tflint, Author at ��ӽ� Business School AI Institute

Will machine learning make you a better manager?

tflint — Fri, 27 Apr 2018 15:39:36 +0000

This post was originally published by Michael Blanding for .

Thirty years ago, the idea of a machine learning on its own would have stoked the worst kind of sci-fi nightmares about robots taking over the planet. These days, machine learning is so commonplace, we barely notice it. Computers routinely learn what we watch on TV, what we buy, how we talk, and even how we feel—and use that to make predictions about how we’ll act next.

As the field of machine learning (ML) has become increasingly mainstream, says ��ӽ� Business School doctoral student , it has evolved into the reach of everyday companies, who are increasingly using ML to manage many aspects of their business operations.

“There’s been an explosion,” Teodorescu says. “It’s becoming less of a field in itself and more and more of a tool for people in other fields to use.”

In a , Teodorescu surveys the latest methods of machine learning from a technical standpoint. But, you don’t have to understand how exactly machine learning works in order to utilize it. In simplest terms, machine learning is a combination of fields, including statistics, computer science, and information retrieval, that teaches computers to recognize patterns that enable them to predict new patterns for the future.

”WE ARE IN A NEW INDUSTRIAL REVOLUTION LED BY ALGORITHMS”

We have all seen the process in action, whether it’s Amazon telling us we “may also like” to buy an Instant Pot programmable pressure cooker, or Netflix suggesting we should really think about binge-watching The Good Place.

“You look for prior patterns and use them to discover what the future may hold,” says Teodorescu.

As algorithms have become increasingly advanced, they may start knowing us better than we know ourselves. At least, that’s what when he angrily stormed into a store clutching a circular for maternity clothes that had been sent to his teenage daughter, only to later find out that the store had accurately predicted she was pregnant.

Such examples represent a cautionary tale for retailers. On the one hand, they want to take advantage of moments like a first pregnancy when customers are liable to be changing their buying patterns. On the other hand, they need to weigh the invasiveness of such predictions with customers’ need for privacy. “That’s one example of where a company might receive blowback for an algorithm being too good,” says Teodorescu.

Much of the earliest applications of machine learning concerned language. At the birth of the field in the 1940s, British mathematician Alan Turing conceived the abstract grammars to analyze texts and describe reasoning. Since then, the field of textual analysis had burgeoned to the point where analysts can “fingerprint” particular authors by the probability of how they use connecting words like “the,” “and,” and “that.”

More recently, machine learning has moved into the realm of detecting emotion by examining the probability of certain words appearing close to each other according to a person’s mood. “The really hot topic in the field is sentiment analysis,” says Teodorescu. In fact, it’s become increasingly common for companies to monitor their brand image through what customers say about them online—looking for trends of positive or negative keywords.

You don’t have to be, say, United Airlines to take advantage of these tools. Managers can now purchase off-the-shelf products that can mine Twitter or Yelp and develop a detailed analysis of how sentiment is changing in real time. “It has basically reduced the barrier between those who can afford to keep data programmers on staff and everyone else.”

Where we are going next?

The next step in sentiment analysis, says Teodorescu, is into consumer products.

“In the next five years, this will be available in your Fidelity account,” Teodorescu predicts, “so you can check the news today about a particular stock and see if it is positive or negative.”

Finance is another field in which Teodorescu predicts that machine learning will become more common, as banks and financial companies will use data about how customers use money to predict future patterns. “If you are a credit card processor and you have everyone’s transactions, you could predict whether a particular customer is going to run themselves into debt and default in the future.”

Machine learning is even being used to learn more about machines, says Teodorescu, who points out that manufacturers are increasingly using algorithms for preventive maintenance.

“You can predict when things are going to break down based on prior performance,” Teodorescu says. “That could preempt costly assembly line shutdowns later.”

In all of these ways, it’s clear that while machines may not be taking over the world any time soon, machine learning certainly is. “It will become less and less a mysterious thing and more of a regular topic taught in schools in 20 years,” says Teodorescu. “It will be something everyone learns.”

For business, data science capabilities will become a source of competitive advantage in more and more industries. “Firms should invest in data collection and storage capabilities as well as data analysis people,” says Teodorescu. “Detecting which customers or employees are about to jump ship, how to maximize effectiveness for every dollar of advertising spent, and how to make best use of existing tools and resources within the firm will all rely on data science capabilities.”

In short, to be competitive next decade, most companies should be thinking today about investing in data-driven technologies such as data analytics, machine learning, and Internet of Things.

“I expect big data to become ubiquitous in the next decade; those who do not invest in it now will be left behind,” he says. “We are in a new industrial revolution led by algorithms.”

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Technology innovation abounds, but what does it really mean for us all?

tflint — Thu, 15 Feb 2018 15:04:59 +0000

This post was originally published by Janet Balis on .

offered yet another year of technological innovation – ranging from expected to unprecedented. There is no shortage of articles, videos and blogs highlighting the most exciting themes and trends from the event: connected consumer experiences, voice interfaces, robotics, 5G, and more (all underpinned by ubiquitous ). And, unfortunately those words are almost used so often as to become cliché.

So, the question is: what are the meaningful implications of technology innovation?

Digital technologies are not in and of themselves the end point – they are the enablers of a connected future. And, in order to contemplate how they transform our human experiences and our business models, we must challenge ourselves to ask better questions. In doing so, we are more intellectually humble and honest in the face of an exciting but undefined future. A few questions we can ask:

Connected consumer experiences.

Across almost every major consumer-facing electronics manufacturer, the goal is essentially the same: to connect consumer experiences seamlessly. Past years at CES revealed point solutions which were best-in-class for that moment: flatter, higher resolution screens; wearable health trackers; electric “connected” toothbrushes – all individual devices connected to the Internet. But this moment connects them to each other – camera-enabled doorbells to kitchen appliances to entertainment systems to smart speakers – to create streamlined ecosystems for consumers in their homes and lives.

How does a consumer navigate seamlessly across those individual ecosystems?
Are consumers and businesses prepared to protect themselves sufficiently against privacy threats that increasingly target the capture of personal details and data?
If each ecosystem begins to know us through our data, how portable is our data when we want to move between or across different ecosystems?

Frictionless interfaces.

Today the form factor of the interface of many technologies is itself still uncomfortable and awkward in the face of true human behaviors. We hold small rectangles to our ears to speak on phones. We enter most words into digital technologies by typing – on either a physical or digital keyboard. We explore the new excitement of VR often strapping large viewing devices to our heads. But clearly, natural language processing advancements and voice interfaces are beginning to remove friction from how we communicate our human needs to digital technologies.

How quickly will natural language processing make the promise of voice-activated assistants exceed our expectations?
What are the cultural norms we set with the often female voices that are the default settings of so many of the digital assistants?
How quickly does the smooth nature of the interface accelerate the relationship between branded content experiences and commerce?

Robotics.

The combined impact of remarkable engineering and design with the power of data, AI and advanced software allow physical robots to increasingly move more naturally and operate more intuitively. From robotic pet dogs to therapeutic robots, technology is enabling a range of new entertainment, learning and emotional support experiences.

Are we prepared to conceptualize our homes or workplaces inclusive of robots as we begin to complement our communities of humans?
Are we prepared for the societal implications that arise when we co-mingle humans and robots seamlessly in our lives, such as having a robotic “nanny” assist with childcare?
Can robots solve dramatically important challenges around health and safety and reduce the cost to care for people who need it most (e.g. the aging)?

5G.

A world with significantly greater wireless bandwidth capacity is not being discussed as an “if” but a “when”. 5G unlocks the value of connecting physical and digital environments. More bandwidth delivers the promise of autonomous vehicles and smarter cities, the true promise of IoT, dramatically faster video delivery, and connecting cars to roadways, all of which accelerate the volume of data created and analyzed exponentially.

How much variance will there be in 5G availability across a global or regional footprint?
What level of investment is required to create the 5G infrastructure? When will that capital be invested?
At what point does wireless bandwidth compete legitimately against tethered bandwidth? In other words, at what point does wireless potentially cannibalize cable- or satellite-provided Internet connectivity?

The future will increasingly require us not only to appreciate the new features of innovative technologies, but also to challenge ourselves around the critical implications of how those innovations come together – in our lives as consumers, for businesses, within industries and across them. The dialogue only gets more interesting as these new opportunities unfold.

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Do Bitcoin and digital currency have a future?

tflint — Wed, 20 Dec 2017 15:01:42 +0000

This post was originally published by Professor Emeritus James Haskett for .

How Will Digital Currencies Be Regulated?

Blockchain technology has a brighter future than most digital currencies in general and Bitcoin in particular, judging from responses to this month’s column. It’s also clear that a discussion of this subject can reach far beyond the confines of the original question, involving us in a debate about central banking systems.

Supporters of the notion of digital currencies included Hamad Sheikh, who pointed out that “Digital currency is here to stay, simply because it does not require middle men or local regulatory bodies to hinder its transnational efficiency.” Farah commented, “Bitcoins are useful for trading currencies internationally … seamlessly in real time—something current banks lack …” According to Kueth Duany, they are “proving to be another interesting asset class to store value…”

Jerry Hurlihy suggested a specific use of the asset class when he observed that a possible use of Bitcoin could be “hedge funds betting on sovereign debt defaults.” Charles Sabatier III added that Bitcoin is the most secure financial network in the world. “The infrastructure that processes transactions is globally distributed and not prone to attack.” He goes on to suggest that it is likely that a nation that is recovering from terrible leadership will decide to adopt a cryptocurrency instead of relying on a central banking system.” This might appeal to respondents like Shann Turnbull, who commented central banking is but a specialized form of central planning. “A change from the current insane, superstitious, or religious belief in official money may occur sooner than expected.”

Xingang, on the other hand, worried that digital currencies are instruments that are “not yet properly regulated, meaning (they) could be used for market manipulation (and) used as payment method for online crime.” Bitcoin does not have a future as a currency, Turnbull said, because of the cost of operating sufficient computers to collectively document every single transaction. “When (digital) mining becomes too expensive the system will freeze up.” David Wittenburg, from his vantage point as a “former numismatist,” suggested that such currencies “arise in times of need (e.g., tokens when official currency is scarce) and they disappear when government offers a better alternative.”

Many agreed with Dan Shypua that “the block-chain technology underpinning Bitcoin is the important part of the story. This technology will transform many aspects of life in a positive way.” Prithwis Mukerjee suggested that this is already happening in a “scheme to simplify the payment of GST in India.” Michael Darmody added, “of greater interest to me is the blockchain distributed ledger, which will enable secure transactions, higher efficiency, and reduce the need for middlemen that add limited value.”

Perhaps the most interesting question that emerged from the discussion had to do with regulation. As Charles Sabatier III said, “With the entire network distributed globally, it is tough to regulate.” Hamad Sheikh asked, “the greater question should be, how will we regulate it and who will pay for its regulation?”

How will digital currencies be regulated? What do you think?

Original Column

Jamie Dimon, CEO of JP Morgan Chase, recently labeled the leading digital currency, Bitcoin, a “fraud,” likening it to the 17th century tulip bulb mania and adding that he would But on October 2, the Wall Street Journal reported that rival Goldman Sachs is considering trading in cryptocurrencies, potentially the first Wall Street firm to do so.

For me, the jury is still out. Here’s why.

Back in the 1960s, I partnered with a commodities broker at the then-existent Hayden, Stone brokerage firm to form the Comsec Fund, a mutual fund that could trade commodities as well as other securities. I provided a statistical trading system; he handled administration and sales. Hedging was an important feature of the fund, since trading in commodities requires frequent short selling of commodities contracts. Registering the fund with the Securities and Exchange Commission was difficult and time-consuming. We had to persuade staff members that hedging both securities and commodities contracts was an acceptable investment strategy and not mere speculation. Eventually, we succeeded in registering with the SEC and 37 US states before piling up legal debts that were so large that we had to find a buyer, in our case a financial services company, to bail us out.

The experience could have soured me on the entire notion of hedge funds. But of course hedge funds later came into vogue, prompting the growth and development of an entire hedge fund industry. If anything, the experience left me more open-minded than ever about innovative financial endeavors. So that brings me to the subject of digital money or “cryptocurrency,” a form of encrypted digital money.

How should we think about the future of a currency that is manufactured (“mined”) and priced in the private economy (as opposed to being minted on a controlled basis by governments) through an innovative, supposedly secure, and secretive system of digital codes that enables owners of the currency to complete transactions off the books and out of the sight of government regulators?

The number of such currencies are multiplying quickly for use in various ways. Some are being accepted by a limited number of buyers and sellers as tender for transacting business. They are now even being created as funding devices (ICOs or initial coin offerings) by companies avoiding more public IPOs (initial public offerings). The companies simply create and sell tradable digital currencies that can be used to purchase future goods or services offered by the startup, possibly on more favorable terms than in the real market. According to one report, 140 startups have raised over $2 billion in this manner so far this year. In one case, $35 million was raised in less than 30 seconds.

“IN ONE CASE, $35 MILLION WAS RAISED IN LESS THAN 30 SECONDS”

The most highly developed of the digital currencies is , the product of an ingenious and secretive tech programmer who developed a complex algorithm for “mining” the currency and tracking its ownership on computers located around the world using

It can be used for currency speculation, with the value of a Bitcoin fluctuating at least as wildly on digital currency exchanges as the commodities we used to trade; over the past 90 days, the value of a Bitcoin fluctuated over a range of $1,900 to $4,700. But more than 100,000 organizations accept it in transactions. ATMs installed by Bitcoin exchanges to process transactions recently could be found in more than 150 US locations. Hackers recently demanded it in payment for the “service” of having one’s frozen computer files restored. (Just as with commerce around pornography in the early days of the internet, digital currencies seem to attract some people operating on or beyond the edge of legality.)

Bitcoin is mined in “farms” that, according to one description, “verify other users’ transactions by solving complex mathematical puzzles,” receiving Bitcoins as payment for their services. Today, the largest “miner” of Bitcoins is a factory containing 25,000 computers and serviced on a 24/7 basis by 50 employees in Dallad Banner in Inner Mongolia, China. In fact, more than two-thirds of the currency is mined and much of it is traded on exchanges in China. Nervous Chinese leaders have threatened to shut down the exchanges, causing the value of the currency to drop about 30 percent instantly. As comedians often ask, “What could possibly go wrong?”

But the same question could probably have been asked about our little mutual fund that engaged in hedging. (We weren’t even clever enough to call it a “hedge fund.”) Hence my question. What’s the future of digital currency? What do you think?

P.S. Everything turned out well for the two of us. My partner went on to found, develop, maintain majority ownership in, and eventually sell the third largest discount brokerage organization in the United States. I was even more fortunate; I was able to return to the faculty at ��ӽ� Business School.

References:

Cao Li and Giulia Marchi, The New York Times, September 14, 2017, pp. B1 and B3.

The Associated Press, “Bitcoin facing wave of doubt,” Sarasota Herald-Tribune, September 16, 2017, pp. D1 and D4.

Kevin Roose, The New York Times, September 16, 2017, pp. B1 and B3.

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Good, bad; pros, cons – ICOs are certainly giving the finance world a lot to talk about

tflint — Mon, 18 Dec 2017 21:50:27 +0000

Initial coin offerings: welcome to the Wild West of financing. ICOs, a tactic that allows new cryptocurrencies to fundraise while avoiding the typical rigorous regulations associated with capital-raising, have taken off in a serious way in the last year. While VC firms have historically been reticent to jump on the ICO bandwagon, in 2017 that began to change due in part to the massive returns that cryptocurrency have seen in the last couple years. Take a deeper look at the current state of venture capital interest in ICOs with this timely article from ��ӽ� Business Review.

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Why millennials flock to fintech for personal investing

tflint — Mon, 18 Dec 2017 16:56:18 +0000

This post was originally published by Michael Blanding for .

Millennials are a disruptive bunch. The first generation to grow up with the internet, consumers born after 1980 are used to relying on technology and engineering to do almost everything—including shopping (Amazon), listening to music (Spotify), communicating with friends (social media), and hailing a cab (Uber).

It seems as if millennials would prefer to avoid face-to-face business interactions when there exists a more efficient way of getting what they want accomplished.

“HAVING GONE THROUGH THE GREAT RECESSION, THEY TEND TO BE MORE CONSERVATIVE WITH THEIR MONEY. THEY ARE GOING TO BE THE ASSET ACCUMULATORS OF THE FUTURE”

A new breed of financial technology companies, known collectively as fintech, has taken advantage of these traits to disrupt an unexpected industry: personal investing. Just as manufacturing companies have replaced assembly line workers with robots, these companies have replaced financial advisors with robo-advisors, which use big data and algorithms to determine the best places to put clients’ money—and appeal to a whole new generation of investors.

Technology replaces the financial advisor

“They have a firm belief that the insights of modern technology can be competitive with someone who is personally advising you, and at a fraction of the cost,” says Luis Viceira, George E. Bates Professor and Senior Associate Dean for International Development at ��ӽ� Business School. Viceira explores this phenomenon in the recent HBS case, .

Traditional financial advisors cater to baby boomers with substantial savings, requiring minimum amounts for investment upwards of $100,000 to access their services. By contrast, industry-leading and similar firms such as , Vanguard Personal Advisor, and have tapped into an underserved market by allowing clients to invest as little as $5,000. Wealthfront doesn’t even charge a fee for assets of less than $10,000—and even after that charges a 0.25 percent fee, as opposed to fees of 2 to 3 percent by traditional firms.

The reason Wealthfront is able to do that, says Viceira, is by keeping costs low. Traditional financial advisors are all about establishing a personal relationship with their clients, understanding their financial situation and walking them through their options. By pursuing a “one-size-fits-all” approach to investing, robo-advisors can eliminate a huge amount of operating costs.

“They have a phone number and an email for customer service, and that’s about it,” says Viceira. “The main way they communicate with customers is through a blog.”

Secondly, much of the cost for traditional financial advisors comes from client acquisition—chasing down leads and making personal visits with potential clients. They also spend considerable resources in traditional marketing, especially the large firms. Those setup costs must be recovered over time through fees. Wealthfront keeps those costs low by finding clients through social media—either through direct ads or referrals by early adopters who post about their services. “Their way to capture clients is through viral acquisition,” says Viceira.

Lastly, fintech firms save costs by outsourcing money management expertise to technology rather than to experienced money managers. “They come from the culture of the Silicon Valley, which is a culture of believing in engineering as a way of solving consumer problems,” says Viceira.

Millennials meet the robo-advisor

That’s where millennials come in. This cohort is ideal for a robo-advisor firm in many ways—first and foremost, because they have faith in the power of technology to solve their problems. (In fact, the Occupy Wall Street generation may be more likely to trust a fintech company than a big New York banking firm.) Moreover, millennials are heavy users of social media, and apt to recommend services they enjoy to their contacts.

Studies also show millennials are financially responsible, with , the highest rate of savings of any current generation.

“Having gone through the Great Recession, they tend to be more conservative with their money,” says Viceira. That means that they have been accumulating savings, even if they are not yet large enough to be served by traditional brokers. “They are going to be the asset accumulators of the future.”

Lastly, millennials show a “set it and forget it” attitude towards money management, desiring to delegate the responsibility elsewhere so they have more time for their passions, whether that’s their careers, hobbies, or travel.

Despite the big differences in operations, the investment strategy Wealthfront pursues is not dissimilar from a mainstream financial investor. Its portfolio emphasizes a diversification of assets, managed through a portfolio of exchange-traded funds (ETF’s) that track market indexes. “It’s a great way to invest cheaply in a diversified basket of stocks, bonds, and other securities,” says Viceira.

If anything, Wealthfront’s offering is more diversified than typical balanced mutual funds, with 11 categories of investments, including global stocks, corporate and municipal bonds, real estate, natural resources, and treasury bonds. The fund also automatically rebalances itself over time just as mainstream financial advisors and brokers do for their clients—if for example, stocks do very well over a period of time relative to other asset classes and become too large a percentage of the portfolio, the robo-advisor automatically reinvests in the other asset classes to control investment risk, frequently through the reinvestment of stock dividends or the investment of new contributions.

Financial copy cats move in

Most of the strategy Wealthfront pursues is identical for each client; however, it does provide some amount of individual customization through a process known as tax-loss harvesting and asset allocations tailored to the tax status of the client. For example, tax-loss harvesting aims at realizing capital losses that help offset realized capital gains to reduce the amount of capital gains tax paid. Capital gains are computed based on when each individual made contributions to her account and in this sense efficient tax loss harvesting requires customization.

The strategy Wealthfront has pursued has resulted in growth of assets under management from $100 million to by September 2016, placing it in the top 100 independent registered investment advisors in the United States. Their diversified portfolios have outperformed the S&P 500 by 40 percent on a risk-adjusted basis. (There have been challenges, too. CEO Adam Nash , replaced by founder Andy Rachleff returning as CEO. Nash retained his seat on the board of directors.)

But regardless of their growth, Viceira argues that perhaps the biggest indication of the success of these firms is the fact that mainstream investment firms have decreased their fees and added their own robo-funds with lower minimum asset amounts in an effort to compete directly with Wealthfront and its ilk.

“They have been clearly disruptive. Most of the big brokers, such as Vanguard and Schwab, have seen that there is a way to address this segment of the market, and developed similar offerings,” says Viceira. “That’s brought this to the attention of not just millennials who have thousands of dollars to invest, but also Gen-Xers who have tens of thousands.”

The bigger issue is whether, as millennials get older and develop more sophisticated investing, tax and estate planning needs, firms like Wealthfront will continue to keep them as customers, or lose them to more traditional firms.

“They are hoping that as millennials grow, the technology will grow with them to continue to offer sophisticated portfolio advice with technological solutions,” says Viceira. “Whether that will happen or not is an open question.”

If it does, then expect more disruption in the financial advising industry in the next generation.

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How Consumer Brands Can Connect with Customers in a Changing Retail Landscape

tflint — Wed, 29 Nov 2017 00:08:16 +0000

“The online world is tough for brands to influence. But brick-and-mortar retail doors are closing, especially for apparel, as shoppers take their business online. In this environment, a failure to think digitally may have the most dire consequences of all.”

This article from HBR takes a look at how retail brands are leading the change in the digital landscape and distills their experiences into 7 distinct strategies for orgs to follow. Wherever a company is at in their digital transformation, these insights offer some important reminders for compelling ways brands can engage with customers in the digital age.

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Analytics for an Online Retailer: Demand Forecasting and Price Optimization

tflint — Tue, 28 Nov 2017 22:09:26 +0000

How does an online flash sales company like Rue La La determine pricing for an ever-rotating selection of products it has never sold before? In this powerful research, Kris Johnson Ferreira (HBS), Bin Hong Alex Lee (MIT), and David Simchi-Levi (MIT) use machine learning to predict future demand for new products, including those that are new to Rue La La’s inventory. Using data analytics and machine learning, the researchers were able to increase revenue by almost 10%, making this a must-read article for any retailer looking to leverage the power of analytics and algorithms to impact their bottom line.

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The new normal: luxury in the secondary market

tflint — Tue, 28 Nov 2017 21:29:24 +0000

You likely see these everywhere you turn. Television commercials boasting new apps to sell your unwanted belongings online and advertisements on billboards and posters informing you of gently-used clothing stores. Undoubtedly the secondary market, to both buy and sell pre-owned items, has grown exponentially since the recession – and with consumers becoming increasingly more fashion-conscious and digitally savvy the luxury market has been no exception to this trend. More and more options continue to pop-up in the second-hand luxury sector.

But why the big boom? It’s the secondary market that is changing how consumers shop luxury. “Secondary Behavior” is something customers are moving towards in many forms – from reusing, to repairing, recycling, gifting and reselling – but that had been notably absent in the luxury goods space. Now luxury in the secondary market is one of the largest growing consumer segments, but the consignment concept has largely gone untouched since its inception in the 1900s.

There are only a few options to consider when selling pre-owned. One of the more prominent choices includes peer-to-peer marketplace services, where the reseller completes transactions directly with the buyer on a hosted platform – think eBay, Poshmark, and Tradesy. Peer-to-peer options are great when done right: the user interface is easy to navigate, sellers can list for any price they deem fit, and commission can range from 10% to 20%. However, the level of required consumer participation is high. Photographing, posting, and shipping products, not to mention pricing research and customer servicing require a level of commitment that is too much for some resellers.

On the next level there’s consignment, which originated as brick-and-mortar but has also transitioned into the e-commerce space in recent years. It’s a lot less of a time investment compared to peer-to-peer selling. There’s simplicity in having to only bring in the item, whether by shipping, dropping off in-store, or requesting a concierge service, and receiving a listing price upfront. Little research and effort is required by the seller as the consignment service will provide pricing, photographing, and customer servicing, but the trouble begins when it comes to actually selling the item and receiving payment. Commission fees vary depending on the item’s value (Vestiaire Collective’s commission begins at 25% while The RealReal may take up to 45%) and the seller will not be paid until the item actually sells. This leads to frustration over the uncertainty of the transaction, the volatility of prices, and the extensive duration of the process. All consumers love instant gratification, but most consignment shops miss the mark in this category.

Although there are services that provide upfront payment for lower-end items, such as ThredUp and brick-and-mortar retailers like Buffalo Exchange, there are few services that provide the same for high-valued luxury items. One of these services is , a platform exclusively for selling and buying pre-owned designer handbags. The platform offers a resale experience with a seller-first mindset that is all about immediacy and transparency. Rebag purchases the bags outright at fair market prices, which are calculated by the service’s highly-trained buying team, and the process itself is designed to be as easy and straightforward as possible; no consignment, no commission, no tricks. Sellers simply upload a few pictures to get a free quote and receive payment within 2-3 days of Rebag evaluating and approving the items. Buyers of pre-owned bags can feel safe knowing that they’re getting authentic designer goods at attractive prices.

Consumers are open to the Rebag concept and secondary behavior in general for a variety of reasons. Since the recession and with access to online resources, they have become highly-educated in the retail and resale space, and they know exactly what “value” means to them. Now bagaholics know they can purchase gently-used designer pieces for a fraction of the cost. But it’s not just about getting good deals. For younger generations – the mindful Millennials and Gen Z – environmental and social consciousness is important, which is what powers the secondary market. Buy, sell, repeat. This is the way to eliminate waste in the fashion industry and to reduce fashion’s environmental impact. With that said, there’s no longer a negative connotation associated with shopping pre-owned. Undoubtedly, consumers find a great deal of pride in getting the most out of their dollars, whether it’s by selling their unused bags which were collecting dust in their closets, or by finding a discontinued Chanel model that’s truly one-of-a-kind, and at an unbeatable price.

All signs point to the luxury resale market continuously growing to the benefit of all parties involved. In particular, the brands and department stores themselves are starting to realize the benefits of a liquid secondary market for luxury goods. Most sellers reinvest their resale earnings in purchases of new goods from the brands they love. The more conviction consumers have that these luxury goods are liquid, the more new goods they will buy. Many buyers of pre-owned luxury are also first time buyers who get to experience a new brand for the first time. From that perspective, these resale services are a customer acquisition channel for luxury brands and a veritable gateway for younger consumers to enter their brand experience.

The world of luxury resale is creating a new paradigm – a high-end product ecosystem that is a win-win for the entire industry: brands, department stores and of course the customers themselves.

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Toys ‘R’ Us Might Be Dying, but Physical Retail Isn’t

tflint — Tue, 28 Nov 2017 17:52:14 +0000

“The rise of e-commerce, combined with a shift in consumer preference toward dining out over shopping and with years of overbuilding, has made for distinctly unattractive economics in traditional retail.”

Take a look at the likes of Toys ‘R’ Us and you might be tempted to declare that the ‘Retail Apocalypse’ is coming for commerce. The continued closure of big box stores in recent years, however, isn’t so much about the death of retail as it is a story about legacy firms struggling to innovate in a changing economy. Greg Satell writing for the ��ӽ� Business Review explains.

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Why Retailers Should Retire Holiday Shopping Season

tflint — Tue, 28 Nov 2017 17:48:43 +0000

“The retail industry has been disrupted in practically every way imaginable. It’s about time that retailers also rethink their approach to the holiday shopping season.”

In this article for ��ӽ� Business Review, Denise Lee Yohn argues that the traditional holiday shopping super-sale model deserves some much needed revision. The ubiquitousness of information and the digital transformation of the economy have led costumers to demand more freedom over their shopping habits, and the boom and bust nature of the holiday season strains retailers’ ability to cope with enormous fluctuations in demand as well. Clearly, it’s time for a change.

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tflint, Author at ���ӽ� Business School AI Institute