U.S. Stores: Too Big, Boring and Expensive

❝ It’s easy to blame all of the industry’s woes on Amazon, the online giant. There’s little doubt that the fifth-largest U.S. company by market cap has been disrupting traditional retailers…But online is far from the only source of retail’s problems: The large chains, the malls they usually find themselves in, and even flagship urban stores have failed to adapt to rapidly changing consumer tastes. This lag has been readily apparent for more than a decade.

❝ Note that this is not the product of hindsight; during the financial crisis, it was clear to me that “retail shopping will emerge from the recession with a much smaller footprint than before.” In 2010, I reiterated those views, observing that “the United States still has too large of a retail footprint — 40 square feet of retail space for each person; that is the most per person in the world … that needs to come down appreciably.”

❝ My present views are even less optimistic. We are probably closer to the beginning of that transition than the end. This is a generational realignment in the way consumers spend their discretionary dollars, and the ramifications and economic dislocations are going to last for decades.

❝ The build cycle. One aspect of the “overstored” issue is the mismatch between retail trends and the construction cycle. Trends change much faster than permits can be issued, buildings constructed and subsequently rented. That lag can be consequential.

Look at the growth in big malls since the 1990s. Forbes notes that “since 1995, the number of shopping centers in the U.S. has grown by more than 23 percent and the total gross leasable area by almost 30 percent, while the population has grown by less than 14 percent.” All of the retail construction reflected a very ’90s shopping perspective, one that’s considerably different today. It is more than just the rise of the internet: Sport shopping, retail therapy, and conspicuous consumption offer less prestige today than they once did.

❝ Bor-ing!…The wild success of the nearly 500 Apple stores provides lessons for other retailers. At $5,546 in sales per square foot, Apple sells more goods at retail than any other store in the world. The same exact products can be purchased at Best Buy, at Amazon, or even Apple’s own website. Yet the company has hit upon a formula that sends more than 1 million visitors per day worldwide into their retail locations with money to spend. (Surveys have shown that putting an Apple store in a mall increases sales 10 percent for all the other retailers.)…

❝ One last issue: price. Thanks to “showrooming” — checking out stuff in stores only to buy online after finding out how much less it costs — consumers have learned how stiff mark-ups can be in retail. When customers believe they’re overpaying, it does not lend itself to repeat business…

❝ Those warnings about excess retail space are almost a decade old. If anything, the existential threat to the consumer retail industries are even more acute today.

Most of Barry Ritholtz’s writing gets onto this site – when I feel it fits – pretty quickly. Been saving this one for more than a couple of weeks. Reports the past few weeks continue to bear out everything in this piece he wrote for Bloomberg in March. The great Howard Davidowitz matches Barry’s analysis with even more colorful language and greater forecasts of doom for shopping center and mall anchor stores.

Keep your eyes open for bargains at “Going Out Of Business” sales!

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Apple, Facebook, Twitter and more say they won’t help Trump build a registry of Muslim-Americans

Twitter was the first big tech company to say it would refuse to hand over data to help the United States government build a registry President-elect Donald Trump has described that would be used specifically to track Muslim-Americans…

As of Friday, companies including Facebook, Apple, Google, IBM, Uber and Microsoft have all chimed in to likewise refuse to hand over data to help build a database that would profile Muslim-Americans…

❝ Trump’s potential plan to create a registry of Muslim-Americans was a topic that surfaced repeatedly on the campaign trail. And, unlike many of Trump’s campaign promises, this one may actually be on the table. Kansas Secretary of State Kris Kobach, a member of Trump’s transition team, said that after the election, Trump’s policy advisers began discussing a proposal to build the registry…

❝ Trump has promised to be heavy on surveillance, which has long required the cooperation of technology companies that collect user data to provide services and sell ads. Companies like Facebook, Twitter and Google get so many requests for user data from the government and law enforcement that they voluntarily publish regular transparency reports to detail, in broad figures, how these requests are made and fulfilled…

❝ Twitter, the one major tech company noticeably absent from Trump’s tech summit, has long had an anti-surveillance rule. Earlier this year, Twitter shut off access to at least two different companies that were providing surveillance services to U.S. law enforcement efforts.

Nice to see a number of money-making geeks still care about constitutional freedoms. Even even a few that our elected officials in Congress and the White House haven’t gotten round to explicitly codifying. Like privacy.

Apple, tech corporations, support Microsoft fight against gag order on federal snooping

❝ Microsoft has received the backing of Apple and other major technology, media and pharmaceutical companies in its legal fight to dislodge laws preventing it from informing customers of government requests for user data.

Apple was among a host of companies and corporate lobbies to file amici curiae, or friend of the court, briefs siding with Microsoft in its case to end gag orders targeting the release of government requests for data…

❝ In April, Microsoft lodged a lawsuit against the U.S. Justice Department, saying a government statute that allows the government to search or seize customer data without their knowledge is unconstitutional. The DOJ filed a motion to dismiss the suit in July…

These secrecy orders, Microsoft argues, violate the Fourth Amendment, which permits citizens and businesses the right to know of government searches or seizures of property. Microsoft is also having its First Amendment rights trampled on by not being afforded the opportunity to inform customers about the investigations…

❝ To increase transparency, Apple issues a biannual Report on Government Information Requests, with the latest release showing U.S. government data demands impacting nearly 5,200 accounts during the six-month period ending in April.

Uncle Sugar can’t continue to have it both ways. Our government blathers constantly about needing access to otherwise private information from individuals, organizations and businesses and, then, claim they need to have the process shrouded in secrecy for a number of crap reasons. Which usually ends up being “we need it – and that’s that!”

Feds claim Microsoft can’t shield user data from government

The U.S. says there’s no legal basis for the government to be required to tell Microsoft customers when it intercepts their e-mail.

The software giant’s lawsuit alleging that customers have a constitutional right to know if the government has searched or seized their property should be thrown out, the government said in a court filing. The U.S. said federal law allows it to obtain electronic communications without a warrant or without disclosure of a specific warrant if it would endanger an individual or an investigation.

Microsoft sued the Justice Department and Attorney General Loretta Lynch in April, escalating a feud with the U.S. over customer privacy and its ability to disclose what it’s asked to turn over to investigators…

The Justice Department’s reply Friday underscores the government’s willingness to fight back against tech companies it sees obstructing national security and [often bullshit] law enforcement investigations. Tensions remain high following a series of court confrontations between the FBI and Apple over whether the company could be compelled to help unlock iPhones in criminal probes…

The industry’s push against government intrusion into their customers’ private information began at least two years ago, in the wake of Edward Snowden’s disclosures about covert data collection that put them all on the defensive.

Microsoft and Apple argue the very future of mobile and cloud computing is at stake if customers can’t trust that their data will remain private, while investigators seek digital tools to help them fight increasingly sophisticated criminals and terrorists savvy at using technology to communicate and hide their tracks…

The government said Microsoft doesn’t have the authority to sue over whether its users’ constitutional protections against unlawful search and seizure are being violated…

Secrecy orders on government warrants for access to private e-mail accounts generally prohibit Microsoft from telling customers about the requests for lengthy or even unlimited periods, the company said when it sued. At the time, federal courts had issued almost 2,600 secrecy orders to Microsoft alone, and more than two-thirds had no fixed end date, cases the company can never tell customers about, even after an investigation is completed.

Our government does not recognize any individual right to privacy. Our government does not recognize any individual right to knowledge of the government investigating folks. Yeah, we can all come up with some unique circumstance when that might seem reasonable. Our government presumes a blanket privilege while denying any such right to ordinary citizens.

Not so incidentally, this isn’t especially a conservative vs liberal thing. There are a few of each in Establishment politics who will back up Americans’ right to privacy, right to know. Damned few.

The rest are silent.

Apple is producing so much clean solar energy, it formed a new company to sell the excess


Click to enlargeKatie Fehrenbacher
Apple’s solar farm next to its data center in Maiden, North Carolina

Apple has created a subsidiary to sell the excess electricity generated by its hundreds of megawatts of solar projects. The company, called Apple Energy LLC, filed a request with the Federal Energy Regulatory Commission to sell power on wholesale markets across the US.

The company has announced plans for 521 megawatts of solar projects globally. It’s using that clean energy to power all of its data centers, as well as most of its Apple Stores and corporate offices. In addition, it has other investments in hydroelectric, biogas, and geothermal power, and looks to purchase green energy off the grid when it can’t generate its own power. In all, Apple says it generates enough electricity to cover 93 percent of its energy usage worldwide.

But it’s possible that Apple is building power generation capacity that exceeds its needs in anticipation of future growth. In the meantime, selling off the excess helps recoup costs by selling to power companies at wholesale rates, which then gets sold onward to end customers.

Just in case you wondered why politicians deep into the pockets of fossil fuel thugs like the Koch Bros. also hate Apple with a passion. Like many high tech companies, Apple adopts modern solutions to basic business questions. Of course.

Obama and Congress back off on mandatory encryption bill


Burr and Feinstein continue to turn their backs on liberty and privacy

Draft legislation that could’ve forced U.S. corporations like Apple to decrypt data on-demand following a court order won’t be formally introduced this year, and has lost the support needed to advance anyway…

The bill — backed by Senators Richard Burr and Dianne Feinstein — didn’t have the support of the Obama administation, the sources told Reuters. Former CIA and NSA director Michael Hayden in fact claimed that the White House has “dropped anchor and taken down the sail.”

Well, NO LONGER had the support of Obama.

Although Burr and Feinstein are the Republican and Democratic heads of the Senate Intelligence Committee, respectively, Committee members from both political aisles have reportedly backed away from the legislation, particularly Democrats. No one in the House ever offered support…

The Burr-Feinstein bill emerged in the wake of Apple’s fight with the Department of Justice and the FBI over unlocking the iPhone of San Bernardino shooter Syed Rizwan Farook. Although the DoJ ultimately withdrew a court order asking Apple to build a workaround for iOS’ passcode retry limits, encryption issues had gained more prominence, and indeed many in U.S. law enforcement — such as FBI director James Comey — are still asking for backdoors, worried that encryption is putting some communications beyond their reach.

Most folks are aware of how and why such legislation illustrates the corruption of both political parties. Add in the sheer stupidity of introducing bills which can only affect communications inside the US – sort of – and the whole world gets an object lesson in how much of American politics is play-acting. Little morality plays designed to keep Talking Heads employed and useless politicians in office.

FBI attack on Apple will accelerate development of government-proof devices


Reuters/Carlo Allegri

The legal showdown between Apple and U.S. law enforcement over encryption, no matter the outcome, will likely accelerate tech company efforts to engineer safeguards against government intrusion, tech industry executives say.

Already, an emerging industry is marketing super-secure phones and mobile applications…

If Apple loses the court case, the legal precedent could give the U.S. government broad authority to order companies to assist in breaking into encrypted products.

But even a government victory could have unintended consequences for law enforcement, potentially prompting a wave of investment by U.S. tech companies in security systems that even their own engineers can’t access, said Jonathan Zittrain, co-founder of…Berkman Center for Internet & Society…

The fast-growing online storage provider Box has already made it a priority to give customers sole custody of data, said Joel De la Garza, chief information security officer at the company. The intent is to make it impossible for the company to access its customers’ data – even under a government order, he said.

Our goal is to achieve a `zero-knowledge’ state for the company, he said, “where our customers have total control over their data…”

In the more than two years since former U.S. intelligence contractor Edward Snowden revealed widespread spying via U.S. companies, a handful of companies have released secure phones…that trumpet security as a prime selling point…

Those businesses could surge if the Apple fight drags on…The fight between Apple and the government could give such security efforts a new urgency.

Keep on rocking in the Free World.