Flat Seasonal Staffing at Retail

It is a difficult holiday shopping season to predict, with household income up but consumers showing signs of reining in spending, so it’s no surprise to find that U.S. holiday staffing plans are around the same level as last year. Some of the largest seasonal employers have said they plan to hire the same number as last year: Target, UPS, Walmart, Macy’s. Toys “R” Us is the largest retail chain reducing its seasonal staffing, but it is cutting back its plans only 11 percent. Amazon has not finalized its seasonal hiring plans, but with half a dozen new logistics locations opened this summer, it is fair to guess Amazon will be employing more people in total than last year. Retailers have 3 percent more permanent staffers than last year according to a Challenger, Gray & Christmas survey, so that may reduce the need for temporary workers during the holiday shopping season. Retailers are also investing in new technology that it is hoped will smooth the shopping experience, following a decade of limited investment at retail. If the new generation of apps helps shoppers find what they are looking for incrementally faster, that should reduce crowding in stores and reduce the peak staffing levels needed.

The Random Center and the Gossip App

I just spent more than an hour being fascinated with the story of a forthcoming app that encourages people to write down their opinions of other people. When you rate someone with this app you provide a numeric score which can be averaged together with everyone else’s opinion of that person. The app presents itself as a sort of social-media popularity contest in which, if you possess many of the virtues that make up popularity, you may strive to achieve the lofty goal of a 4 rating on a scale that goes from one to five.

It won’t work, though, and not just because the app strikes most people who hear about it as a terrible idea. The 4 rating a user is encouraged to strive for is out of reach because of the mathematics of social networking. If everyone’s opinion of you is considered equally, then your rating is determined by people who barely know who you are. These are people whose opinion of you is based on superficialities, hearsay, and having confused you with someone else. It is the people who barely know you, or who think they know something about you but perhaps don’t, who determine your rating simply because there are so many more acquaintances than friends. If you have 100 friends while 10,000 people have met you or heard about you, it is the larger group that matters when everything is averaged together. Obviously there is a high degree of noise and randomness in opinions that come from people who don’t really know the first thing about you, and random values tends to fall near the center on average. To consider this question, imagine how you might rate all the people you have met over the past year. It would be hard to form meaningful opinions. In most cases you have nothing to go on. You would mostly be guessing. With so much randomness it may be impossible for anyone to remove themselves from the random center far enough to be ranked as low as a 3 or as high as a 4 when the scores are averaged together.

There is a more fundamental reason why the new popularity contest app I spent so much time reading about won’t work. It is not really a popularity app. Even if the network is the mobile Internet, the medium is writing, and writers are also asked to provide a numeric score, what the app is fundamentally all about is talking about people who aren’t there. In other words, it is a gossip app at heart. One of the problems with gossip is that you can spend long periods of time immersed in it and come away with no information of practical value. After all, isn’t that what I just did? Gossip makes itself seem important, but when you realize how much time you are wasting, time you could have put toward an activity that would better your situation, the appeal fades. An app rooted in gossip will inevitably meet the same fate.

Tip-Shaving in the U.K.

The tip-shaving scandal that nearly brought down a Philadelphia restaurant chain a year ago has popped up in the U.K., where the public has learned of a dozen prominent restaurant chains systematically skimming off as much as two thirds of table servers’ tips. Some of this is legal under current U.K. laws if done correctly, but customers aren’t happy about any of it, and restaurants that get caught out are promising to mend their thieving ways. In the end, the laws will likely change, and at least one restaurant chain will collapse under the weight of customer disapproval, but there won’t be any prosecutions. As in previous tip-shaving cases, that’s because it’s hard for justice officials to imagine that the law is intended to prevent the powerful from preying on the weak.

This Week in Bank Failures

National Bank of Greece (NBG) may be selling its Turkish subsidiary Finansbank. The sale could bring in €3bn, enough to cover the estimated capital shortfall at NBG. NBG had previously been thinking of selling a 40 percent stake in Finansbank, but could get a better price selling its 99 percent stake to a single buyer.

Lawmakers in Greece are on track to complete legislative reforms this month to qualify for euro zone bank recapitalization funds in November.

In Russia, 1/6 of privately owned banks have closed in the last two years, with the national economy slowed by low oil prices and isolationist politics. B&N Bank, gambling that the economy turns around soon, has become the fifth largest bank by buying up seven of its competitors so far. With its latest acquisitions, B&N may now be large enough to be considered too big to fail.

The specter of bank failure returned to Georgia tonight with state regulators closing The Bank of Georgia, with 7 locations southwest of Atlanta and a quarter billion dollars in deposits. Fidelity Bank is taking over the deposits and purchasing all but a few of the assets. The failed bank had specialized in real estate loans.

In the opposite corner of the country a much smaller bank failed. Hometown National Bank in Longview, Washington had less than $5 million in deposits. Twin City Bank is taking over the deposits and purchasing most of the assets.

A Narrow Window for Hits

Now that Apple Music’s 90-day free trial phase is winding down, can you name the big hit songs of the last few months?

If you’re like most music fans, you can’t name more than one or two new hits released during the last quarter. You probably recognize several of the new songs when you hear them, but don’t know them well enough to rattle off a list of titles. The well-publicized launch of Apple Music had a chilling effect on new releases, with many held back so they wouldn’t cross paths with the free trial period. This happened even though Apple decided at the last minute to pay royalties during the trial period. There may be a flurry of memorable songs in the next five weeks, as recording artists and record companies try to fit their potential hits in the narrow window between the Apple Music trial period and the Christmas music season. Timing of product releases has always been a tricky question, but it is rare that the timing of record releases becomes so constrained. It shows, at least, how much impact institutional changes can have on the publicity efforts of musicians.