Marketplace - American Public Media

Your Wallet: New Year, New Job

Fri, 2014-12-26 10:34

At the beginning of the new year we tend to reflect on our career. Are you planning to jump start your job search?

We want to hear your story. How do you plan to stand out to potential employers in 2015?

Send us an email, or reach us on Twitter, @MarketplaceWKND

 

The science and art of stocking holiday shelves

Fri, 2014-12-26 10:07

Just a few days before Christmas, the once fresh-looking holiday aisles at a Target store in Portland, Oregon, were already picked over, complete with clearance signs.

So how did Target decide on these exact toys and holiday decorations? Not to mention how many of them the store should carry?

“It is to a large extent a science combined with an art," says Akshay Rao, a marketing professor at the University of Minnesota. Every year, retailers face this classic problem where they try to determine how much to order without fully knowing the demand, he says.

“You look at historical data, you look at trends, you look at stated preference in the marketplace through some sort of market research, and you come up with an estimate of what’s going to be hot,” he says.

For many retailers, Rao says, that’s just the first step.

“The other side of that equation is attempting to influence that demand," he says.

Retailers use tools like social media to steer customers toward certain products. They also use discounts or emphasize features, like a phone with a fancy new camera, to entice customers to buy, he says.

At the end of the day there’s still plenty of guesswork involved.

“And people who guess right are considered geniuses and are often lucky, and people who guess wrong are left holding a fair amount of inventory that then goes on sale the day after Christmas," Rao says.

But stores have a new challenge, says David Raffo, a business professor at Portland State University. Consumers are waiting longer to make decisions about what to purchase. And that’s making it harder to predict holiday sales.

“The way it use to be is that people would get signals, like Black Friday, what’s hot, what’s not, and then they’d try and get it on their shelves, more of it or whatever, as fast as possible," he says. "What are the sizes? What are the colors? What are the toys that people are wanting?”

But it’s better for retailers to have too much inventory than not enough, Raffo says.

“The cost of not having the product is lost sales," he says. "It’s not just the sale of that product, but if a retailer doesn’t have what you want, you may go to another store and do all your other shopping at that other store.”

And besides, without that extra stuff, how else would retailers be able to offer those great after-Christmas deals?

The science and art of stocking holiday shelves

Fri, 2014-12-26 10:07

Just a few days before Christmas, the once fresh-looking holiday aisles at a Target store in Portland, Oregon, were already picked over, complete with clearance signs.

So how did Target decide on these exact toys and holiday decorations? Not to mention how many of them the store should carry?

“It is to a large extent a science combined with an art," says Akshay Rao, a marketing professor at the University of Minnesota. Every year, retailers face this classic problem where they try to determine how much to order without fully knowing the demand, he says.

“You look at historical data, you look at trends, you look at stated preference in the marketplace through some sort of market research, and you come up with an estimate of what’s going to be hot,” he says.

For many retailers, Rao says, that’s just the first step.

“The other side of that equation is attempting to influence that demand," he says.

Retailers use tools like social media to steer customers toward certain products. They also use discounts or emphasize features, like a phone with a fancy new camera, to entice customers to buy, he says.

At the end of the day there’s still plenty of guesswork involved.

“And people who guess right are considered geniuses and are often lucky, and people who guess wrong are left holding a fair amount of inventory that then goes on sale the day after Christmas," Rao says.

But stores have a new challenge, says David Raffo, a business professor at Portland State University. Consumers are waiting longer to make decisions about what to purchase. And that’s making it harder to predict holiday sales.

“The way it use to be is that people would get signals, like Black Friday, what’s hot, what’s not, and then they’d try and get it on their shelves, more of it or whatever, as fast as possible," he says. "What are the sizes? What are the colors? What are the toys that people are wanting?”

But it’s better for retailers to have too much inventory than not enough, Raffo says.

“The cost of not having the product is lost sales," he says. "It’s not just the sale of that product, but if a retailer doesn’t have what you want, you may go to another store and do all your other shopping at that other store.”

And besides, without that extra stuff, how else would retailers be able to offer those great after-Christmas deals?

With 'Into the Woods,' Disney goes dark

Fri, 2014-12-26 10:01

Among the many holiday movies currently in theaters is an adaptation of the Broadway musical "Into the Woods." It’s about infidelity, sexual awakening, death and untidy endings — and now it’s a Disney movie.

Fans of the original Stephen Sondheim fairy tale mash-up worried that the Disney treatment would water down many of the dark themes that made it a departure from the typical blockbuster fairy tale. But the success of films like "The Hunger Games" has pushed studios to develop movies with more adult themes.

And so far, the move has paid off for Disney. According to early estimates, the film has brought in over $13 million since being released on Christmas Day.

New market for hack-attack insurance takes root

Fri, 2014-12-26 10:00

For the second day, the digital Grinch has stolen Christmas for gamers around the globe. Networks went dark for Microsoft's Xbox and Sony Playstation users, with a group of hackers calling themselves Lizard Squad taking responsibility.

It’s unclear if Sony or Microsoft had hacker insurance; we tried to reach them. But we do know breaches of web-based game systems come at great economic damage. And as it turns out, there is a growing world of insurance to provide protection against cyber attacks.

“The policies will typically cover the cost of notifying the affected persons, the customers, that there was a breach,” says Richard Betterley of Betterley Risk Consultants. "The cost of providing credit monitoring, legal counsel related to the breach and sometimes crisis management ... public relations campaigns, in other words.”

Like traditional insurance, if something goes wrong, the policyholder files a claim and hopes for a check.

Plenty of costs aren’t covered, like stolen ideas, stock losses and customer credit card losses. But with Xbox and Playstation joining a hacked wall of shame alongside Home Depot, JP Morgan and Target, more firms are buying peace of mind — and insurance firms are racing to provide it.

“Lots of organizations were just dabbling in this area of insurance a couple years ago,” says Larry Poneman of Poneman Institute R. “But with all of these data breaches, more and more insurance companies see huge amounts of profits to be made.”

Insurers face their own danger, though. They can’t predict hacking losses the way they can losses from tornadoes or fires.

“They are very much aware of their lack of actuarial data that underline how these policies are underwritten,” says Ted Julian of data protection firm CO3 Systems. “They could lose quite a bit of money quickly, if they’re not careful.”

Rebounding economy could mean more pay raises

Fri, 2014-12-26 09:59

For years, Americans expected an annual raise of anywhere from 2.5 to 3 percent. The recession brought that number down to 0.2 percent by June 2009, and inflation wiped out most wage gains that have occurred since. But recently, people have become more optimistic.

In December, Americans said they expect a raise of about 1.7 percent – a smidge above inflation, which seems to be running at around 1.3 percent.  

Will we actually get that raise? Hard to say.  

In December, average hourly wages jumped a fraction, around 0.4%. A promising figure, but one month of data does not make a trend. Twenty states and the District of Columbia have all raised the minimum wage, which will boost incomes at the bottom end of the spectrum.  

For the rest of wage earners, it's a question of how much slack there is in the labor market and the economy. If the unemployment rate continues to fall, workers may have the confidence to push for pay increases without having to worry about the line of people outside willing to work for less.

 

What health care in 2015 will look like

Fri, 2014-12-26 09:49

Marketplace’s Adriene Hill and Dan Gorenstein discuss how healthcare may change in 2015.

Hospital consolidations can mean a few things. On one hand, there will be potential for better convenience. Integrated medical records means you won’t have to fill out the same forms multiple times or take the same tests twice. Tom Main, a partner with Oliver Wyman's Health and Life Sciences Practice, says “I think we’re sitting at this incredible opportunity for the more connected, way more accessible, way more personalized, way more real time.”

However, if there’s been a merger in your area, it's easy to get lost in the system and you can expect higher prices. Since 1994, there have been 1,200 hospital mergers, and in certain markets, there have been 20 to 50% price increases. Carnegie Mellon economist Martin Gaynor says, “Actually those increases just get passed on to workers dollar for dollar so it actually comes home to roost directly on the backs of American workers.”

Gorenstein explains why some hospitals want to be bigger: "More and more hospitals and doctors are getting paid differently – they’re penalized for things like readmission, their requirements to have electronic health records. That stuff is expensive. Doing this stuff is new and it’s different. People are a little lost and that leaves people feeling anxious a bit, nervous a bit. Some people really believe the best way to weather this new era in healthcare is to be bigger. Bigger is better. They’ll have more money on hand and they’ll be able to do whatever they need to do to move. Others though, especially when it comes to the hospital mergers, believe the bigger they are, the more leverage they’ll have when negotiating with health insurers."

Branding marijuana for a changing market

Fri, 2014-12-26 09:15

The market for marijuana is changing, at least in the states where the drug has been legalized. In Colorado and Washington, where recreational marijuana is legal for adults, cannabis sellers are finding new approaches to the way they sell their products. The new business plan, for many, includes advertising and marketing -- a shifting image.

That's where Cannabrand comes in. Olivia Mannix, on of the founders of the marketing company, says that Cannabrand focuses on marketing cannabis products in legal markets. That includes working with a variety of companies, not just dispensaries.

"We take on clients ranging from the tech space to dispensaries, to grow operations," Mannix says. Cannabrand works on branding for these companies, and aims to make the retail experience in the marijuana industry more accessible. 

That include everything from edible taste testing, to logos, packaging, and advertising. 

But advertising and selling a product that's largely classified as an illegal drug can be trick. Brands bump into problems with trademarking -- which is not a state issue, but a Federal one. "Trademarks are a problem," Mannix says, "if the name has to do with marijuana/cannabis, it's going to be difficult to have your trademark go through on a Federal level."

Mannix says that the biggest logistical problem for marijuana companies and advertisers is banking. Most banks won't finance companies associated with the drug. "You're not supposed to use credit cards," she says, "and a lot of these companies have bigger holding companies that aren't associated with cannabis so that they can open a bank account."

This workaround can help companies deal with credit, but when banks discover the association, the accounts can be closed, meaning that many marijuana companies deal almost exclusively with cash. 

"There are some new banks coming up that are actually FDIC insured for the marijuana industry," Mannix says. She hopes that banking restrictions will ease for her clients, but for now, but of the industry is cash-only -- a model that remains a roadblock to legitimacy. 

Mannix's other key role is working on destigmatizing marijuana. She uses the words cannabis and marijuana instead of weed, pot, or grass. She says a lot of the stigma associated with marijuana has to do with old propaganda. Cannabrand touts potential health and social benefits associated with cannabis products -- it's intended to make the plant more accessible to a broader audience, but many people still balk at the idea of recreational marijuana, and advertising related to marijuana. 

"It might sound insane, but this is an industry, this is a marketplace, and every industry needs to have some type of branding and marketing and advertising associated with it," Mannix says,  "yes, one might think that marijuana sells itself and it doesn't need to be marketed, but now that this is a legal industry it's a competitive marketplace, and companies need to differentiate themselves."

Cannabrand works with about six clients in any given month, and Mannix says they market to a wide range of demographics, including younger people, older people, and an upscale professional market.

Cannabrand stays informed about laws and regulations and works on education when it comes to consumption. Mannix says that one of the biggest gaps in the industry is education about recreation use, including things like where to consume, and how much.

"That's something that we're really trying to promote," Mannix says. When it comes to consuming marijuana she says "it's very important to start low and take it slow."

Changes to the physical spaces where marijuana products are sold are helping with stigma and image, Mannix says. "There actually are a lot of beautiful dispensaries in the Denver and Colorado area that have really been able to change their interior design.  Some of them look like Mac stores, some of them just have beautiful woodwork, and a lot of the other dispensaries are evolving their brands and making their space more comfortable for their target market."

Mannix says she hopes the marijuana industry will become more like the liquor industry, where it's easier to advertise and reach a wider audience. Her hopes for the future of marijuana marketing? "I'd really like to see there be more leniency so that marketers and advertisers can do their job for the cannabis industry."

 

 

How to buy the things money can't buy

Fri, 2014-12-26 09:02

The Beatles were wrong. You CAN buy love! Satirists Sam Weiner and Daniel Kibblesmith tell us how to buy all the things you thought had to be earned. They are the authors of the book "How to Win At Everything."

Some people think money can’t buy love, happiness, or a life free of regret – but they are dead wrong. Even priceless things have a price. Here's how to buy the things that money supposedly can't buy. 

Respect

How can you buy respect? Don't waste long hours volunteering in your community and keeping promises to friends. You can buy respect by showing up everywhere wearing a solid gold suit of armor.

Friendship

What about friendship? Ensure your popularity by stocking your home with one of every video game console, one of every type of dog and replacing all your carpeting with those giant floor pianos from the movie "Big."

The dogs will go nuts for it!

Love

You can even buy love, for what is love, but a series of electrical reactions in the brain? 

Pay a bunch of neuroscientists to develop an electrified baton that you can use to thwack people into falling in love with you.

Trust

Then there’s trust: Trust is often given freely – but that's missing a huge business opportunity! You can charge friends a dollar apiece not to divulge their most intimate secrets.

Cha-ching! 

World Peace

Finally, there is one thing money truly cannot buy: world peace – unless of course you have a lot of money. With sufficient resources, you can finance a utopia of mandatory smiling classes, mood-repressing drinking water, and an army of jackbooted helpers to keep your populace from expressing even a hint of discontent. It’s economics 101.

Everything Else

The next time someone tells you there are things money can't buy — remember, a $1,000 pair of noise-canceling headphones will shut that nonsense out of your head forever.

 

 

Sony and Microsoft fight ... the Lizard Squad

Fri, 2014-12-26 07:35

Starting on Christmas Eve, Microsoft's Xbox Live and Sony's PlayStation Network suffered outages that lasted through Christmas Day and beyond. By the morning of the 26th, XBox was said to be back online, but judging by the continued grumpiness on Twitter, PlayStation Network was still not working.

A group called Lizard Squad posted messages on Twitter, taking responsibility.

Lizard Squad, a group of so-called "black hat" hackers, has a history of attacking gaming networks. In those earlier attacks, Lizard Squad used what’s called D-Dos or Distributed Denial of Service attacks, in which hackers send a bunch of essentially fake online traffic to a website or a service and bring it down by overwhelming the system.

No one is saying that these hacks are related to the earlier attacks on Sony Pictures that President Obama has blamed on North Korea. But it does come at an inopportune moment for the company.

Of the many tweets on the subject, perhaps the most amusing come from someone with a fake Kim Jong-Un account. Starts by quoting a headline from the tech blog Gizmodo: “Xbox Live and PSN are still messed up” and ends: “It wasn’t me, PEACE”

 

PODCAST: How the hacker stole Christmas

Fri, 2014-12-26 06:43

Christmas is always a busy day for Microsoft XBox and Sony Playstation's servers, as people unwrap their new game consoles and try to log on. But in what may be the Grinch move of the season, hackers claim to have orchestrated a digital attack that's been slowing or halting those gaming networks since yesterday. 

Want to not make friends or influence people in a bar? Try going on about trade policy. But NAFTA and other trade agreements may have altered the texture of American business and the job market more than any other set of policies. And there are new trade agreements in the works that could play prominently in our coverage in 2015.  

And, some airlines these days are now trying to make life in coach a bit less contemptuous, with fluffier head-rests and bigger video screens. But as Sam Hartnett reports this is happening even as some of the seats are getting smaller.

PODCAST: How the hacker stole Christmas

Fri, 2014-12-26 06:43

 

Christmas is always a busy day for Microsoft XBox and Sony Playstation's servers, as people unwrap their new game consoles and try to log on. But in what may be the Grinch move of the season, hackers claim to have orchestrated a digital attack that's been slowing or halting those gaming networks since yesterday. 

Want to not make friends or influence people in a bar? Try going on about trade policy. But NAFTA and other trade agreements may have altered the texture of American business and the job market more than any other set of policies. And there are new trade agreements in the works that could play prominently in our coverage in 2015.  

And, some airlines these days are now trying to make life in coach a bit less contemptuous, with fluffier head-rests and bigger video screens. But as Sam Hartnett reports this is happening even as some of the seats are getting smaller.

Wal-Mart aims to make a buck from your gift card

Fri, 2014-12-26 05:29

If you received a gift card for Christmas, Wal-Mart wants to make you an offer: Trade it in for a Wal-Mart gift card... for less than face value. An estimated billion dollars worth of gift cards may go unused this year, and Wal-Mart hopes to take a chunk of that business. 

The retail giant is partnering with an outfit called cardcash.com, which is already in the business of trading in slightly-used gift cards— offering a check, or PayPal, or an Amazon gift card. Here are some examples:

Some sample offers from cardcash.com, as found on the morning of Dec. 26 2014.

Dan Weissmann/screenshot from cardcash.com

Card Cash then turns around and offers the cards for sale through its site— at higher prices than it pays. Target cards sell for face value, for instance. Home Depot cards go for 6 percent off. Starbucks cards go for 12.5 percent off.

Wal-Mart, in this partnership, offers slightly better terms for its cards. Here are some offers retrieved from the partnership site:

Some offers from the Wal-Mart side of cardcash.com, as found the morning of December 26, 2014.

Dan Weissmann/screenshot from walmart.cardcash.com

 

Sucharita Mulpuru,  a retail analyst with Forrester Research, says gift cards are such a big business, it was just a matter of time before Wal-Mart got into secondary markets like this. 

However, she is surprised that Wal-Mart is partnering with a company that does so much business with arch-rival Amazon. "If I were in a partnership with any company, I probably would not want them to have significant relations with my biggest competitor," she says. 

 

Coke to make cuts amid sales slump

Fri, 2014-12-26 02:04

The Wall Street Journal reports that Coca Cola has plans to lay off as many as 2,000 employees in the next few weeks. Coke announced in October that it is seeking to cut costs amid falling profits. The company is slashing budgets: asking executives to take taxis instead of limousines, and reportedly canceling a Christmas party for Wall Street analysts.

The belt-tightening comes as America's love affair with soda pop has chilled in recent years. U.S. consumers are increasingly turning to healthier, cheaper beverages to quench their thirst, including water. Coke owns the water brand, Dasani, and recently started selling milk, in an attempt to keep pace with changing tastes. 

Airlines use illusion to make coach seem more spacious

Fri, 2014-12-26 02:03

Like most of us, you have probably flown coach recently. Did it seem spacious to you? Probably not. Airlines are hoping to change that—not with bigger seats, but by creating the impression of more room with larger video screens and new headrests.

Joe Brancatelli runs JoeSentMe, a website for business travelers. He says the illusion is just that: an illusion. Coach seats have gotten smaller he says and they continue to get smaller.

The whole shrinking airplane seat situation makes Joe Brancatelli thinks of a Marx Brothers' joke. It's the one where Groucho calls up room service and asks them to send up more room. Instead, they send up more people to his tiny space.

Brancatelli says airplane perks like larger video screens are distractions from slimmer seats which are now seven inches less than an average desk chair. Meanwhile, he says first class keeps getting nicer.

The difference in comfort between first class and coach is growing Brancatelli says. “It really is a yawning gap culturally,” he says, “and people are beginning to seize on this and say it's like what is going on in society.”

Chris Lopinto has noticed the increasing difference between the two airplane classes. Lopinto is co-founder of ExpertFlyer.com. He points to how American Airlines is concentrating more on first class as it upgrades its fleet. Lopinto says, “That's the way it is because that's where a lot of the revenue comes from.”

Lopinto says in American Airlines' new planes, economy fliers will get some upgrades like more personal video screens, power outlets, and pay-as-you-go wifi.

 As for the seats, he says if anything they are going to get a tad smaller.

Blackberry plans self-destructing phone

Fri, 2014-12-26 02:03

The Canadian smartphone company Blackberry has partnered with Boeing to make a phone that can self-destruct if it gets into the wrong hands.

The phone is designed for people in the defense and security industries. Blackberry is hoping this emphasis on security will tap into a growth market and turn the company around. Aptly named the “Boeing Black,” any attempt to crack it open triggers a Mission Impossible-style deletion of data and renders the phone inoperable.

Apple and Samsung may rule the consumer-side of smartphones for some time, “…but on the business-side and the government-side, Blackberry is gold,” notes Jeff Kagan, a tech industry analyst based in Atlanta. He says smartphone security is growth industry, and it won’t be just the Boeings of the world, who want these added protections. 

In need of a white Christmas? Head to Hawaii

Thu, 2014-12-25 12:58

The White Christmas that Irving Berlin dreamt about was uncommon this year around the country...

But one place that did get a little snow? Hawaii.

Two mountains on the Big Island had a rare blizzard. The snow is only expected to last a day or two, but if you're desperate to see the white stuff, you could fly today ... from Los Angeles, California, for about $700.

 

You can copyright music, so why not a food recipe?

Thu, 2014-12-25 11:29

Entrepreneurs and business owners constantly face intense competition in attracting new customers and retaining old ones. They must stand out and be original. Which is why people register their original creations with the United States Copyright Office, to legally protect the logo, design, literary work, architecture, etc., that they have spent so much time and money on.  

But would you be able to do the same thing for, say, your homemade sugar cookies? Or any other food recipe for that matter?

Unfortunately, nope. Anyone can pass off your grandmother's recipe that's been passed through generations. "You can't copyright the ingredients or steps necessary to make the cookie," says Jane Ginsburg, professor at Columbia Law School.

Sean Parker donates $24 million for allergy research

Thu, 2014-12-25 07:57

Sean Parker, the tech entrepreneur who founded Napster and the first president of Facebook, donated $24 million to Stanford University to create a center for allergy research.

Parker suffered from severe food allergies all his life, and with his gift, joins a long line of philanthropists who have given large donations to cure or alleviate diseases that affect them personally.

Parker and other young tech entrepreneurs differ slightly from their predecessors in that they're likely to donate large sums directly to an academic or medical institution rather than starting a foundation of their own. 

Retailers hope for one last Christmas shopping push

Thu, 2014-12-25 07:53

Just like past years, stores will open early on December 26 to try to draw shoppers in with deep discounts. It’s a way for retailers to get one last revenue push before the new year, and to clear inventory that didn’t sell before Christmas. 

This year, the calendar is more favorable than usual for retailers because of the three-day weekend. Many workers will take off Friday — and hopefully shop. “Giving people more time to shop, giving them a little bit more room, and giving them a little bit more money in their pocket thanks to lower gas prices, could make a difference for retailers,” says Claes Bell, an analyst at Bankrate.com.

Economist Chris Christopher at IHS says consumers are heading into 2015 more optimistic about job prospects and personal finances than in previous years. He predicts retail sales for the 2014 holiday season will rise more than 4 percent, compared to the 3.1 percent increases in 2012 and 2013.

At a Christmas Eve open-air craft market called "Festival of the Last-Minute" in Portland, Oregon, shoppers were mixed on whether they wanted to go back out for more shopping on the post-Christmas weekend. “I have in the past, but I probably won’t now, I probably won’t brave the crowds,” says Britt Fredrickson, who has two young children. “I just don’t need any more stuff right now.”

But Jessica Martin-Weber, who has six daughters, said she’s looking forward to getting out. “My husband and I typically get the day after Christmas or the day after that, where we go catch a movie and we do some shopping.”

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