Login | Help

Melissa Preddy

Veteran financial writer Melissa Preddy served as a business writer, editor and columnist for The Detroit News from 1995 to 2008, is a Michigan-based freelance journalist. She now works as a writer and editor for a medical research unit of the University of Michigan Medical School. Follow her daily posts. | E-mail: Melissa Preddy

banner ad
0

Scotch whisky plays a key role in Scotland’s independence vote

Scotch Whiskey on the rocks in a glass amber

The whisky industry is in a special position in this debate over Scotland’s independence. Photo: Scotch Whisky Association

For business writers, enlightening readers about the local ramifications of global events is interesting and rewarding.  And this week,  with all eyes on Scotland, you might take a few moments to show your audience how happenings across the pond might ripple back toward them.

Scotland, a member of the United Kingdom, is allowing citizens to decide Thursday whether or not Scotland should become an independent state; it’s obviously a decision that will have enduring economic, political and social consequences for all of the U.K. and Europe.  (Think about the movement that wants Texas to secede from the United States and how it would feel if that actually came down to a vote, to get  a sense of the identity crisis this weeks’ referendum is stirring in the U.K.)

Polls say the outcome is too close to call, and political leaders on both sides are vigorously arguing their cases.  Here’s an NBCNews primer, “Ten things to know about Scotland’s independence referendum” that will help you with background on what it calls Britain’s biggest constitutional upheaval since the revolutionary wars. 

Yes, yes, some might be thinking — the constitutional crisis, the history in the making — we get it, but what about the whisky?!  What’s this going to do to the price of my  single malt?

The United States buys more of that country’s potent amber liquor (and don’t call it whiskey; the Scots prefer their own spelling without the e) than any other nation, about $1 billion worth each year, according to Quartz.   According to CNNMoney, about 40 bottles per second are shipped out of that country every second, and Scotch whisky makers are worried that Scotland could lose out on trade privileges, or face stumbles over an independent currency.  The Scotch Whisky Association, the trade group, points out on its website that its industry sells to 200 nations and that a new Scottish government would be hard pressed to support half of that with diplomatic and trade infrastructure. 

Are U.S. Scotch whisky dealers worried?

I think it would be interesting to talk with area liquor dealers, wholesalers, retailers and restaurants about demand trends in your area, any concerns they may have about access to the levels of quality and quantity of Scotch their business needs, and other items of interest related to the booze.  Are “economy blends” rising in popularity in your market, as this Spirits Business piece says they are in some regions?  Check with your state’s regulators – the liquor control commission or similar body — about available data.  Can you graph which ZIP codes or counties are buying which brands of Scotch and how much? 

What about the secondary market  or trade in rare Scotch whiskys?  Bloomberg Businessweek says there’s a “Bull market in single malts” and yes, there is an index to track investment-grade bottle  business; counterfeits also are becoming a problem.  Has any bogus booze been showing up on top shelves in your neck of the woods?

On a contrarian note, instead of writing about imports from Scotland,  you could take a look at local distillers trying to give the masters a run for their barley.  And here’s a piece from the Columbian in Washington state’s Skagit County about the specialty business of growing and producing malts for distillers, brewers and bakers.

Energy is a big Scottish export and of course, so is salmon as this recent BBC piece points out.  And Today.com says thanks to Outlander, Scottish food may be “the next big thing” from haggis (no!) to savory pies. 

Just as a note; because Scotland still is part of the U.K., at least as of this writing, the usual import/export data for just that region is not available from the U.S. Trade Representative; here, however, is a BBC  piece about the size of the Scotland economy; it notes that many of the countries top producing companies aren’t owned within the country. 

0

Solar Power: Can the blazing demand for it be sustained?

Solar Power: 

Sometimes a theme won’t take no for an answer; it keeps bubbling up here and there demanding to be recognized.

A couple of weeks ago, a tradesman recommended a solar-powered charger for one of my electric-powered household gadgets.  Then I came across this story about solar-powered smartphone-charging park benches.  A few blocks down from my home, an early 20th century Colonial has started sporting sun-seeking panels on its roof.

Clean solar power concentrator

A team of researchers at Michigan State University has developed a solar concentrator that creates solar power while allowing people to see through the window. Photo by Yimu Zhao/Michigan State University

And this weekend, buzzing down the interstate, what should I behold out on the berm behind a glitzy hotel casino but an array of giant solar panels.   The notion of all of those watt-hungry slot machines whirring away with sun power is quite intriguing; casinos aren’t exactly the most eco-friendly of venues in general so if they’re getting into solar power for green or greenback motivations, it might be worth a look at other ways the energy of the sun is pervading ordinary consumer life.

According to a recent Motley Fool article based on this just-out report from the Solar Energy Industry Association (SEIA), second-quarter solar installations nationwide were up 21 percent year over year and more interestingly, for the first half of 2014, solar power accounted for more than 50 percent of all new power generation capacity, leading natural gas and wind power.  Bloomberg says demand  has been so brisk it’s driving the first shortage of solar panels since before the Great Recession.

In a recent analysis, the market research firm IBISWorld dubbed solar power one of “five industries helping to power the U.S. economy” and says that while growth will back off the smoking  70 percent annual rate of recent years, it still expects robust revenue and job creation from the industry.

Part of the reason for that is falling costs; this year-ago piece from technical journal PV Magazine said U.S. solar power costs had fallen 60 percent in the preceding 18 months; Clean Technica reported this past April that the “insane cost drop” may even have an  impact on gas and oil prices in the decade or so to come.  Certainly, the notion of electric-powered cars being fueled up at solar-powered car-charging stations will seem like a no-brainer to our descendents. 

Check with architects about solar power in your area

Are there any design differences or quirks of commercial or residential structures powered by the sun?  And ask builders about demand for solar systems; here is a National Association of Home Builders piece about some considerations (aesthetics for the neighbors among them) that contractors must keep in mind when adding solar to residential complexes.  Are new  dwellings being outfitted with solar in any routine manner? And what is the demand for retrofitting of older houses?  Here’s a blog post from the Union of Concerned Scientists that says as many as 4 million houses could be equipped with solar power by 2020.  In a nation of roughly 110 million households, that’s a puny fraction, but may be encouraging to the industry and to advocates of sustainable power.  What are area electrical power utilities doing to compete?  What state legislation is afoot regarding sun power? 

 The SEIA offers a lot of statistics about the industry.  And a quick Google search turns up many trade publications that focus on solar power; these industry journals always are worth pursuing for story nuggets. 

 And just for fun, here’s a round-up of solar-powered gifty gadgets for home use.

0

New gadgets mean more demands for smart e-waste recycling

Last week’s news that Apple will be launching a new iPhone 6 and an iPhone watch — as well as the less-festive flash that poor Amazon has had to cut the price of its sluggish selling Fire mobile phone to 99 cents (from about $200) — conjured up visions of mountains of older models tossed into the waste stream.

Pile of old computers waiting for e-recycling

Berkeley Lab estimates that a whopping 6,000 computers become obsolete every day in California.

According to eCycle.com, the wireless buyback site,  about 130 million phones are discarded each year in the United States alone, with only 17 percent or less recycled.  (Some estimates are higher; Google ‘discarded cell phones’ for some staggering photographs.)  And that’s just phones; according to this somewhat dated EPA fact sheet on “end-of-life electronics,” the mobile phones represent merely a tiny fraction of the gadgets that are dumped each year, most not recycled despite containing many toxic ingredients (and valuable ones like the gold and silver used in electronics) that can leach into soil and water. 

Between the tech industry news and the upcoming holiday season, during which all sorts of electronic gadgets become hot-selling gifts, you might want to do a consumer piece or two about electronics recycling programs offered by communities and by retailers.  Or you could contact manufacturers and researchers about how the phones and manufacturing process itself is slowly being made greener, as referenced in this Environmental Leader article.

E-recycling: Gadgets in, gadgets out

The Electronics TakeBack Coalition offers facts and figures, as well as other resources related to electronics recycling, as well as an interactive map of state-by-state legislation.  (Compare your state to neighbors.) 

And the electronics waste recycling industry is interesting too, if you can find any local players.  (Much of it is shipped overseas to third-world countries for the unenviable task of materials reclamation;here’s a piece by The Economist on the outsourcing of what it calls ‘dirty work.’)  The research firm IBISWorld is just out with two new reports, one on the cell phone recycling industry and one on electronic goods recycling, both of which predict expansion for reasons ranging from rising commodity prices to increased regulation.  (You may request the full reports from IBISWorld’s very responsive media relations department.) 

Here’s a press release for the ecoATM, which its operators say has gobbled up three million devices — one million year-to-date in 2014.  The self-service kiosks allow consumers to sell their old devices for a few dollars or more, and the press release says the machines validate sellers’ identity to prevent the sale of stolen devices.  I had not heard of this concept; if your readers haven’t either they might like to learn more about what happens to their devices once they’ve been dropped off.  Here’s a ZIP code searchable database to find an ecoATM in your market.

Another offbeat idea related to the smartphone announcement is the burgeoning cell phone tower sector; I swear half a dozen more have popped up in my general area in the past few months. AntennaSearch.com says there are 551,362 towers in the United States as of late August (wow!) and more than 1.7 million actual antennae.  The site offers a searchable database that will give location and even ownership info of towers within a radius of your search terms.  I am not vouching for the site; it might be safer to go through its media relations office with inquiries till you can ascertain that the downloads it offers are legit.  But a story and graphic on the proliferation of towers in your area, who owns them, whose making money by leasing the land to the owners, and what towers are planned, would likely be a hit with readers.

0

Alibaba’s mega-IPO highlights evolving e-commerce scene

Talk about “party like it’s 1999.”   The upcoming IPO from e-commerce giant Alibaba is going to smash records for initial public offerings at an already sold-out $21.1 billion, according to Reuters, and it brings back memories of the good old days when stock buyers were clamoring for shares of other Internet sellers like Amazon, eBay, Drugstore.com and the hangdog Pets.com.

Alibaba orange shopping bags. The company has almost single-handedly turned China into the world’s second-largest e-commerce market. Photo: Bloomberg

Alibaba has almost single-handedly turned China into the world’s second-largest e-commerce market. Photo: Bloomberg

Yes, there have been mega-IPOs of Internet-based companies since then, like Google, Facebook and Twitter, but they are more ethereal; there’s something about the nitty-gritty trade of shopping sites that is especially captivating.  To investors, anyway — apparently Alibaba’s offering was fully subscribed after only two days on the road and like most offerings, the privilege of buying in goes to influential investors with the chances of individuals purchasing any shares just about zero. 

It’s possible, however, that the company — which controls 80 percent of China’s online commerce, according to most reports, and is serving a growing Chinese middle class with more disposable cash for consumer goods.  Aside from raising practical and philosophical questions about the increasing pace of consumption of just about everything on our planet, the notion of an online seller that can dwarf a company like Amazon is quite intriguing.  I don’t have a huge notebook full of story ideas related to Alibaba, but since we’re all likely to be hearing a lot more about it soon, here are a few ideas and resources:

What’s Alibaba mean to U.S. companies?

What opportunities might a growing Alibaba provide for entrepreneurs in the U.S.?   How will people who make a living selling onEtsy, eBay, Amazon marketplace, Zazzle, CafePress and and the like have to change their game to compete?   Some sellers are finding it a new niche, here’s a piece about one couple taking part in the company’s beta test of “11 Main,” an online mall for American consumers featuring a handpicked set of vendors. 

Here’s an interesting piece from the German publication Deutsche Welle about “What Western rivals can learn from Alibaba IPO,” that cites services Alibaba provides to vendors and practices like pay-on-receipt that appeal to consumers.  How will American e-commerce sites from the giants to small operators adapt to new competition?   And this CNNMoney piece “7 things Alibaba users can do,” highlights the company’s breadth of services. 

Counterfeit goods and copyright infringement have been of concern; according to this OpenSecrets.org report, Alibaba succeeded in getting itself removed from an Office of the U.S. Trade Representative list of sellers “notorious” for those problems, thanks to brisker lobbying.  That might be an angle you can localize, because Alibaba serves as a marketplace for just about any sort of good including consumer products and wholesale or raw materials sold business-to-business.   Here’s an example from an industry trade journal, Healthcare Packaging, about how one sector worries about “knock-off” products.  Try contacting companies and industry trade groups in your area for their take on a a growing Alibaba presence. 

And on the flip side, what businesses in your neck of the woods benefit form access to China’s supply chain through a user-friendly intermediary like Alibaba? Here’s an explainer from Forbes about how the company adds value.

0

Halloween 2014: There’s no escaping the holiday’s creep

OK, even for a lover of seasonal biz stories, Halloween stories the first week in September are a bit of a stretch.

Or rather, they were.  But this year, Halloween’s orange-and-black is the new … Labor Day story, apparently. If you don’t find an angle and jump on it soon, you might be playing catch-up with competitors when October actually rolls round. 

Frightening Friday

A look at the calendar points out that Halloween falls on a Friday this year, which perhaps bodes well for non-retail industries like restaurants and catering, bars and even getaway tourism.  Check now on bookings for Halloween parties and rental supplies such as costumes, tents and décor — as well as demand for performers from magicians and psychics to bands. 

Walgreen's Elvis was selling for $9.99 at Halloween. Photo: The Adventures of Kristin and Adam on Flickr

Walgreen’s Elvis was selling for $9.99. Photo: The Adventures of Kristin and Adam on Flickr

The three-day weekend possibilities are not lost on the travel industry; special packages like the $349 Halloween Night Ghost Package at the Hotel Galvez in Galveston, Texas already are out there.   That dinner and tour include tips on ghost-hunting and a ghost-detecting meter; those wishing to stay overnight at the reputedly haunted in also can opt for the Ghosts of the Galvez package.  I even found a hotel in Italy offering a Halloween package and “tasty Halloween surprise” to show you how far the marketing power of this goofy holiday has spread.

The operation of large-scale Halloween haunts, either as a season-extender for traditional theme parks or as temporary installations along with apple-orchard tours and corn mazes, is an interesting biz and, as CNBC reported last year, a $300 million industry and growing.  Who’s profiting in your area from indoor and outdoor scare parks?

Haunts even can save a historic property; here’s a piece about how ties to the movie “The Shawshank Redemption” has spurred tourism at an old Ohio prison, which instead of being demolished now is being used for creepy tours at Halloween as well as mystery dinners and ghost-hunting expeditions.  (The latter two are industries you can check out in your neck of the woods, too.  Ghost-hunting in particular seems to be a rising hobby; CNN said last year that reality shows about paranormal activity have spurred interest and upped competition among sleuths.)

A workplace story springs to mind, as well.  How will employers referee Oct. 31 vacation requests, if lots of people want to make a three-day weekend of it or just leave early to start partying.  Do parents of trick-or-treaters get preference over travelers?  Will Hallow-teeism be a problem if revelers just call in sick? 

Halloween by the numbers

Of course, retail is the focus of a lot of All Hallow’s Eve commerce.  Here are the “hair-raising” stats from the National Retail Federation. CNN reports that “Halloween stores come early this year” with pop-ups already appearing in malls and strip centers — in addition to the consumer and marketing angles, I’ve not really seen a good reader-friendly piece on the business model of pop-up stores.   Can online sellers or small retailers benefit from trying out a pop-shop in a more highly-trafficked area?  Here’s a Huffington Post article with some advice and industry statistics.  Talk with center operators and mall developers about what’s working and what’s not for small entrepreneurs.

And here’s a piece from Fortune that notes the pop-up model is being used for more than seasonal shops; it’s a way to test products and services without a huge commitment. 

Other retail-related angles are jobs, hot-selling merchandise, popular costumes for 2014. Grocery stores increasingly seem in on the act, from themed cakes and cupcakes to knickknacks.  Candles shops sell witchy scents and thrift stores tout themselves as one-stop shopping for costume ingredients.

 And, do not forget, in the Hispanic community the day after Halloween, Nov. 1, is Dia de los Muertos with its own traditions and growing appeal to marketers — and not just in communities with Hispanic heritage.  Dia de los Muertos party supplies, sugar skulls and other merchandise is becoming more common — there’s even a popular casino slot machine featuring dancing skeletons and festival music.   And here’s an article about a suburban Detroit taco restaurant using the commemorative day as a fundraiser.

0

Joan Rivers’ passing spotlights surgical clinics, memorabilia sales

You know you’re a business writer when word of someone’s death spurs you to thinking about the economic impact of that permanent farewell.  

The thought flitted across my mind the other day on word that comedienne Joan Rivers had died at age 81, and apparently I was not alone.  An Examiner.com story says “Ghoulish? Joan Rivers memorabilia value soars following her death,” and notes that items like theater tickets, photos and even a Joan Rivers internet domain have been in hot demand the past few days.  You might want to check with local collectibles and antique shops, and do a ZIP code search on eBay to find online sellers in your area. 

Joan Rivers photo in hands of a fan

A fan asks for a Joan Rivers’ autograph in 2010. Photo: Steve Rhodes

Rivers also was a spokeswoman for a lucrative line of apparel and jewelry; Forbes said she’s sold $1 billion worth of the merchandise over the years at home shopping channel QVC, where she made frequent appearances.  (Numerous QVC hosts reportedly attended her memorial service on Sunday.)  Look for these items to start popping up on Etsy and eBay too. 

Over at QVC’s discussion boards, executives paid tribute in an online and devoted shoppers expressed not only dismay but hopes that a commemorative jewelry piece would be offered and requests to “keep her jewelry line alive and growing.” 

If you have any local companies that depend heavily on a celebrity spokesperson or even well-known local pitchman (around here, appliance and furniture stores seem to rely heavily on goofy ads by their front men) you might talk with marketing experts and the companies themselves about the pros and cons of identifying products or services closely with a single individual. 

Another angle is bookings; on one Detroit-area radio station the other night, the owner of a venerable restaurant said that Rivers frequently played private parties at his bistro and that a couple of upcoming evenings had been sellouts; I wondered what will happen to that venue and many others nationwide that probably had Rivers booked for upcoming public and private events. USA Today said she had over 100 comedy club engagements per year, for example, as well as 2 million Twitter followers.  You might check around with restaurants, clubs and casinos in your neck of the woods — patrons will be wondering about refunds, substitute performers and the like. 

And of course, besides marketing and merchandise, the circumstances of Rivers’ death have raised questions about the safety of outpatient surgical clinics.  It might seem tacky to use a celebrity passing as a news peg for stories about medical safety, and I planned to refrain.  But after seeing public and private reaction over the past several days I do think it’s top of mind and that plenty of people now are wondering what dangers they are running when they get sedation for colonoscopies, endoscopies and even serious dental surgery or other outpatient services.    A  local story about regulation of such clinics (standalone and those operated as concessions on hospital premises) would be of great interest to audiences.  Patients might be surprised at the number of for-profit centers, too.

It’s an especially interesting topic in light of this story from Healthcare Finance News, which notes that price concerns are driving more hospitals to expand outpatient and ambulatory surgical centers even as inpatient surgery facilities shrink.  Bloomberg says “Surgical center used by Rivers part of outpatient push” and notes that doctor ownership of such centers, which is common, raises conflict-of-interest questions.  Again, ask health systems and regulators in your market about shifting patient options and safety concerns.  A recent study of outpatient urology outcomes found, for example, found that more preventable deaths occur as surgeries are shifted from inpatient to outpatient. 

Here’s a Baltimore Sun piece about issues related to uneven oversight of freestanding surgical centers.

Perusing Outpatient Surgery Magazine might be helpful to understand industry issues and trends.    And this piece from California suggests that lower public reporting requirements have been implemented for for-profit surgical centers; something to look into in your region. 

0

Quicktips: From pampering people and pets to scams and surcharges

Another raft of ideas jotted on scrap paper or e-mailed to myself are in danger of sailing off into the horizon, so welcome to another installment of Quicktips, the place we salvage viable story pegs at risk of becoming forgotten flotsom.

Hotel fees.

In our increasing a la carte economy, hotel fees are the latest buzz — as the L.A. Times reports, a new survey finds that hotels will collect more than $6 billion in tacked-on charges for items ranging from early check-in to chilling your own Coke in the mini-bar.  It’s a story ripe for localizing, as KTAR did here, especially with convention and conference season getting into full swing.  Be sure to talk with event planners for professional and trade groups — how much of a turnoff are these surcharges?

Looking spiffy.

If you haven’t done your mancaping story yet, here’s an example from the Detroit News; they took a peg from Gillette’s introduction of a non-facial shaver “built for male terrain” to generate a story about men’s increased demand for grooming services boosting biz at area salons.  (Iwould be curious to hear local stores’ report on demand for that new male razor, too.)

Building for pets, not just people. 

Not long ago on a charity tour of old houses, I saw one where residents had converted a pantry into a sumptuous suite for their small dog, complete with scrollwork door replacing the solid door, a raised bed, dishes and more.  Beats having a crate in the middle of the den, I thought, and wondered how much that fancy millwork had cost.  Turns out they were cheapskates compared to what some pet-owners are spending on built-from-scratch amenities for Roxie and Rex:  The Associated Press reported recently that at least one construction company is cashing in on the $55 billion American pet market with animal suites designed into new houses.   The 170 square-foot area (that’s more than a 12’x12′ bedroom, folks) includes tiled wash area, commercial dryer, bunk beds and more — even a washer/dryer and TV set for the pooches.   That builder, Standard Pacific Homes, is offering the pet suites in 190 developments so perhaps there’s one in your market — or check with other builders and remodelers on how animal amenities are being incorporated into houses.  Here’s a Gannett piece about microchip activated pet doors, a converted bath and even simple modifications like a drawer that holds a feeding station.

Another new phishing scam.

They’ve tried messages from funeral parlors and court clerks; now the e-mail trolls are using fake messages from toll collector EZ Pass to scare consumers into clicking on their fraudulent links, as Consumer Reports notes.  Information Week says phishing scams are at an “all-time high” and that hundreds of thousands of attacks in 2013 cost nearly $6 billion; IW warns that worker training is not keeping up with the scams.  We know big employers have IT departments aimed at foiling sophisticated hacks, but what are they doing to keep front-line employees from letting scammers in via innocent-looking e-mails?

Saline shortage. 

A shortage of IV solution continues to plague medical professionals;  I’ve been wanting to suggest localizing it and here’s a neat angle from the Columbus Dispatch about EMT workers now accounting for supplies via a high-tech vending machine.  And here’s a fresh look by the Denver Post at how hospitals are coping.

0

FDIC report helps you make local sense of record bank profits

A recently released report from the FDIC on quarterly U.S. bank performance contains the nuggets for a variety of stories that reflect your local area’s economy.

As Reuters reports, banks earned more than $40 billion in the second quarter of 2014, according to the Federal Deposit Insurance Corporation’s Quarterly Banking Profile. 

citibank branch in the rain

Screenshot of AP video from HuffPost Live

Financial institutions are setting aside less money to cover bad loans, Reuters says — presumably a sign that borrowers are less likely to default than just about any time since 2006, according to the loss-reserve data.  Bloomberg also reported on the results, noting that those near-record profits are owed in part to the hottest lending environment since before the recession. (Although it is worth noting that according to the ABA Banking Journal, loss reserves for commercial loans – vs. commercial and residential real-estate loans — are actually up.  What does that portend?  Again, fodder for questions for local banking officials.  Is this trend reflected in your market?)

FDIC reports at state level

So, as we head into the home stretch of 2014 and the end of Q3, the time is ripe for a sit-down with some of your region’s banking executives.  Use the FDIC report as a springboard to talk about how your area echoes or bucks national trends, any big or noteworthy deals they’ll disclose, the creditworthiness of borrowers,  small business trends they’ve observed and competition for borrowers. 

The FDIC reports are available at the state level; go to this page and select your state from the drop-down menu; note that you also can run the state report for the  same quarter in 2013 and 2012 for comparative purposes.  You might want to enlist a commercial accountant, bank industry analyst or other pro to help you parse the financial statements, but some year-over-year stats are obvious and great fodder for those executive interviews.  Running the Michigan reports, for example, I see that the number of banks is down by several, employment in the banks reporting to the FDIC is down by several thousand jobs in just a couple of years and that “non-performing assets’ (past-due loans) are down quite a bit. 

I think more than any specific bank’s financials, however, readers and viewers would like to know what this means for them.  Are construction loans up and likely to ripple out through the community with jobs?  Any new developments coming in, or small businesses expanding?  What do these metrics translate into (if anything) relative to momentum, growth and recovery in the local market.

Banking on jobs

And speaking of jobs, I had a very interesting chance conversation with a tradesman servicing my house.  He mentioned that his wife was one of many long-time employees being let go by JPMorgan Chase, which did project 8,000 layoffs earlier this year.   In addition to the worker’s plight — according to this conversation, she, a 25-year employee of the company, was offered a modest buyout package or the chance to take a job at a $20,000-per-year pay cut — the inside view of the situation offered some insight into the new bank branch paradigm.  Again, this is hearsay but if I were on the beat I’d be hotfooting it to some regional bank offices to inquire:  Assistant managers are being eradicated and tellers trained to do some management tasks while working as tellers at peak times of day, and lobby kiosks are being installed to reduce the workload of human bank employees.  

Clearly, banks at record profit levels still see the value in reducing full-time positions and relying instead on a more flexible and lower-paid workforce — a lament of the post-recovery job scene common in today’s business coverage.  Ask all local banks and credit unions about their staffing models today, next year and so on compared to a couple of years ago, and what their rational is for cutting jobs when profits are soaring. 

0

As large-market casinos fold ‘em, how are local casinos holding up?

When the first slot machines hit Michigan a couple of decades ago in a small tribal casino, the notion of spinning the wheels was enough of an unheard-of novelty that my mother and I drove two and a half  hours to the central part of the state, for the pleasure of pumping our dimes and quarters into the slots in a small, crowded, smoky hall with a no-frills motel about a mile down the road.

Now, fast-forward 20-odd years and the United States sports so many gambling venues that for many consumers they’re a routine neighborhood attraction rather than a destination venue.  And the proliferation of gambling opportunities means the casinos each are getting a slimmer piece of the pie, leading to problems in an apparently over-saturated industry.

For example, as of this month, three major casinos in Atlantic City will  have  shut down their gambling operations and hotels this summer alone, eliminating the jobs of thousands of workers.  That follows the June closure of the Harrah’s casino and hotel in Tunica, Miss., another major U.S. gambling cluster.

The crumbling of Atlantic City is a pretty good news peg for taking a look at your market’s casino operations.  (And if their aren’t any, how about a look at what level of casino tourism your area’s consumers generate for nearby markets?)  For the most part it seems that Americans still are spending heftily on gambling but the pattern of the getaway week or weekend  has given way to shorter drop-ins at the local hall.

Huge Atlantic City Casino Closes Down NPR

Revel Hotel Casino in Atlantic City, N.J. has closed a little over two years after opening.

The University of Nevada at Las Vegas has a Center for Gaming Research that might also be a helpful source of stats and data.  And of course the industry trade group, the American Gaming Association, offers a lot of stats including its State of the State report which gives numbers for individual markets.  If you are including tribal casinos in  your report — more difficult because of less transparent reporting requirements — try IndianGaming.com and this organization, Casino City Press – ask if they’ll share their market research reports free of charge with journalists.

Beyond the casino companies themselves, you can look at the economic impact of gambling in your community.  It s a huge topic that is fraught with different special-interests and views, of course.  The topic isn’t as hot as it was 10 years ago during the proliferation but you might check with your region’s federal reserve bank for any studies and commentary; this 2003 report from the St. Louis Fed might help in understanding some of the issues and metrics to evaluate.  Be sure to track down suppliers from food distributors to construction and cleaning firms about the effect on them of waxing and waning casino attendance.  Many are required to be licensed by the state gaming commission so check for lists of vendors there.

One thing I would recommend for anyone on the casino, real estate/economic development, personal finance or marketing beats: Sign up for the loyalty programs at all of your area’s gambling centers.  I am on the mailing list for several national ones such as the Caesar’s Entertainment Total Rewards program as well as a few for local standalone casino/hotels.  In a highly competitive market, return visits are the lifeblood of a casino.  Here’s a report on “The lowdown on casino loyalty programs” that shows some metrics about how they drive business for gambling parlors.  Here’s a 2010 paper from the University of San Francisco on the effectiveness of casino loyalty programs that makes some interesting differentiations about casino player segments (“Mr. High Roller” vs. “Happy-go-lucky,” for example) and  a blog post from the marketing association Loyalty360 about casino programs.  (Good blog to bookmark for a variety of beats, by the way.)

Tea leaves in casino marketing

The frequency of their direct-mail pitches and the interesting psychology behind the marketing ploys are quite interesting and dissecting them might form the basis for some interesting heads-up for readers.  Obviously, gambling fulfills (or not, for problem gamblers) some emotional needs as well as filling entertainment  hours, and deciphering the ways companies connect emotionally with consumers is fascinating.

For example, one chain with a casino near me is constantly sending “offers” for giveaways of items like coolers, camp chairs, small appliances or housewares like wine glasses and down comforters.  It’s pretty apparent they buy overstock or outlet items for pennies on the dollar and woo consumers with the bait of a “free” electric griddle or spa bathrobe that probably cost the casino $10 or $15.  Odds are the consumer will plop down and spend far more than that at a table or gambling machine, of course.  Other common lures include gift cards for name-brand gas stations, or even gift cards to big-box chains like Best Buy.  Special events like free-car drawings and raffles also are common to get people in the door.

If you don’t want to join the “players clubs” yourself or won’t gamble enough to keep yourself on their active mailing lists, it might be fascinating to enlist some regular patrons and ask them to save up their casino direct-mail pieces for a month, a quarter or even a year.  Of course, players who spend more get more — free concert tickets, private dinners, parking privileges and meal “comps,” etc. — and if you can find some brave consumers who will share their win/loss statements as well as their direct-mail advertising,  you could tote up each and show prospective gamblers what those “free” coolers, buffet dinners and the like are really costing them.  (And I have nothing against gambling but do think everyone should approach it with a realistic view of casino tactics.)

Might be interesting to check with area bankruptcy attorneys, CPAs, debt counselors, etc. to see if they are seeing more or fewer consumers with gambling-related problems.