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A brave new world in 2013

1st Nov 2012 , Phillip Nutt; Wenco

There will be new attitudes to globalisation

Phillip Nutt makes his predictions for 2013, and sees the West, at least, adopting different attitudes towards globalisation, manufacturing, brands and retailing. He also forecasts improved economic conditions.

I have a number of overseas contacts who follow the USA elections with as much fervour as we do in Canada as, like us, they see the problems of that ‘HOUSE’ as the eventual influencing problems of OUR houses.

It’s been a worrying three or four years for the United States and now. Just days after 'the election of all elections'is over and all that money has been spent, the real hero of the whole process is a gentle nerd mathematician, Nate Silver, who suffered all of the public vitriol that conservative media could throw at him to disgrace his views. It was Silver, and a few other such algorithm experts, who almost exactly predicted the outcome of the election while the many, many highly paid political pundits on both sides of the battle arena were made to eat crow. Having sung the praises of the humble statistician who could now so easily land an acting job on the highly popular nerd TV show, The Big Bang Theory, let’s take a look at what 2013 could mean for us from a global shoe perspective and the trends that I see that will emerge as a result of Obama`s winning for the second time.

Some of you might not agree with my views, but at least I hope to provoke debate among yourselves and get you to at least plan your own successful strategies for the coming seasons.

1/ A re-appraisal of the role of globalisation for the West

No-one, as a politician, has had the guts to come out and say that perhaps Globalisation, as first conceived, is not good for the Western populace and we have to refine what it should be in the near future. Only now are some high profile people beginning to send out messages that all is not well in the Garden of Eden!

The word ‘protectionism’ is only now being mentioned between clenched teeth.

2/ Bringing manufacturing back home

Localised politicians are bending over backward to recruit new business to large devastated old manufacturing bases. There are only so many redevelopment projects possible for turning old mill factories into luxury loft condos while foreclosure signs on middle class homes appear like flowers in the late spring. Politicians know that jobs are needed, and the old industries have gone offshore and the new industries are only R&D centres here, with limited staff and all the good stuff is also made offshore.

3/ Corporate national loyalties will be challenged

As I see it – and call me a socialist, even if it’s not factually true (but I have studied history at a street smart level) – while discount retailing as we know it really only developed as a concept in the late 1960s, it has matured now some 30-40 years later, with the resultant offshore resourcing having decimated our domestic manufacturing base.

To my way of thinking, the masses are now looking at the labels on products to see where the product is made. People are beginning to make a correlation between why so many are out of work and why so many behemoth discount retailing stores with their imported products dominate the scene.

I predict greater political action to force such giant, almost monopolistic, retailing structures to rethink their sourcing strategies or face the consequences of general consumer backlash in many different ways.

4/ A reassessment of legal practices

If one studies the corporate history of just USA shoe-related companies since the US Civil War, even when the domestic manufacturing base was getting off the ground in a big way, it was still a society of patent protection and legal actions to defend those patents. Companies merged and merged until they became so big they either faced bankruptcy because of overzealous financial extension with borrowed money or had to face monopoly charges and a forced break up.

My father would turn in his grave to hear that I make money out of tracing the origins of large Brands that were taken over so many times that no one bothered to keep the history of those companies – and now with this Vintage trend, so many are trying to find out who were their Fathers of Creation.

Nothing has changed with the US legal system. Even the Ivy League colleges teach courses on how to use the legal side to be a marketing tactic as well as a legal one.

Something has to be done to make the concept of patent protection workable, but above all easier and cheaper for start-up companies to protect themselves against giant bloodsucking corporations who know how to use the system for their benefit but not necessarily the creative system at large.

It strikes me that the existing patent system is more a negative towards true creativity than it is a benefit. Plagiarism is deliberate, alive and well – particularly with offshore sourcing – and a return to domestic production may help overcome this situation.

5/ A reorganisation of classic retailing direction

To my way of thinking everything in life is a cycle, from one extreme to the other extreme.

The first part of the 20th century saw the giants of retailing as the High Street department stores when most people didn’t have cars.

The latter part of the century saw such department stores being dragged to anchor shopping mall locations at major road and mass transit intersections. It is at these locations that they have become less and less relevant as their own branded suppliers have opened their stores in the same malls and offered better service and cleaner merchandise.

Now these same department stores are renting out floor space to other high profile vendors and becoming landlords and credit card bankers rather than Jack of all trades retailers.

Meanwhile even the discounters born of the late 60s have matured and are so dominant as a concept that their only weakness is their abundant loyalty to offshore cheap labour sourcing. I predict it will be that Achilles heel that will be gradually attacked by anti-globalization activists and unemployed masses.

The independents are also under attack as the big brands open their own ‘lifestyle’ stores.

Yes, life is a cycle, and retailing has come full circle after 100 years of very much the same old strategies.

6/ New directions, niches and applications are needed

Globalisation as a concept will never be allowed to die, but I do see governments forcing corporations to have more loyal values to their nation as well as their stockholders. Money will only be offered for investment for those who bring the jobs ‘in-house’.

I see new forms of venture capital being created that aren`t of the MBA business school ‘make a quick buck’ teachings. I see community trust ventures that support local entrepreneurs to bring business to their own communities instead of the vice versa of the past.

Social media have created a whole new product supply path. Retailing can be a virtual activity with start-up companies again using their garages as the initial warehouse facilities.

The new niche markets will only grow. Cross applications will produce new businesses – e.g. customised footwear is as applicable today for wellness needs as is one-of-a-kind status footwear.

Today I have more young people ask me about how to get into one-of-a-kind hand shoemaking than I do how to get a job with a major shoe company.

Yes, folks, the wheel of mass manufacture that started in the mid 1880s has returned to an interest in Luddite theories.

At the same time there is now more interest in vintage, turn of the 19th century product design than there is in futuristic 21st century design.

This is not, however, the time to give up. All I have tried to explain is that the circle of life is a fact and we do go through ups and downs brought upon us by socio-economic political factors that we have little control over except when we vote under well earned democratic rights.

It’s time to reflect on what an Obama victory now means to the West generally, and how our political leaders can read the tea leaves of what this left-of-centre victory means as to what we want from our society.

I see change, I see opportunity again. I think this last, tough economic period has brought out the best in all of us to rethink what we are capable of. I see thinks beginning to happen for the good in 2013.

So chill out, put on the Elton John/Tim Rice The Lion King on your IPad or CD and sing along with their rendition of The Circle Of Life. – Phillip Nutt [Email: wenco@rogers.com]

Phillip Nutt is the president of Wenco International Footwear Consultants, based in Canada. His intimate knowledge of South Africa comes from a fondly remembered stint with Bata SA in Pinetown. An outline of his services is available on his website, www.wenco.ca.

 

 

 

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