Swine Flu & the Economy

This is a 2007 video of the BRILLIANT Laurie Garrett discussing pandemic readiness. Her talk is in relation to the H5N1 virus, but covers the 1918 Swine Flu Outbreak, as well as our current state of preparedness for handling such an event. 

Since Mexico is ground zero for the swine flu virus that has all the world's attention, I have been watching that country's governmental response to the problem. 

Yesterday they decided to suspend all operations of private businesses and forced all travel to ground to a halt. This type of response can be expected to spread as the virus threat-level is raised.

I thought it relevant to post this video here at the Oasis because, around the world,  shopping habits are already beginning to change in the face of this somewhat mild threat.

Mrs. Garrett also spends a portion of her presentation discussing over the counter and prescription products that are associated with controlling flu outbreaks.

Her talk is 14 minutes long, with an additional (and very informative) 6-minute Q&A to follow.

Enjoy:

Confronting My Pessimism

To get a gauge of this "Black Friday" business, I took a stroll around my neighborhood shops to get an idea of consumer enthusiasm. I live in downtown Chicago, so my "neighborhood" shops, along Michigan Avenue, Oak Street and State Street, may differ from yours, but I tried to be as comprehensive as possible.

Please note, Michigan Avenue is universally considered on of the world's top ten shopping addresses, so expectations were higher than normal.

I captured the afternoon on film to share with you and all pictures were taken between 1pm - 230pm, usually the busiest time of day.

Click on pictures to enlarge for better detail:

Pessimism be damned! UGG Australia has a rope line to get in. Average wait: 15 minutes

Optimism squashed, I notice there is not one person in the check out line at Urban Outfitters:

Kate Spade was trumpeting their $50 price point ON OAK STREET!

The undeniable elegance of Trabert & Hoeffer:

Even Luxury houses such as Chanel and St. John were pushing Sale, it's not even December for goodness sake:

Louis Vuitton is always bubbling with enthusiasm:

A While the 6o-foot Christmas tree at the 900 North Mall is always breathtaking,

The Lack of foot traffic to get in the mall left much to be desired, 

For even Santa was feeling a bit forgotten today (notice there is no line at the bottom right of the photo:

People were not fighting to get in Neiman Marcus:

Or Saks Fifth Avenue

But crowds at Apple let me know iPods, iPhones and Macs are still on everyones wish list: 

The overflow crowd at Garmin let me know there are still lots of people trying to find their way in the world:

There were two separate massive protests. One for Chicago Public School Funding picketing in front of Water Tower Place:

Another against wearers of fur marched, about 500 strong, up and down the Avenue:

They had a few escorts too:

But DJ in the window at Nike Town was there to remind everyone, the Holidays are about peace:

There were a few very serious shoppers out:

But the overwhelming majority of people, as evidenced by these crowd shots, were walking around empty-handed. And that's after the stores had been open for well over 5 hours:

So with such photo evidence, I need not wait until Monday's reporting period to say this weekend is hinting at Waterloo. I will post Saturday on "What's Next", so look for that.

Since it is the Holiday Season and I want to end on a high note. Treat yourself to one of life's great treats.

If you are in the vicinity of the Peninsula Hotel, just a block west of Michigan Ave. at Superior, there is no way you should pass up Pierrot Gourmet's, WORLDS BEST HOT CIDER!

They regulate the temperature of the cider to the outdoor temp. So if it is very cold, the cider is made very hot. However, if the temp is more mild like today's lows 40's, the cider is served hot, but at a drinkable temperature.

The crew knows a bit about the temperature because the drink stand is OUTSIDE the restaurant. Warm friendly faces and attitudes to match make this a stop every Chicagoan and tourist should put on your schedule.

The Hot Cocoa, served with a semi-sweet chocolate plastic stirring spoon, also cannot be beat.

Notice also, they maintain their 5-Star standards (hello authentic sterling silver carafes), even outdoors.

So even if you cannot afford the splurges of holiday's past, you can always afford to treat yourself to 10 minutes of civilization, if only in the form of a warm drink in your belly.

Gloomy Outlook, But Not For All

Most retail analysts have already written the eulogy for this years Holiday Shopping Season, and they may be correct. However, not all retailers find themselves facing the same obstacles in their path to a successful, 4th Quarter.

There are, in fact, several retailers that should perform strongly in the face of what many are calling the "toughest Holiday outlook in recent memory." Stores that should vastly outperform their counterparts include: Costco, GameStop and Wal-Mart.

Costco is a membership warehouse retailer that carries a wide range of name-brand products, from Snickers and fresh seafood, to Travel and Home Improvement Services, even funeral caskets at select locations.

This holiday should prove to be a boon for Costco above and beyond everyone else because of financial pressure being put on the top end of the consumer segment. The global financial crisis has had an impact on more than just Wall Street. So as more people start to tighten belts across the country, the question will not become "what can I live without", but rather "how can I live the same for less?". 

Costco, with its spotless stores, wide-aisles, hefty and brand-relevant assortment, coupled with a welcoming, friendly, well-informed staff is poised to become the favorite destination of many a budget-cruncher between now and January.

Sales are poised to surge in their electronics category, where the popular Vizio line of plasma TV's deliver a lot of television (up to 60"), for not much hurt on the pocketbook (under $3000). Add to that a full  line of IPod products, as well as several GPS options, all at a discount, and you start to see why this is an opportunity shoppers will not pass on.

The category that will really drive Costco to the top of the "holiday winners" chart this year will be it's unending supply of name-brand household essentials, all at incomparable prices. Whether it's Tide detergent, Starbucks coffee, Heinz catsup, Special K cereal, Crest toothpaste, Shiseido facial cream, Huggies diapers or Advil and Aleve pain tablets, this store has all the bases covered. 

So as more and more Americans make saving a priority, while trying to maintain the lifestyles to which they have become accustomed, stores like Sam's Club will get a bump. The clear winner though will be the retailers that carries the familiar products, at fantastic prices. That store is Costco.

The only category that seems to be bucking every negative trend in the recent retail market is, consumer electronics. Think about it, over the last eighteen months we have seen the wildly successful rollouts of: Nintendo's Wii, Sony's BlueRay DVD and PS3, Apples' IPhone, IPod touch and MacBook Air, Google's G1, BlackBerry's everything, afordable HD camcorders, Microsoft's Zune, as well as others I am sure I am forgetting at the moment. Wow!

Thus far, in 2008, recording artists have produced 15 Platinum albums, with Lil' Wayne's "Tha Carter III" leading the way with sales in excess of 2 million copies. That pales in comparison to the unprecedented 26 video game titles that have sold over 1 million units in the U.S. alone since January 1 of this year. When you consider the top selling video game title of 2008, Wii Sports, sold 6.4 million copies in the United States alone, you start to grasp the gravity of the situation.

GameStop, with 4000+ stores in the U.S., is the retailer best positioned to reap the benefits of the video game phenomenon during holiday 2008. The store is, quite literally, everywhere. And we need them to be. 

They also have something every retailer in America only dreams of replicating, a staff of "users", or people that use and know the ins and outs of everything sold in the store. Non-gaming adults can walk through the doors of a GameStop, ask for a gift suggestion and, depending on how many associates are on staff, get a lively debate on the merits of many options, generally ending in your walking away with a sound choice, sure to satisfy the most ardent gamer.

Beyond being helpful and knowledgeable, the return policy is beyond fair (I would say the best in the retail industry). Just bring the receipt, along with your opened or unopened product, and you can exchange the item, as long as it is within 30 days. This is most fair because the average gamer is more than happy to visit their GameStop more than once a month, if not once a week. 

The Video Game Industry, more than any other, has emulated and capitalized on the model of the Motion Picture Industry's model of making events out of big releases. With the hyper-successful releases of GTA-IV and Halo-3, as well as last nights Fall Out 3, they seems to be going about utilizing this strategy to it's full potential. They also have the benefit of rolling out a few MAJOR titles this year. For unlike movie titles, video game sequels are sure things! 

This holiday season will see the release of Resistance 2 (11/4), Gears of War 2 (11/7), Call of Duty 5 (11/11), Tomb Raider: Underworld (11/18) and Prince of Persia (12/2), which gets a "Batman Begins" style franchise reboot that looks impressive so far.

So, barring running out of merchandise (don't laugh, it happened a lot during holiday 2007), Gamestop seems a sure bet to have a break-out 4th  Quarter.

The last "winner" of Holiday 2008 will be Walmart. 

If for no other reason than they have the smartest (no one claims most beloved) team in the business. They are just spot on in their forecasting, with most other retailers sitting around waiting for Walmart to break the good/bad news and react accordingly. The problem this year is, there will be NO TIME to react to market conditions. Retailers will sink or swim based on the decisions their merchandising teams made, some as early as February 2008. Do you shudder at the thought? I certainly do. 

I can tell you I would not be comfortable with a retail decision made in mid-September,before the market meltdown, let alone 3-9 months ago. The Walmart team are always, always, always analyzing every aspect of their business, so they have razor-thin margins, and the best inventory management systems in the business, hands down. This will allow them to make the moves necessary to ensure they are taking advantage of every opportunity that presents itself within their stores. The combination of speed and information will allow them to emerge better off than almost everyone else. Don't look for a massive increase, but expect them to come away with a win, if only marginal.

There are certainly storm clouds on the horizon this holiday season, however, I am comfortable in saying these three retailers brought their collective umbrellas.

Best Product of 2008 = Consumer Democracy

Shop Savvy is a new application available on the new G1 mobile phone, powered by Google Android and sold exclusively through T-mobile.

This is the most promising and impactful development on the retail frontier right now. 

Why you ask?

This is literally the democratization of the pricing process. Imagine a customer armed with the knowledge of how much an item they are interested in purchasing cost at every retailer in the immediate area, as well as online.

Well, imagine no more. This amazing application scans the bar code on any product, then gives you the price and location for every retailer selling that item in your current zip code. As a bonus you get prices from online retailers and contact information for each of them. 

Now, if you are on the train and the person next to you recommends a book they are reading, you can scan the bar code and purchase it when you get off the train. The bottle of Veuve Clicquot may cost a few bucks less down the street, find out immediately.

Here is a demo of the application:

There is so much upside to Shop Savvy that I cannot imagine anyone not seeing this as a necessity. This will force retailers to compete on price, thus ensuring that each customer really is getting the best price on their purchase.

The future is here and it's name is Shop Savvy, on the G1 mobile phone, powered by Google Adroid, available exclusively at T-Mobile.