oz and explains the murky reality behind the regulation of dietary supplements and vitamins. It’s worth a watch, just to be reminded of how gullible we are when it comes to highly-visible professionals. The media tags everything – they call this one the “Dr. Oz Effect.” Oprah and her circle of friends (chosen how? Does Oprah have insights that we don’t? What is her talent anyway, beyond being everyone’s best friend?); they all seem to enjoy instant credibility. Oprah’s book recommendations had the power to create overnight bestsellers. Dr. Oz mentions a product and sales shoot through the roof. Dr. Phil has enjoyed similar influence over his mesmerized audiences. Why do we think these people have more knowledge and wisdom than anyone else? Once we like someone, we want to believe everything they tell us. 

I’m glad that we have cynical comedians on board to help balance the pendulum of “celebrity” power. Try thinking for yourself, instead of blindly following the advice of someone just because they’re in front of a camera. Question everything.

*Go to original post if link appears as code instead of embedded video.

 

Exploiting the Ignorant and the Innocent

Advertisers have found another way to hide in plain sight – with clever little documentaries that people share via their favourite social network site. Fooled you again!

The first one I caught was on Netflix, called Inside: McDonald’s. I was seeking more truths about this huge exploitative corporation (which warrants a full chapter in my book), but was subjected instead to a huge pile of steaming propaganda, cleverly disguised as investigative something-or-other. I wouldn’t call it journalism. Shame on Netflix for calling it a documentary.

This morning, my inbox featured a smaller documentary, made by Dole banana-harvesters and distributors. Someone commented, “I’m surprised, after watching this, that bananas aren’t more expensive.” Another person noted “The things you learn on the Internet!” and a third comment implied “I will never take bananas for granted again.”

You know what this tells me?
That Dole was very successful in convincing at least three viewers that their bananas were:
a) Different in some way from other bananas (which grow very nicely in the wild, thank you very much)
b) Worth more than they are currently priced (are you kidding me?)
c) The result of a complex process of quality selection (as opposed to a colossal waste of rejected ones)

Oh, the innocence. Oh, the ignorance. Oh, how advertisers love to do this. And they do it so well, don’t they?

Even monkees know better.

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Ellen Slaps Bic Silly

It’s great when a celebrity like Ellen can use her show to highlight the stupidity of marketers who don’t understand their consumers. Here she takes a hilarious stab at the Bic Pen for Women. What? A pen for women, you say? It’s about time! (Sorry Ellen, I stole your line.)

Even though this clip is two years out, it’s still worth seeing now. Someone actually believed that women would pay double the amount of an ordinary pen for a pink or purple one made “just for women.” Because, if you must know, all other pens are “just for men.” Or at least, that’s what they want you to believe, if only for the briefest of moments while your brain and breasts collide at the cash register. I’m slightly embarrassed on behalf of Bic, who went wildly off track on this one. Do people even use pens any more?

Here’s Ellen’s brilliant put-down, and for even more reality, go see the scathing and equally funny comments that women threw at Amazon, where the Bic Pen for Women is being sold and ridiculed worldwide.

 

A Genuinely Shady Deal

What a great time to be talking about sunglasses. Summer is heating up North America, and people everywhere are pulling out their shades and sunscreen. Are you in the market for a new pair of sunglasses? Here’s something you need to know before you buy…

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All flash, no substance

Sunglasses are a huge industry – about $3 billion in the USA alone. Fashion sunglasses are a relatively new trend, and Hollywood is a co-conspirator, of course. Tom Cruise in Top Gun wore the iconic Ray Ban brand, and demand for fashion sunglasses started rising. So cool. Everyone had to have a pair.

If you forgot about them briefly, that’s because they were pulled off the market for a while by their new owner and distributor Luxottica, the “creepy corporation” behind this week’s post. Luxottica wanted us to forget about how cheaply priced they were, before they put them back on the market under their pricing policy. In fact, it turns out that this company Luxottica (a European entity) has quietly and very deliberately bought up most of the sunglasses market and now owns a whopping 70%. You may not have heard of them, because they stay behind the scenes. However, most popular designer brands (Burberry, Chanel, Prada, Polo Ralph Lauren, Paul Smith, etc.) are designed and manufactured by Luxottica. What? You thought Ralph Lauren designed his own designs? Don’t be silly.

Not only that, but Luxottica now owns the retailers as well as the glasses – Sunglass Hut, Pearle Vision, Lenscrafters and other huge chains are all owned by this monopolistic marketer. CostCo and WalMart remain competitors for now.

So what’s wrong with a market monopoly?

Pricing, that’s what. Luxottica now controls so much that they are officially the industry “price maker.” And they have decided to keep the prices high, at an average $300-400 per pair for something that costs under $2 in raw materials. Nice profit, huh? When asked by journalist Lesley Stahl “why so high?” no logical answer was offered. It’s a bit of plastic, a bit of glass, a bit of wire.

Ultimately, it’s pure opportunism. As long as we’re willing to pay, they’re happy to keep prices high. Salespeople will tell you “Well, that’s just what they cost these days”, and few of us have the resources or time to locate the hard-to-find alternate sources. Even if you do, the competition is happy to price similarly and profit from the price-maker’s policies. Monopolies make it very hard for Smart Shoppers to get true value.

Insurance companies (for people who need prescription sunglasses) often curb high prices in any given market and create a demand for lower-priced options. Luxottica thought of that, too, and has quietly acquired some of the major eye-wear insurance companies, who are, of course, happy to approve any sunglasses within their domain.

Amazing, isn’t it, that this all goes on very quietly and without a peep from the media? Here’s where I applaud CBS’ 60 Minutes for doing a recent episode to spill the beans, which aired June 15, 2014. Go to their website for the full story, and think twice this summer before you fork out hundreds of dollars for glasses that you think are “distinctly different.” Just like my new Prada prescription sunglasses, they are all Luxottica, packaged nicely for your continuing consumer illusion.

Face It. Facebook Is Two-Faced.

How are you liking Facebook these days? If you are one in a billion, you’re there at least once a day to see what friends are up to, and lately you’ve been “liking” the organizations and businesses that you want to follow. Nothing wrong with that, right?

But let’s see what else you’re being exposed to, indirectly. If you look at the Facebook page clip below, you’ll see a handy menu on the left for your favorite apps, friends and interests. On the right, Facebook has added a TRENDING block, where you can get diverted from your inner circle to the wider web of popular news items,  presumably tailored to the interests identified when you filled out that fun little Facebook quiz. Beneath that is the SPONSORED portion Facebook recently added. Advertising direct to you, based again on your data.

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Today, Ad Age announced a deal worth “hundreds of millions of dollars” for advertising agency Publicis, who will be given access to Facebook data so that their clients can post “video ads” (a high-tech name for the lowly television commercial) on your page and on Instagram as well.

Well, I guess people were so happy to have televisions in their homes that they put up with the advertising as a trade-off. That was in the 1950s – and I honestly can’t believe that we’re going through this all over again.

But this is exactly how and why it works. If someone were to point this out and suggest that you get off Facebook immediately, you would say they were being “alarmist” and “ridiculous.” We have grown to love our Facebook fix, and we’ll put up with the crap being piled on, little by little. It’s genius! They get us all in one room, whether it’s virtual or real, and then they have a guaranteed captive audience.

Gotchya. Now… who wants to sign up for that Free Rich Dad Workshop?