Reading 9/20/07

I read so much stuff. I used to tell you about it but stopped. I guess I feared boring you. Maybe this will be the start of a new occasional series. Ignore what you will. Today I’m motivated by a recent spate of material about consumer behaviors and signaling, coupled with changes in the luxury market such that I thought I’d write a conglomeration of the material but alas, have done no such thing. Therefore, in the interests of things not totally getting away from me, here’s some highlights of what I’ve been reading over the past couple of days. In expectation of your rapt attention -most certainly you’re jumping up and down, clapping your hands with glee- I hope to finish the pending entry regarding the upper end of the market and niche products soon. I’m sure you can’t wait.

First, my newest favorite research paper, Secrets Revealed: How Magicians Protect Intellectual Property without Law from Jacob Loshin at Yale Law School. Love, love this paper, there’s similar analogies to fashion with respect to gatekeepers of which I’m one. In the magic industry, IP law can’t protect innovators because you have to disclose the trick to get a patent. Still, innovation thrives. This paper explains the mechanisms of gatekeeping and informal compliance with group norms. Heuristic behaviors if you will. If you’re interested in fashion IP, read this (free download too). I also find this interesting because my friend Amy Down’s husband is a successful magic trick inventor. I thought that was a very unique business to have.

From Environmental Health Perspectives: Waste Couture: Environmental Impact of the Clothing Industry.

Globalization has made it possible to produce clothing at increasingly lower prices, prices so low that many consumers consider this clothing to be disposable. Some call it “fast fashion,” the clothing equivalent of fast food.

From Marginal Revolution, Politically Incorrect Paper, a continuing series.

Several years ago Bill Cosby chided poor blacks for spending their limited incomes on high-priced shoes and other items of conspicuous consumption instead of investing in education.

The above is part of an ongoing discussion that’s descended into a discussion of signaling. The latter is also referenced in the SBS paper below. File this under consumer spending.

A bit of recent research from the Stanford Business School is Specializing Can Mean Bigger Sales

A recent study shows that producers whose offerings or expertise are more clearly associated with one or two product categories have better sales than those whose goods or professional identity span multiple categories. The more focused producers throw off subtle hints that they know their stuff a little better, which is not lost on customers.

Another paper on signaling from Wharton, From Cool to Passé: Identity Signaling and Product Domains is about how the quest for cool is never ending.

New research provides insight into how consumers use products to signal membership in social groups, but swiftly abandon those same products when the original message is diluted as other groups co-opt the trend.

Also available in audio. A related article with links to the dissertation is Exploring the Links between Brand Name and Consumer Identity. You may have to sign up but it’s free.

Again from Stanford, Buyer Beware: Shopping Can Lead to More … Well … Shopping

Shopping is a two-stage process, say the researchers. In the first stage, people deliberate about a purchase, weighing cost and benefits, the degree to which they need the item, and so forth. But once the deliberation phase ends and the buying phase takes over, a subtle psychological mechanism comes into play. “People in this transition go from thinking from their mind to thinking from their cart. The cart takes over,” says Khan. “Once that happens, a roller coaster of shopping can begin.” The purchase of an initial item creates what Khan and her associates call “shopping momentum.”…The researchers suggest that people are not aware they are prone to such behavior…Outside the store, then, people think rationally. Inside the store, it’s a different situation…While people may be triggered to shop by the sheer act of shopping itself, there are also factors that can stop the momentum.

Thriving in a Global Economy: The Truth about U.S. Manufacturing and Trade.

Reports of the death of U.S. manufacturing have been greatly exaggerated. Since the depth of the manufacturing recession in 2002, the sector as a whole has experienced robust and sustained output, revenue, and profit growth. The year 2006 was a record year for output, revenues, profits, profit rates, and return on investment in the manufacturing sector. And despite all the stories about the erosion of U.S. manufacturing primacy, the United States remains the world’s most prolific manufacturer–producing two and a half times more output than those vaunted Chinese factories in 2006.

I’ve always been very interested in China’s one child policy. [India has much the same difficulty with the preponderance in the ratio of male to female children and in light of that, have wondered why -if there’s a dearth of available females- that dowries remain the defacto standard. It seems to me, the men should be buying the brides rather than vice versa.] China’s One-Child Mistake from the Wall Street Journal.

On current trajectories, China’s total population will start to decline around 2030. Even so, China must expect a “population explosion” between then and now — one entirely comprised of senior citizens. Between 2005 and 2030, China’s 65-plus age cohort will likely more than double in size, to 235 million or more, from about 100 million now…How will China’s future senior citizens support themselves? China still has no official national pension system. Up to now, China’s de facto national pension system has been the family — but that social safety net is unraveling, and rapidly.

I have an ongoing debate with Eric -a libertarian, hence his position over there in the left side bar under “sites I don’t like but visit anyway”- over the necessity of industrial regulations. Libertarians say these are unnecessary, that industry groups are self policing (tell that to those who recall the Triangle Shirtwaist Factory Fire). Food Makers Get Appetite for Regulation is an article from the food industry; they are seeking increased food safety measures, particularly on imported supplies they need for ingredients.

A stray piece, again from MR, The Fed’s Dirty Laundry and Yours says new efficiency standards for laundering have dramatically reduced the cleaning ability of new washing machines. It’s not so green if it’s brown.

Another piece on China; The Next Cultural Revolution

The Chinese don’t get creativity, right? Sure, they can stamp out a widget, or knock off a DVD, but when it comes to imagination, they just don’t have the gene. Well, keep telling yourself that.

Perhaps my next edition will be a rundown of recent books. I’m terribly remiss in reviewing James Fallow’s book that Grace lent me.

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  1. Eric H says:

    The Triangle Shirtwaist deaths were horrible. But let’s play fair: so are thousands of deaths that occur every year in heavily regulated industries (link and link). Laborers like the TS employees will get more out of a good union like the ILGWU than they ever will out of OSHA. And let’s not forget that Robert Owen was self-regulating.

    The article on foodmakers shows them in the middle of getting religion as a cover of their naked self-interest: “Oh, you mean we can eliminate cheap competition simply by signing on to protectionist regulation?” What’s next – top apparel brands wanting IP protection for their designs? ;~)

    I’m not so much for self-regulation; I’m for third party regulation and consumer empowerment. Look at your computer’s power supply: see the little UL logo on it? What does it tell you? What does the FairTrade symbol on the coffee mean? When you buy a car, do you go on price alone, or do you consult Consumer Reports, CarFax, recommendations by friends, internet reviews, J.D. Power rankings, Car & Driver, or Road & Track reviews?

  2. Leah Barrett says:

    The disparity in male/female birth ratio in India is due to the very well known horrific phenomenon of female infanticide. Read this article though it’s disturbing ( Dowry destroys families financially, the poorest are forced to deal with their girl children this way. The trend will not reverse itself by the simple fact of a lower female birth rate, there’s too much money to be made by men by just getting married. Plus India like the Catholic church is bogged down by history, philosophical thinking; change happens over millennia. Unless there is a female Ghandhiji waiting in the wings. Making the issue as public as possible helps a great deal. Shame on Punjab, Haryana and those states that are leaders in this disgrace.

  3. Josh says:

    I love to hear about what you’re reading, in fact it’s some of my fav posts. Speaking of China, I recommend a book called The China Study by T. Collin Campbell, it’s not apparel related, it’s about diet and cancer. Fascinating book. It turned me vegan this year. Something I never dreamed I would become. I loved cheese too much. I’ll never be the same.

  4. Gerald Joseph says:

    I read your blog often, however, this may be my first comment. I seriously didn’t know you were so well read. Please share with us (your readers) your reading interests and allow us to share our reading lists with you. It would be a great way for us to learn more about our craft, our industry, ourselves, and each other. Thanks. All the best,

  5. krissy says:

    thank you kathleen, these articles were great. i love to hear about what you’re reading. i think of this site as my daily lecture, its a similar fix like university was….new ideas, new ways of thinking, fuel for change, etc…
    definitely keep posting your reads!

  6. Penelope says:

    Ha, I love the bit about the shopping momentum – I’d recognised it in myself before, finding it amusing, and sometimes desperately tried to INITIATE it in myself to overcome my “clothes shopping, nurrrghhhh” lethargy when out staring at clothes rails.

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