November 2015

Cash is king but jewellery looks nicer…

Published on: 10 Nov 2015

Before cash came along, people used to barter. Somebody who had grown vegetables would exchange potatoes they’d grown with a baker who’d baked bread. A farmer would exchange a cow with someone who had grown rice. And so on…

This was all very well if you had lots of vegetables or lots of cows but exchanging 1,000 kg of potatoes for the latest Xbox or taking a cow with you to pay for cinema tickets was never going to work.

As a result, along came cash.

The Lydians (now part of Turkey) are widely believed to be the first Western culture to make coins and their first coins came in to existence way back around the time of 700 BC.

Since then things have developed.

Bills of Exchange were introduced in Italy in the 12th century (Bills of Exchange are paper documents which enable traders to buy and sell goods without having to carry cash).

The Bank of England introduced printed cheques in 1717.

The first credit card in the UK was issued in 1966.

Online banking was launched in the late 1990s.

Through all of this cash has remained and there are now 180 currencies recognised as legal tender by the United Nations member states.

Things are changing though and earlier this year Apple and Samsung both launched their contactless payment systems whereby money is loaded onto an app on your phone and payment can be made by scanning your Apple or Samsung phone at a contactless terminal.

The company Ringly are taking things a step further though and have announced a partnership with MasterCard which will enable you to pay for items with the tap of a ring.

The rings that Ringly sell (including the ring shown in the photo above) cost between $195 and $260 and use technology to link the ring to your phone to access the Ringly app. The app will then enable payment to be made. This is pretty impressive given that all the technology has to be fitted onto the surface of the ring.

The end result is that you will be able to purchase items via a contactless terminal by simply tapping your ring without getting your wallet or purse out.

What do you think?

Is this a genuinely useful idea or just a “gimmick”? After all, you’ll still need your phone with you to make a payment.

Either way, it’s a nice excuse if you were thinking of buying a new ring.

Oh, and if you are going to buy one, don’t forget to take your wallet or purse with you…

Would you do this with your job?

Published on: 06 Nov 2015

If a company outsources jobs, in some situations it can be seen as good business practice but if an individual outsources his own job then what is that seen as?

Outsourcing is where a company gets another organisation to undertake a job or business function that would have previously been completed in-house. This is often done for cost saving reasons and an illustration of outsourcing would for example be getting another organisation to maintain your payroll.

I’ve never heard of an individual outsourcing his own job though but that has just changed.

Verison is one of the leading telecoms companies in the US and their security team provided details of a case study where an employee by the name of “Bob” who was a top developer had actually outsourced his own job to China without his employers knowing about it.

In other words, he had received his salary from his employers but had personally paid for somebody else to do his job at a cheaper rate without his employer knowing about it!

He was paid in excess of USD 100,000 for his job and yet he was paying a Chinese consulting firm less than 20% of that to do the job for him.

According to Verison a typical day for Bob was:

9:00 a.m. – Arrive and surf Reddit for a couple of hours. Watch cat videos (!!)
11:30 a.m. – Take lunch
1:00 p.m. – Ebay time.
2:00 – ish p.m Facebook updates – LinkedIn
4:30 p.m. – End of day update e-mail to management.
5:00 p.m. – Go home

Despite not actually doing any of the work himself his performance reviews were excellent and he had been regarded as the best developer in the building.

So, in summary – he was paid a pretty good salary and all he did was play around on the internet.

All his real work was outsourced by him to a Chinese company. He paid them whilst his employer paid him 5 times the amount that he had paid the Chinese company.

Bob has now lost his job but it does raise an interesting debate as when a company outsources it’s seen as a clever move but when an individual outsources their own job they end up losing that job.

Anyway, whilst you’re thinking of that particular point I’d like to mention that the next blog article will be written by a Chinese company but please don’t tell my employer.

Meanwhile I’m off to watch some cat videos…

Adidas and Nike – who’s going to win this one?

Published on: 04 Nov 2015

What type of business would you say Adidas and Nike were in?

Are they sportswear brands, fashion brands or both?

I think it’s fair to say that they segment their markets pretty well and have both sports and fashion markets under control.

Last year Adidas spent more than 13% of their annual sales on marketing (the industry average is 10%) and they have just announced a “new signing” who is going to cost them a significant amount of money.

Kayne West, the world class sportsman renowned rapper will be the face of Adidas’s new Yeezy range of clothing and footwear.

Now, whilst you’re unlikely to see many top sportsmen wearing the Yeezy clothes and shoes whilst playing sport, Adidas are no doubt expecting to sell plenty of the Yeezy branded products to people who will be buying them for their cool factor (I appreciate that the definition of cool is a subjective matter and I’ll leave it up to you to decide whether or not you consider Kayne West to be cool…).

The amount that Mr West will receive has been kept confidential but it’s clearly not going to be an insignificant amount. He previously was an ambassador with Nike where according to sneakernews he was offered $4million per year to stay with them but he turned them down.

So, Adidas are using Kayne West to help promote their products to the “people who like Kayne West segment” but there’s another segment that is seeing some change.

The woman’s sportswear segment has to a certain extent been neglected by Adidas and Nike over recent years. Despite Adidas linking up with Stella McCartney (the famous designer and daughter of the Beatles singer Paul McCartney), competing brands such as Sweaty Betty and lululemon have experienced significant growth following their focus on the higher quality end of the ladies sportswear market.

To try to get a bigger share of the ladies sportswear market and to counter the threat that Sweaty Betty and lululemon are creating, Nike has announced a collaboration with Japanese fashion label Sacai (a brand I’m led to believe enjoys cult like status amongst certain fashion aficionados and as the images above from the Sacai Facebook page show, have very fashionable outfits).

Going back to Adidas and Nike, one thing is for sure and that is that both companies have changed beyond recognition from when they were set up.

In the 1920s in Germany, brothers Adolf and Rudolf Dassler set up a shoe making business but soon fell out with each other and went their separate ways.

Adolf (Adi) Dassler kept the original company but renamed it Adidas (named after his first name and part of his surname) whilst Rudolf left and set up the sportswear brand Puma.

Whilst Adidas and Puma were set up by brothers, Nike has an altogether different background.

Nike, was established in 1962 by Phil Knight, who incidentally was an accounting major, and is one of the best companies in the world in terms of getting its marketing just right.

That leads to my final observation and that is the fact that Nike do tend to get their marketing right. Will it necessarily be a bad thing for them that Kayne West has left them and is now with Adidas?

The ExP Group