Mish's Global Economic Trend Analysis

Shop on Amazon by Taking Pictures of Items with New "Flow" App: Big Deal or Not?

Posted: 09 Feb 2014 06:05 PM PST

See an item in a grocery store or general merchandise store and want to add it to your shopping cart if Amazon has it cheaper? Amazon's new "Flow" app allows you to do just that.

MarketWatch reports You can now shop on Amazon by taking photos.

Amazon's app for iPhone this week added "Flow," an image recognition tool designed to allow consumers to add a product to their shopping cart by merely pointing their phone's camera at it.

Flow—as its name suggests—aims to make it as seamless as possible to shop. MarketWatch carried out its own "showrooming" with the app. Scanning a three-bottle package of the hair growth serum Rogaine, Flow immediately found the item on Amazon for $43.85, 30% cheaper than the $62.99 price in a Duane Reade store. Russell Stover Pecan Delights—a heart-shaped box of chocolates just in time for Valentine's Day—were $8.99 online, $1 cheaper than in Duane Reade. "This trend will take some time to grab hold," says retail analyst Jeff Green, "but it's an ingenious idea."

Flow can scan millions of items, according to Amazon, but it won't work with older iOS versions and it's not yet available on Android. The feature will replace "Snap It" as an image recognition search feature on the Amazon iPhone app (iOS7 and above). iOS5 and iOS6 customers will still be able to use Snap It for visual product recognition. "Scan It"—which just scans bar codes—remains unchanged. However, Amazon pitches Flow as something to use at home—rather than as a price-comparison tool in stores. "In some ways, Flow replaces the kitchen white board or chalk board where most families keep their growing list—only this way you don't accidentally forget the shampoo," the spokeswoman says.

Retail experts are divided over its usefulness. "This strikes me as the lazy man's shopping robot," says Edgar Dworsky, founder of ConsumerWorld.org. "If you can't even type in the name of the product, give me a break. Most people in a supermarket are not going to take a picture of a Cheerios box, and then leave the store to go to a competitor where it's 20 cents cheaper," he says. And it's not appropriate for big ticket items like TVs, he adds. It's rather gimmicky, according Rick Singer, CEO of GreatApps.com, but he still regards it as a good tool to compare prices at your local store to those on Amazon.

Big Deal or Not?

The CEOs of ConsumerWorld and GreatApps panned the idea. To be sure, few care if they can save a dime on a box of cheerios. But saving nearly $20 on Rogaine is very worthwhile.

Dworsky says it's not appropriate for big ticket items like TVs.

He is not looking far enough ahead. If it isn't appropriate now, it soon will be, perhaps incorporating the barcode features of "Scan-It".

Deflationary Pressures

It's easy to visualize where this technology is headed: An app where you click on a product and all the places where you can buy it turn up, complete with prices, Amazon, or wherever.

The price deflation pressures of such a device are immense. People like bargains, and if they think a store is not offering enough of them, they will shop elsewhere.

That's a big deal. And it will further pressure price margins across the board at all box retailers.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

French Airline Pilots Call Month Long Strike in May to Protest Law Prohibiting Pilot Strikes

Posted: 09 Feb 2014 10:55 AM PST

The French airline union, SNPL, has called for a month-long strike beginning in May. It's main objective is to repeal the Diard Law which limits the right of airline pilots to strike.

Via translation from Les Echos:

An unprecedented month-long strike is the motto launched today by SNPL, the main union of French airline pilots. SNPL calls for a national strike on May 3 to 30. The union gave a final warning to the government regarding several subjects of discontent, but the main target is the Diard law limiting the right to strike by cabin crew.

The Daird Law, passed in 2012 requires airline personal to individually declare strike intent at least 48 hours before the commencement of a strike. The law allows airlines to arrange for minimum service and avoid a buildup of stranded passengers at airports.

PATCO Solution

The way to deal with this strike is easy. France desperately needs something along the lines of Ronald Reagan's PATCO Play.

The Professional Air Traffic Controllers Organization or PATCO was a United States trade union which operated from 1968 until its decertification in 1981 following a strike which was broken by the Reagan Administration. The 1981 strike and defeat of PATCO has been called "one of the most important events in late twentieth century U.S. labor history.

On August 3, 1981 the union declared a strike, seeking better working conditions, better pay and a 32-hour workweek. In doing so, the union violated a law that banned strikes by government unions.

Ronald Reagan, declared the PATCO strike a "peril to national safety" and ordered them back to work under the terms of the Taft-Hartley Act of 1947. Only 1,300 of the nearly 13,000 controllers returned to work.

On August 5, following the PATCO workers refusal to return to work Reagan fired the 11,345 striking air traffic controllers who had ignored the order, and banned them from federal service for life (this ban was later rescinded by President Bill Clinton in 1993).

The proper response to any illegal strike in France, the US, or anywhere else, is to fire everyone involved.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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