Tuesday, March 5, 2013

Reuters: Small Business News: E-tailers embrace same-day delivery, but U.S. shoppers shrug: survey

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
E-tailers embrace same-day delivery, but U.S. shoppers shrug: survey
Mar 5th 2013, 15:13

A photograph of a computer screen showing the website eBay is shown here in Encinitas, California April 22, 2009. REUTERS/Mike Blake

A photograph of a computer screen showing the website eBay is shown here in Encinitas, California April 22, 2009.

Credit: Reuters/Mike Blake

By Alistair Barr

Tue Mar 5, 2013 10:13am EST

(Reuters) - Same-day delivery, one of the hottest e-commerce trends, is too expensive for most U.S. consumers, raising the risk that this turns into another online shopping fad that goes cold, according to a survey released on Tuesday.

The Boston Consulting Group recently asked 1,500 U.S. consumers what would get them to shop more online and only 9 percent cited same-day delivery. Almost three quarters said free delivery would do the trick, while half of the respondents said lower prices.

The consumers said they would pay $7.50, on average, to get a $50 online purchase delivered on the same day, the survey found. That is lower than the fees charged by most retailers and e-commerce companies now providing these services, the consulting firm noted.

Same-day delivery has become the latest retail battleground, with Wal-Mart Stores Inc, eBay Inc and several other big companies chasing Amazon.com Inc, which has been offering the service on selected items in certain cities since 2009.

Shutl, a startup backed by United Parcel Service, has offered same-day delivery in the UK for three years and will be launching the service in the U.S. in a few weeks.

The U.S. Postal Service and FedEx Corp each have recently started same-day delivery in some areas of the U.S.

But these players may find little room to make money because same-day delivery is destined to be a niche service, The Boston Consulting Group survey concluded.

"The demand for this service and the willingness to pay do not match the cost of providing it," said Rob Souza, a partner at The Boston Consulting Group, who worked on the survey and has advised companies on same-day delivery.

"We're pretty skeptical about the ability of a stand-alone business to make money from this," added Vladimir Lukic, a principal at the consulting firm, who also worked on the survey.

Urban shoppers aged 18 to 34 with household income over $150,000 a year - known as affluent millennials - are more interested in same-day delivery. But this group accounts for only 2 percent of the market, according to the consulting firm's report.

Consumers said they would only use same-day delivery in certain circumstances, like when they needed to buy a last-minute gift or couldn't get to a physical store, the survey found.

Retailers should only offer same-day delivery for a select number of products that are small, light, and carry high margins, such as electronics, office supplies, and apparel, but even for these items consumers do not usually want to pay extra to have them shipped swiftly, the report said.

All this means same-day delivery will be a niche service that retailers offer to build customer loyalty, or keep up with rivals, Souza explained.

(Reporting by Alistair Barr; Editing by Phil Berlowitz)

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Reuters: Small Business News: Small businesses cut borrowing in January

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Small businesses cut borrowing in January
Mar 5th 2013, 11:31

PayNet president and co-founder Bill Phelan speaks during the Thomson Reuters Manufacturing and Transportation Summit in Chicago May 10, 2010. REUTERS/Jeff Haynes

PayNet president and co-founder Bill Phelan speaks during the Thomson Reuters Manufacturing and Transportation Summit in Chicago May 10, 2010.

Credit: Reuters/Jeff Haynes

By Ann Saphir

Tue Mar 5, 2013 6:31am EST

(Reuters) - Borrowing by small businesses slid in January, a report on Tuesday showed, suggesting a cautiousness that bodes poorly for economic growth and job creation this year.

The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to small companies, fell to 113.1 from an upwardly revised 115.8 in December, PayNet said.

To coax the economy into higher gear, the Federal Reserve last September moved to push down long-term borrowing costs with a third round of asset purchases that it says it will continue until the outlook for the labor market improves substantially.

That stimulus, on top of rock-bottom short-term interest rates since December 2008, has failed so far to light a fire under smaller U.S. firms, the index shows.

"It's a play-it-safe kind of economy for small businesses," PayNet founder Bill Phelan said in an interview. "They are not getting pulled in by the cheap credit and extra money floating around. They are continuing to hold back in investment growth."

PayNet's lending index typically correlates to overall economic growth one or two quarters in the future. It also is highly correlated with future job growth, Phelan said, with moves in the index heralding the outlook for jobs 9 to 12 months in the future.

Borrowing was up 13 percent from a year earlier, the index showed, but still well below its pre-recession peak. PayNet had initially reported the December figure as 112.

Small businesses often drive new job creation after recessions.

But this recovery, with its stop-and-start nature, has been different. The U.S. economy is expected to grow about 2 percent this year, an improvement from the nearly flat economy of the last three months of the year, but still too slow to generate much decline in the unemployment rate, currently high at 7.9 percent.

Government belt-tightening, including the automatic $85 billion in spending cuts that went into effect last Friday, could slow growth further, economists have warned.

Separate PayNet data showed financial stress at near-record-low levels. Accounts overdue by 30 days fell to 1.18 percent of the total from 1.19 percent the previous month. While big companies failed last year at a rate of about 3 percent, failures among small companies were just half that, Phelan said.

Longer-term delinquency rates also eased. Accounts behind 180 days or more, which are considered in default and unlikely to be paid, dipped to 0.22 percent from 0.24 percent.

Accounts behind 90 days or more, or in severe delinquency, fell to 0.26 percent from 0.27 percent.

PayNet collects real-time loan information, such as originations and delinquencies, from more than 250 leading U.S. lenders.

(Editing by Chizu Nomiyama)

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Monday, March 4, 2013

Reuters: Small Business News: K-12 student database jazzes tech startups, spooks parents

Reuters: Small Business News
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K-12 student database jazzes tech startups, spooks parents
Mar 4th 2013, 17:25

A guard helps a student cross an intersection in Pelham, New York February 8, 2013. REUTERS/Adrees Latif

A guard helps a student cross an intersection in Pelham, New York February 8, 2013.

Credit: Reuters/Adrees Latif

By Stephanie Simon

Mon Mar 4, 2013 12:25pm EST

(Reuters) - An education technology conference this week in Austin, Texas, will clang with bells and whistles as startups eagerly show off their latest wares.

But the most influential new product may be the least flashy: a $100 million database built to chart the academic paths of public school students from kindergarten through high school.

In operation just three months, the database already holds files on millions of children identified by name, address and sometimes social security number. Learning disabilities are documented, test scores recorded, attendance noted. In some cases, the database tracks student hobbies, career goals, attitudes toward school - even homework completion.

Local education officials retain legal control over their students' information. But federal law allows them to share files in their portion of the database with private companies selling educational products and services.

Entrepreneurs can't wait.

"This is going to be a huge win for us," said Jeffrey Olen, a product manager at CompassLearning, which sells education software.

CompassLearning will join two dozen technology companies at this week's SXSWedu conference in demonstrating how they might mine the database to create custom products - educational games for students, lesson plans for teachers, progress reports for principals.

The database is a joint project of the Bill & Melinda Gates Foundation, which provided most of the funding, the Carnegie Corporation of New York and school officials from several states. Amplify Education, a division of Rupert Murdoch's News Corp, built the infrastructure over the past 18 months. When it was ready, the Gates Foundation turned the database over to a newly created nonprofit, inBloom Inc, which will run it.

States and school districts can choose whether they want to input their student records into the system; the service is free for now, though inBloom officials say they will likely start to charge fees in 2015. So far, seven states - Colorado, Delaware, Georgia, Illinois, Kentucky, North Carolina, and Massachusetts - have committed to enter data from select school districts. Louisiana and New York will be entering nearly all student records statewide.

"We look at personalized learning as the next big leap forward in education," said Brandon Williams, a director at the Illinois State Board of Education.

IF DATA LEAKS, WHAT REMEDIES?

Federal officials say the database project complies with privacy laws. Schools do not need parental consent to share student records with any "school official" who has a "legitimate educational interest," according to the Department of Education. The department defines "school official" to include private companies hired by the school, so long as they use the data only for the purposes spelled out in their contracts.

The database also gives school administrators full control over student files, so they could choose to share test scores with a vendor but withhold social security numbers or disability records.

That's hardly reassuring to many parents.

"Once this information gets out there, it's going to be abused. There's no doubt in my mind," said Jason France, a father of two in Louisiana.

While inBloom pledges to guard the data tightly, its own privacy policy states that it "cannot guarantee the security of the information stored ... or that the information will not be intercepted when it is being transmitted."

Parents from New York and Louisiana have written state officials in protest. So have the Massachusetts chapters of the American Civil Liberties Union and Parent-Teacher Association. If student records leak, are hacked or abused, "What are the remedies for parents?" asked Norman Siegel, a civil liberties attorney in New York who has been working with the protestors. "It's very troubling."

VENTURE CAPITAL MAGNET

Fans of the project respond that the files are safer in the database than scattered about school districts. Plus, they say, the potential upside is enormous, with the power to transform classrooms across the U.S.

Does Johnny have trouble converting decimals to fractions? The database will have recorded that - and may have recorded as well that he finds textbooks boring, adores animation and plays baseball after school. Personalized learning software can use that data to serve up a tailor-made math lesson, perhaps an animated game that uses baseball statistics to teach decimals.

Johnny's teacher can watch his development on a "dashboard" that uses bright graphics to map each of her students' progress on dozens, even hundreds, of discrete skills.

"You can start to see what's effective for each particular student," said Adria Moersen, a high school teacher in Colorado who has tested some of the new products.

The sector is undeniably hot; technology startups aimed at K-12 schools attracted more than $425 million in venture capital last year, according to the NewSchools Venture Fund, a nonprofit that focuses on the sector. The investment company GSV Advisors tracked 84 deals in the sector last year, up from 15 in 2007.

In addition to its $100 million investment in the database, the Gates Foundation has pledged $70 million in grants to schools and companies to develop personalized learning tools.

New products regularly come to market, but both educators and entrepreneurs say adoption has been slow because of technical hurdles.

WARNING SYSTEMS TO FORESTALL DROPOUTS?

Schools tend to store different bits of student information in different databases, often with different operating systems. That makes it clunky to integrate new learning apps into classrooms.

At the Rocketship chain of charter schools, for instance, administrators must manually update at least five databases to keep their education software running smoothly when a child transfers from one teacher to another, said Charlie Bufalino, a Rocketship executive.

The extra steps add expense, which limits how many apps a school can buy. And because the data is so fragmented, the private companies don't always get a robust picture of each student's academic performance, much less their personal characteristics.

The new database aims to wipe away those obstacles by integrating all student information - including data that may previously have been stored in paper files or teacher gradebooks - in a single, flexible platform.

Education technology companies can use the same platform to design their software, so their programs will hook into a rich trove of student data if a district or state authorizes access.

That prospect has some companies dreaming big.

Larry Berger, an executive at Amplify Education, says the data could be mined to develop "early warning systems." Perhaps it will turn out, for instance, that most high school dropouts began to struggle with math at age 8. If so, all future 8-year-olds fitting that pattern could be identified and given extra help.

Companies with access to the database will also be able to identify struggling teachers and pinpoint which concepts their students are failing to master. One startup that could benefit: BloomBoard, which sells schools professional development plans customized to each teacher.

The new database "is a godsend for us," said Jason Lange, the chief executive of BloomBoard. "It allows us to collect more data faster, quicker and cheaper."

Whether all this data, and all the programs that use it, will transform education is another question. Most data-driven software has only been tested on a small scale; results are often mixed.

Though he is bullish on the sector, Michael Moe, the chief investment officer at GSV Capital, cautions that there is as yet no proof the new technology will produce "game-changing outcomes" for students - or, for that matter, sterling profits for investors.

Others are more skeptical still.

"The hype in the tech press is that education is an engineering problem that can be fixed by technology," said Frank Catalano of Intrinsic Strategy, a consulting firm focused on education and technology. "To my mind, that's a very naive and destructive view."

(Reporting by Stephanie Simon; editing by Prudence Crowther)

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Reuters: Small Business News: From Hollywood to Kansas, drones are flying under the radar

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
From Hollywood to Kansas, drones are flying under the radar
Mar 4th 2013, 14:41

An onboard camera of a Draganflyer X6, six-rotor remote controlled helicopter which can fly up to 20 mph and travel up to a quarter mile away and 400 feet high, is pictured at the Grand Valley Model Airfield in Mesa County, Colorado on January 31, 2013. REUTERS/Chris Francescani

1 of 3. An onboard camera of a Draganflyer X6, six-rotor remote controlled helicopter which can fly up to 20 mph and travel up to a quarter mile away and 400 feet high, is pictured at the Grand Valley Model Airfield in Mesa County, Colorado on January 31, 2013.

Credit: Reuters/Chris Francescani

By Chris Francescani

NEW YORK | Mon Mar 4, 2013 9:41am EST

NEW YORK (Reuters) - They hover over Hollywood film sets and professional sports events. They track wildfires in Colorado, survey Kansas farm crops and vineyards in California. They inspect miles of industrial pipeline and monitor wildlife, river temperatures and volcanic activity.

They also locate marijuana fields, reconstruct crime scenes and spot illegal immigrants breaching U.S. borders.

Tens of thousands of domestic drones are zipping through U.S. skies, often flouting tight federal restrictions on drone use that require even the police and the military to get special permits.

Armed with streaming video, swivel cameras and infrared sensors, a new breed of high-tech domestic drones is beginning to change the way Americans see the world - and each other.

Powered by the latest microtechnology and driven by billions in defense industry and commercial research dollars, domestic drones are poised for widespread expansion into U.S. airspace once regulation catches up with reality.

That is scheduled to begin in late 2015, when the U.S. government starts issuing commercial drone permits.

Veteran aerial photographer Mark Bateson, a consultant to the film and television industry and some police departments, said one reality show producer asked him last year whether his custom-made drone could hover over a desert and use its thermal imaging sensors to spot ghosts for a ghost-hunter reality series.

Bateson rejected that request. "But I heard they eventually found someone to do it," he said.

"Commercially, the culture already exists," said Ben Miller, a Mesa County, Colorado, sheriff's deputy who has been flying drones with special authorization from the Federal Aviation Administration since 2009.

"Turn on your TV and pay close attention to major sports events. You'll see that in many cases they are getting aerial shots using a UAS (unmanned aerial system). I would venture to say that if you've seen an action movie in the last five years, chances are that a UAS was used."

OPEN SKIES

Federal legislation enacted last year requires the FAA to prepare a plan to open U.S. skies in 2015 to widespread use of unmanned aircraft by public agencies and private industry.

Potential markets include agriculture, shipping, oil exploration, commercial fishing, major league sports, film and television production, environmental monitoring, meteorological studies, law enforcement and the news media.

The aviation and aerospace industry research firm Teal Group estimated last year that global spending on unmanned aircraft will double over the next 10 years, to nearly $90 billion, with the U.S. accounting for 62 percent of research and development spending and 55 percent of procurement spending.

For decades, model airplane hobbyists have been allowed to fly small, remote-controlled aircraft up to 400 feet and at least a quarter mile from any airport. While public agencies can get permission to use unarmed drones, all commercial use remains banned.

"As a hobbyist - I can do whatever I want right now, within remote-control guidelines," said Bateson, the aerial photographer. "But as soon as you turn it into a business ... the FAA says you are violating the national airspace."

Bateson said that whether his drone shoots video for fun or for profit, "there is no greater danger to the national airspace."

Last year the National Football League petitioned the FAA to speed the licensing of commercial drones, joining Hollywood's Motion Picture Association of America, which has been lobbying the agency for several years, an MPAA spokesman told the drone news website UAS Vision.

The FAA has issued 1,428 drone permits to universities, law enforcement and other public agencies since 2007, when the agency formally banned commercial drone use. Of those, 327 permits remain active, said FAA spokesman Les Dorr.

TOUGH TO ENFORCE

Bateson flies a customized 48-inch-wide Styrofoam fixed-wing remote-controlled aircraft that cost about $20,000 - compared with up to $1 million for a helicopter. He said his aircraft has logged 1,800 miles and has recorded 60 hours of high-resolution video. He said he has never run into trouble with the FAA.

Patrick Egan, an unmanned aircraft consultant to the U.S. military and editor of sUAS News, a drone news website, said the FAA's commercial ban on drones is unenforceable.

"How do you possibly enforce these regulations?" he said.

Earlier this year, Connecticut marketing firm ImageMark Strategy and Design launched a drone-powered aerial photo and video service to offer to its existing clients, which include universities, golf resorts and real estate firms.

Partner Scott Benton said his company invested about $20,000 in remote-controlled multi-rotor copters equipped to carry camcorders or SLR digital cameras with swivel tilts. Benton said he wasn't even aware of FAA restrictions on commercial drone use until after he purchased all the equipment.

He said his company plans to charge clients for editing and post-production work, not the drone flights.

Many commercial drone operators offer similar arguments. Some say they operate only on private land. Others say they are selling data, not drone flight time.

Still others say they will simply take their chances.

"Honestly?" said one commercial operator, who requested anonymity to protect his business. "My hope is that I'm far afield enough and small enough potatoes to the FAA that I can fly under the radar on this one."

PRIVACY CONCERNS

In 2011, News Corp's tablet news site, the Daily, sent a Microdrone MD4-1000 into the skies over Alabama, Missouri and North Dakota to capture dramatic aerial footage of flood damage. A subsequent FAA investigation resulted in a warning, an FAA spokesman told Reuters. A News Corp spokesman declined to comment.

Last fall, a collective shudder rose up from Hollywood when false reports surfaced that the aggressive tabloid news website TMZ was seeking permission to fly its own drone.

The report was false, but it raised concerns.

"I'm less worried about the police getting a fleet of drones than I am about the news media," said Egan.

"Imagine what it will be like when the paparazzi can send a fleet of drones into the Hollywood hills."

The boom in drone use, both private and public, is also raising privacy concerns.

Civil liberties groups are urging federal and state legislators to place immediate restrictions on drone use by U.S. law enforcement agencies, which have historically been quick to capitalize on emerging technology like cell phone tracking.

At least 15 states have drafted legislation that would restrict drone use. In Seattle last month, a public outcry prompted the mayor to order the police chief to return the department's two new drones to their manufacturer.

BLACKSHEEP DRONES

An even bigger concern for many is security. The activities of some drone operators are fueling fears about the potential for terrorism or that drones could interfere with manned air traffic and cause an accident.

A group of skilled drone operators using "first person view," or FPV, technology, has sent Ritewing Zephyr drones that capture high-quality video of visual thrill rides around some of the world's most famous landmarks.

The group, known as Team Blacksheep, has made a series of videos using drones circling the torch on New York City's Statue of Liberty and London's Big Ben clock tower. Team Blacksheep's FPV drones have darted through the arches of the Golden Gate Bridge and buzzed the peak of the Matterhorn.

The videos, captured at dizzying angles, are wildly popular online, but hobbyists and other drone enthusiasts worry that such videos give the industry a bad name.

"Those are the people the FAA should be going after," Bateson said.

A Team Blacksheep founder did not respond to requests for comment on security concerns.

Would-be attackers have already tried to exploit drones. Last fall, a Massachusetts man was sentenced to 17 years in prison for plotting to attack Washington, D.C., with three remote-controlled airplanes carrying C-4 explosives.

Drones may also be vulnerable to hacking.

Last summer, Department of Homeland Security officials challenged Texas aerospace engineering professor Todd Humphreys and his class to try to "spoof" a DHS drone's GPS system.

GPS "spoofing" is a technique by which a vehicle's GPS receiver can be tricked and taken over by a slightly more powerful signal that mimics the attributes of the original signal - essentially an airborne hack.

Humphreys and his students succeeded in hacking the drone and took control of its flight path.

If a college class "can spoof the GPS, what can other nation states or terrorist groups do?" Representative Paul Broun (R-Ga.) asked at a recent congressional hearing on domestic drones.

CHINESE DOGS

Some U.S. drone designers worry about the consequences of what they see as a slow U.S. response to a rapidly evolving technology.

"The Chinese are going to kill us," said Texas pilot Gene Robinson, who spent $20,000 designing an innovative fixed-wing drone for search-and-rescue missions. "They have copied every single design, including mine, that they can get their hands on."

Robinson said he installed Web-tracking software on his drone design Web page and then watched last spring as a Chinese design company "spent a month on my Web page ... reverse-engineered my design" and began selling mass-produced copies in December - for $169.

Side-by-side pictures of Robinson's model and the Chinese model that he showed a reporter look virtually identical.

Robinson went online and ordered one of Chinese models - to see if he could attach his equipment to the cheaper version.

"It was a dog, a pig," he said. "It didn't fly worth a damn."

(Reporting By Chris Francescani; Editing by Claudia Parsons and Douglas Royalty)

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Reuters: Small Business News: What puts the Swiss in a "Swiss Made" watch?

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
What puts the Swiss in a "Swiss Made" watch?
Mar 4th 2013, 14:32

A visitor looks at watches on the Vacheron Constantin booth at the ''Salon International de la Haute Horlogerie'' SIHH exhibition at the Palexpo in Geneva January 21, 2013. REUTERS/Denis Balibouse

A visitor looks at watches on the Vacheron Constantin booth at the ''Salon International de la Haute Horlogerie'' SIHH exhibition at the Palexpo in Geneva January 21, 2013.

Credit: Reuters/Denis Balibouse

By Silke Koltrowitz

ZURICH | Mon Mar 4, 2013 9:32am EST

ZURICH (Reuters) - How much is the "Made in Switzerland" marque worth to consumers increasingly vigilant about the provenance of everything from what they eat to what they wear? The answer, luxury watchmakers say, is "a lot".

Protecting the label is essential to the industry's image, profitability and future growth, many luxury watchmakers say, and studies by St. Gallen and Zurich universities do show the tag can almost double a luxury watch's price.

But as with so many other products in a globalised world, there is a grey area around what makes a watch Swiss, and that lack of clarity has consequences for quality - and revenues.

The issue is part of proposed new legislation before Switzerland's parliament to regulate the use of the label for foods, services and industrial products.

With politicians and lobbying groups fighting over designations on products as diverse as cheese, pocket knives and textile machines, the chances for passage this year are dimming, however, and many watchmakers are growing anxious at the delay in solving what they see as an urgent problem.

"This law is (like the debate over) the Loch Ness monster," said Richard Mille, whose ultra-light watches are worn by tennis player Rafael Nadal.

"I'm not sure if there ever will be a solution."

In the first discussions in the two houses of parliament, the lower house has argued that 60 percent of the value of an industrial product must originate in Switzerland for it to be labeled "Made in Switzerland", in line with the draft law proposed by the government, while the upper house holds that 50 percent is sufficient.

If no compromise is found over the percentages and a myriad other issues, two more sets of debates may be held in each house over the next half year. If no agreement is reached, the bill fails.

Both versions are stricter than the 40-year-old "directive" currently governing the use of the "Swiss Made" stamp used for watches, which says at least 50 percent of the value of only the watch movements must be made in Switzerland.

This means cost-conscious watchmakers in the lower-priced segment can import 100 percent of the cases, dials, hands and straps and still mark their watches "Swiss Made" as long as half of the parts of the watch movement are made at home.

The directive also has little-to-no heft in international trade disputes, making it a blunt sword in the fight to protect the reputation of "Swiss Made", luxury watchmakers say.

"Thanks to current weak Swiss laws, watches produced almost entirely in China can be sold legally under the "Swiss Made" label," Jean-Daniel Pasche, chairman of the Swiss watch federation (FH), said in a telephone interview.

"This is going to harm the label over time as consumers nowadays want to know what they are buying. Some complain their Swiss watches are not as Swiss as they should be," he said.

Erich Mosset, head of movement maker Ronda, which makes some parts for its Swiss quartz movements in its factory in Thailand, said the new law meant a "massive tightening".

Stepping up pressure ahead of the next parliamentary debate on March 11, the Swiss watch federation announced last week it was leaving business lobby economiesuisse because of what it called its "lack of support" for the tighter rules, an unusual move in a country where consensus is the guiding principle of public life.

Economiesuisse decided only last year to back the 60-percent limit for the watch industry, which the federation said came too late to help them in their lobbying efforts.

CHEAP CHINA

The debate over how high to set the threshold is partly due to concerns that producing more in Switzerland, where salaries and prices are high, could hurt small and mid-sized firms' margins, already squeezed by a strong Swiss franc.

Some watchmakers agree.

Ronnie Bernheim, head of the maker of Switzerland's railway clocks, Mondaine, said a threshold as high as 60 percent could compel makers of lower-priced watches to buy cheaper components abroad.

"If you import a lower price component, also of lower quality, the Swiss percentage goes up ... Lower-quality products would qualify for 'Swiss Made'. It is paradoxical," said Bernheim, on behalf of some 25 watchmakers opposing stricter rules.

The trend is likely to be accelerated by a move by watch industry major Swatch Group to get out of the business of selling movements and movement parts to other watchmakers, which will compel some players to source more parts from Asia, at least in the short-term.

LVMH's biggest watch brand TAG Heuer has been one of the few to publicly admit buying movement parts from Japan's Seiko while stressing this would not hurt its "Swiss Made" image.

Buying less crucial watch components such as cases, straps and dials from Asia, mainly China, has been common practice for decades. While luxury players and big groups can afford to make these parts in Switzerland at a higher cost, smaller and mid-sized firms in the lower-priced segment cannot, said one Swiss movement maker who asked not to be named.

"You can find these components in a very good quality in Asia," he said. "They are not better if you make them in Switzerland."

JOBS AT STAKE

Mondaine's Bernheim said Switzerland would lose its competitiveness if it adopted rules that were too strict. But Pasche said the special reputation and value of Swiss watches justified tougher rules.

Italy voted tighter rules for applying the "Made in Italy" tag to clothes, footwear and leather goods in 2010, asking that two stages of manufacture should take place in Italy. But the new law is awaiting European regulation on the matter.

The European Commission has proposed origin labels for both EU-made and imported goods, defining the origin as the country in which the last major step in the production process occurred.

To better protect Swiss products abroad, the draft law proposes to extend an existing register for "geographical indications" for agricultural products to all goods.

Interested groups will be able to win certification that their products meet strict technical and aesthetic rules and have qualities unique to their location, for example "Geneva" for watches, and register a geographical trademark which will help defend its holder's rights abroad.

One of the first such geographical marking systems was France's "appellation d'origine controlee" (AOC) applied mostly to cheeses and wines.

"There are no such rules at the moment. This makes it very expensive and often impossible to take legal action against free riders abroad and have them punished," said Anja Herren of the Swiss federal institute of intellectual property (IGE).

Mondaine's Bernheim fears stricter rules will threaten his business and force him to cut jobs. But the watch federation says the rules will preserve jobs in the industry, which currently employs about 53,000 people, and make it impossible for foreign companies to buy watch firms for the "Swiss Made" label only to relocate production abroad.

Pasche says if parliament fails to pass the new laws, watchmakers will work on strengthening the industry directive, which it has held off doing while the legislation is debated.

Julien Marchenoir, brand equity and heritage director at Richemont's 260-year old Vacheron Constantin brand, said the "Swiss Made" label as well as the "Geneva hallmark" will help keep watchmaking knowhow in Switzerland.

"There are lots of different economic interests involved but people shouldn't be short-sighted."

(Additional reporting by Stephanie Nebehay in Geneva; Editing by Sonya Hepinstall)

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Reuters: Small Business News: Government objects to sale of Hostess assets to FBC Georgia

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Government objects to sale of Hostess assets to FBC Georgia
Mar 4th 2013, 14:41

Mon Mar 4, 2013 9:41am EST

(Reuters) - The U.S. government has objected to the proposed sale of about 20 bakeries owned by Hostess Brands Inc HTBRS.UL to FBC Georgia LLC, saying it frees the buyer of liabilities and limits the government's ability to regulate.

Hostess, known for its Twinkies snack cakes, decided late last year to go into liquidation and sell its assets, following a bakery union strike that paralyzed its operations.

The sale deal for 20 bakeries frees FBC from any present or future claim that may arise even out of standard labor, environmental and other laws, Preet Bharara, U.S. attorney for the Southern District of New York, said in an objection filed on Friday.

Late last month, Flowers Foods Inc (FLO.N) won an auction to buy Wonder Bread and some other brands while Mexico's Grupo Bimbo (BIMBOA.MX) won the Beefsteak bread brand.

The case is In re: Hostess Brands Inc et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.

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Friday, March 1, 2013

Reuters: Small Business News: Why retailers are pinning hopes on Pinterest

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Why retailers are pinning hopes on Pinterest
Mar 1st 2013, 14:58

People interact with a Pinterest app on a tablet device during a launch party, August 14, 2012. REUTERS/Pinterest/Handout

People interact with a Pinterest app on a tablet device during a launch party, August 14, 2012.

Credit: Reuters/Pinterest/Handout

By Beth Pinsker and Mitch Lipka

NEW YORK | Fri Mar 1, 2013 9:58am EST

NEW YORK (Reuters) - After a tough day at work as a publicist in Minneapolis, Becca Bijoch would often indulge in a little retail therapy. She usually headed out to the stores as she did not care much for online shopping.

That changed last year when the 26-year-old joined Pinterest, a photo-sharing website that allows users to "pin" images to online bulletin boards based on their interests and to follow others. Bijoch says she has found all sorts of things that she bought after seeing them on Pinterest, from great kitchen tools on CrateandBarrel.com to clothes at Asos.com.

"I'm probably spending more now. I'm on the couch at night, after having two glasses of wine," Bijoch says, but she has no regrets. "I tell everyone that Pinterest has changed my life."

Pinterest, which was the fastest standalone website to hit 10 million unique visitors a month, now has 25 million members, of whom many - like Bijoch - are young, female, well-educated and have disposable income.

Retailers are hankering after these users, but it is sometimes difficult to nab them because Pinterest is an ad-free website and "pins" flourish virally. While many retailers have learned how to interact with consumers on Facebook and Twitter, they are still struggling to figure out Pinterest and the ways to make money out of reaching shoppers through it.

In that effort, many retailers have installed Pinterest buttons on their main websites, created their own Pinterest pages, and allocated marketing dollars to acquire followers. While Pinterest says it does not track metrics internally, many ancillary businesses have popped up to help companies harness the revenue-driving possibilities of the site.

"It's a huge window-shopping platform," says Kyla Brennan, chief executive of HelloInsights, a Santa Monica, California company that provides analyses of Pinterest use. "It helps people find what they really like. Does it encourage people to be a little impulsive? Of course."

E-commerce experts say Pinterest generates more dollars per users than some other social media sites, even though Facebook, the world's largest social network with more than a billion users, is a leading driver of shopping by volume.

Pinterest shoppers, on average, spend nearly $170 per session, according to a study by RichRelevance, an e-commerce consultant, which tracked 700 million shopping sessions. In comparison, Facebook shoppers spend $95 per session, while Twitter shoppers spend $70.

Major retail brands with a presence on Pinterest include L.L. Bean, with more than 5 million followers; Nordstrom Inc, with more than 4 million followers; and Lululemon Athletica Inc with close to 2 million. Other major players like Gap Inc and Urban Outfitters Inc have fewer followers on the site, but are growing.

The three-year-old Pinterest recently closed a $200 million round of financing, which raises its value to $2.5 billion.

PINNING COSTS

Most companies' Pinterest activity is handled by their social media teams, but the efforts differ from promotions on Facebook and Twitter because Pinterest boards are interest-based and not timeline-based. Nordstrom's Facebook page, for example, features a couple of products daily that are on sale or seasonally interesting, but its Pinterest page is an evergreen collage of fashion lifestyle images.

As there is no direct advertising and Pinterest is still growing, the marketing cost to businesses of acquiring new users is lower than other sites, says Daniel Maloney, CEO of PinLeague, a consultancy that tracks social media usage.

"The current cost of acquiring a Pinterest follower is a penny to 50 cents, depending on type of business. That compares to 50 cents to $2.50 on Facebook," he said.

One of the top ways to reach followers seems to be to do anything but try to sell products. L.L. Bean's most popular board, for instance, is devoted to pictures of woodland creatures - its most popular pin is a picture of a cat dressed up to look like a bat.

"While we do measure traffic coming to llbean.com and llbeansignature.com from Pinterest, we are not currently promoting the platform as a selling channel," says Laurie Brooks, senior public relations representative for the company based in Freeport, Maine. Internal metrics show Pinterest users spend more than others, and that traffic is on the increase even if, overall, it is less than what comes from Facebook, she adds.

L.L. Bean, like many other retailers, has not offered discounts through Pinterest, but it has sponsored contests. So has Nordstrom, which did a bridal-focused sweepstakes in January.

"Our followers share and save compelling imagery and merchandise - period. Our boards aren't focused on bargains or coupons," says Bryan Galipeau, who is group manager of social media at Nordstrom's Seattle headquarters. "We think it's important to take a broader view of Pinterest because that's also how our customers see it."

Fashion retailer Gilt.com's "Pin to Win" contest offered a $2,500 shopping spree to women who shared certain images from their wedding dress collection. Gilt also rewarded those who received 50 re-pins of a children's dress the chance to buy the item for 77 percent off.

Similarly, fashion-seller Karmaloop.com offered a trip to Paris for the best outfit pinned to one of its boards.

Other goodies from retailers include AMC Theatres' giveaway pinboard where users can win movies posters and other memorabilia. Wal-Mart Stores Inc ran a contest about inspiring people to be environmentally conscious.

Even if you could win something by shopping through Pinterest, consumers need to exert some impulse control.

Since most of what is "pinned" on the site is aspirational, people can end up spending way more than when they click through from other social media sites.

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