ETD: 815 How Retailers Are Turning to Tech; Where to Incorporate: Offshore? Delaware? Nevada? Home?; Luxury Consumer Confidence and Spending Rebounds

[E-Tailer's Digest]

  E-Tailer's Digest --- Everything for the  Retailer
  Issue #0815             September 2, 2004
  George Matyjewicz, Moderator         mailto:georgem at gapent.com
  Published by:  GAP Enterprises, Ltd.  http://www.etailersdigest.com
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  CONTENTS

  [1]  Greetings
  [2]  How Retailers Are Turning to Tech
  [3]  Where to Incorporate: Offshore? Delaware? Nevada? Home?
  [4]  Luxury Consumer Confidence and Spending Rebounds

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  [1]  Greetings.
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Hi All:

For our U.S. members, I wish you all the best for Labor Day, and safe 
journey in your travels.

For the next two weeks, I will be travelling and sure could use some 
special reports.  I will be at a conference in Las Vegas next week, and in 
London the following week on business.  So, if anybody has something of 
interest to list members, please pass it on and we will publish it and it 
will remain for posterity at our Special Reports site 
http://etailersdigest.com/resources/Specials/index.htm  The article should 
be 1,500 to 2,000 words on anything to do with retailing/etailing.

Remember that article I wrote "Retailing in 2023?" 
http://etailersdigest.com/resources/Specials/Retail-2023.htm  Well it may 
be coming faster than I stated.  Take a look at how retailers are now 
turning to technology more and more every day.  Interesting stuff.

Ever wonder where you should incorporate?  Did you know you don't need to 
incorporate in your home state?  You may want to consider Delaware, Nevada 
or even offshore.

Pam Danziger brings us more information on her favorite topic - luxury 
spending.  Unity Marketing develops some very interesting reports.  I have 
purchased a number of them at various times.  They have their fingers on 
the pulse of giftware and the luxury market.

Tell us about your business which will remain  for posterity at 
our  "Members: Who Are You?" 
site.   http://etailersdigest.com/resources/members/index.htm And we have a 
form there for you to tell us about you.  As I said when I first proposed 
this idea, we have "known" each other for a long time, yet we often don't 
know anything about each other.   So, tell us who you are and what you do.

Now, let's get to everything for the retailer.

Sincerely


George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com

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  [2]  How Retailers Are Turning to Tech
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Olga Kharif reports in E-Commerce Times, that newbie shoppers entering a 
Food Lion in Mooresville, N.C., might think they've come to the wrong 
place. The shop looks more like an electronics emporium than a traditional 
grocery store. Customers bustle about brandishing handheld scanners. 
Information kiosks dish out maps on how to find any item, such as that 
lattice pie crust hiding between aisles 7 and 8. And near the pharmacy, a 
high-tech blood-pressure monitor takes shoppers' readings and keeps the 
data for a year.

While this Food Lion experimental store seems extraordinary, technologies 
assembled within it could become commonplace within two years as retailers 
prepare for a makeover as dramatic as any on the Mix It Up home-design TV 
show. Gone will be today's cashier stations, price tags, paper sales signs, 
pharmacy waits, and deli lines. Hold on to your cart, because your shopping 
experience might soon have little resemblance to anything you experience 
today.

'Biological Problems'
What's behind this shift to technology?  With consumers growing more 
accustomed to the quick convenience of shopping on the Internet, 
bricks-and-mortar retailers are having to hustle like never before. They 
increasingly find that new technologies are often the only way to keep 
costs down while offering customers a better shopping experience. Buyers 
appreciate kiosks that can suggest the perfect recipe to go with white 
wine. And a self-checkout that halves the time spent waiting in line can be 
a big draw.

Add changing demographics, and the time is ripe for shopping to get a tech 
infusion. As the population ages, buyers look for technologies that offset 
their declining capabilities. Baby boomers, for example, like gadgets that 
make up for their deteriorating eyesight -- such as the hand-held scanner 
Food Lion is testing out that displays an item's price and description in 
larger type. "A lot of the high technology is really addressing some 
biological problems that our society is having," says Craig Childress, 
director of prototype design research at human-behavior consultancy 
Envirosell in New York.

"If you really want to be here down the road, you have to look at consumer 
trends and change accordingly," says Susie McIntosh-Hinson, a senior 
vice-president at Food Lion. As a result, the $3.6 trillion U.S. retail 
industry now spends about 2.1% of its sales a year on technology, up from 
1.8% in 2001, according to IBM Global Services' 2003 survey of 78 chief 
information officers and tech managers.

"The retailer is going to know you -- your size, your brand preferences -- 
better than you know yourself" Early results indicate the payoff can be 
sizable. New gizmos and software can speed up sales growth from about 5% 
today to 7% to 8%, says Marshal Cohen, chief industry analyst with 
consultancy NPD Group. Consider this: By recommending curtains that go with 
the bedding a customer has picked, an in-store kiosk can increase that 
buyer's spending by 25% or more, estimates Francie Mendelsohn, president of 
kiosk consultancy Summit Research Associates in Rockville, Md. And an 
interactive digital store sign that chipmaker Intel  is working on might 
notice that a buyer has put a bottle of shampoo in his cart and suggest a 
conditioner that complements it.

Safe Data?
This type of technology has one drawback, however, which could slow its 
adoption. To make shopping more convenient, "the retailer is going to know 
you -- your size, your brand preferences -- better than you know yourself," 
predicts Cohen. That means buying habits, preferences, and personal 
data  will be collected by retailers, potentially sparking 
privacy  concerns. Already, some customers avoid preferred-shopper, or 
loyalty, cards and make purchases with cash only. As stores get more 
high-tech, retailers will need to persuade shoppers that they won't sell or 
misuse their data.

If retailers can ease concerns, the store of the future will unfold. You 
can catch an early glimpse at chains like Stop & Shop Supermarkets, which 
is testing a device called a Shopping Buddy. This gizmo is the size of a 
large purse that attaches to a shopping cart's handlebar. It sports a flat 
screen that can scan a customer's preferred-shopper card to reveal a list 
of past purchases. A shopper can then use the data to compile fresh grocery 
lists, and the Buddy will direct them to the aisles where the items can be 
found. Research shows that most customers leave a grocery store still 
having something they wanted to buy but couldn't find.

Made by tech companies Symbol and Cuesol, the Buddy can also suggest an 
entree to make for dinner and provide customers with a related list of 
ingredients and cooking instructions. And at three experimental Stop & Shop 
stores, it allows shoppers to place an order with the deli: Just hit "the 
usual" button to order your favorite chicken sandwich. The contraption will 
notify the shopper when it's ready to be picked up. Stop & Shop is about to 
roll the Buddy out chainwide.

Buying with a Fingerprint

Another area where technology can play a pivotal role is by reducing fraud 
and identity theft, which costs consumers billions annually. San Francisco 
startup Pay By Touch has developed a fingerprint-based electronic wallet 
already used at several Roundy's and Piggly Wiggly grocery stores. To sign 
up, customers scan a finger and swipe their debit and credit cards at an 
in-store kiosk. The next time they come to a cashier, their fingerprint 
reading will open a customized screen, with a list of their payment options.

However, the bulk of innovation will happen behind the scenes. Cuesol, for 
example, has developed a device the size of a cell phone  that attaches to 
the front of shopping carts, pinpointing their exact location within a 
store. Then the carts all show up on a computerized map. If a manager sees 
scores of consumers heading to the pharmacy, staff can quickly be sent 
there to reduce lines. Cuesol will begin testing the system at select Stop 
& Shop stores in three months.

Tech Limits

The jobs of the rank-and-file will get easier, too. Microsoft is developing 
a location-based information database that workers can use to get answers 
to customer questions. If a shopper asks a salesperson in the TV section 
how to get cable service, the database might retrieve a local provider's 
number.

But the same question, when asked by someone in an area selling various 
cables and hardware components, might generate an answer like "coaxial 
cable." "This will enable employees to get up to speed and become educated 
quicker," says Brian Scott, general manager for the retail and hospitality 
industry solutions group at Microsoft.

Of course, high tech won't solve everything. Much can be accomplished by 
simply making stores less cluttered and their layout more immersive -- like 
the cosmetics sections in department stores, says Tom Gibbs, Intel's 
worldwide director of industry strategy. And it's important to keep in mind 
that "people can only handle so much change," Gibbs says.
Still, retail technology is about to take a giant leap. And it promises to 
be a profound -- and profitable -- one for both retailers and consumers.

Details at...
http://www.ecommercetimes.com/story/36264.html

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  [3]  Where to Incorporate: Offshore? Delaware? Nevada? Home?
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When it comes to incorporating your business, did you know that you do not 
need to incorporate in your home state?  Not even in your home country.

Many companies incorporate in the Caribbean in countries like Bermuda, St 
Kitts, Nevis and British Virgin Islands, all for a variety of reasons.

In the U.S., the two most popular states for incorporation are Nevada and 
Delaware, mainly for tax or anonymity of the shareholders. However, there 
is no tax advantage if you file a Limited Liability Company (LLC).

Let's look at the alternatives:

Delaware has more corporate filings than any other state.  It has always 
been the incorporation mecca, due to the Delaware General Corporation Law 
to the flexibility built into the corporate formation process.

Incorporating in Delaware is generally less expensive than most other 
states. The initial charge for incorporating in Delaware can be as low as 
$89.00; the annual franchise tax can be as low as $65.00 in many cases; and 
the cost of continuing operations is low as well. There is no Delaware 
corporate income tax for corporations that are formed in Delaware so long 
as they do not transact business in Delaware.

Another benefit of Delaware incorporation is Delaware's extensive and often 
easily interpretable law. Delaware has a separate Court of Chancery (a 
business court) that does not use juries, but instead utilizes merit-based 
(not elected) judges. Because there are no juries, decisions from the 
Chancery Court are issued as written opinions, and as such, Delaware has a 
large body of written legal precedent to rely upon.

Nevada began with corporate statutes based on Delaware, and went further to 
establish a corporate structure that allows investors and owners of Nevada 
corporations to remain completely private, much like offshore corporations. 
The Supreme Court of Nevada has consistently taken a very strong stand in 
the protection of corporate privacy, even when a corporation fails to 
adhere to basic corporate formalities.

Since the implementation of these privacy statutes in 1991, the number of 
new incorporations in Nevada has exploded. Unlike most other states, Nevada 
does not require corporate stockowners to disclose their information. In 
fact, the information is not kept on file with the state.

Additionally, to ensure privacy, Nevada allows its corporations to use 
bearer stock certificates, which make it virtually impossible to prove the 
ownership of a Nevada corporation. Accordingly, owners or investors 
utilizing bearer shares can have complete control and ownership while 
remaining anonymous.

Nevada also does not tax the income of its corporations or its state's 
citizens. A Nevada corporation is also not subject to any other hidden 
taxes such as franchise taxes, capital stock taxes, or inventory taxes. 
Sales tax applies only to products sold within the state.

Incorporating in your home state.  For most small businesses, however, it 
may still be best to incorporate in the state where that business is based. 
Even though some factors favor incorporating in the "friendly" states of 
Delaware or Nevada, it may be more expensive and more of a hassle to 
incorporate a smaller business out of state. For this reason, it is 
important to consult with your attorney or accountant about the pros and 
cons of incorporating out of state before making your final decision.

In any event, unless you know what you are doing, you should consult an 
attorney.

For those of us who are comfortable with incorporating, contact the Company 
Corporation at http://www.mycorporation.com/affiliate.asp?resellid=11624584

Yes, E-Tailer's Digest is a reseller of MyCorporation, and I have 
personally incorporated many businesses with them.

George

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  [4]  Luxury Consumer Confidence and Spending Rebounds
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Luxury goods consumption index rises 4.9 points to reach 102.7

Reflecting a greater confidence in the economy, luxury consumers showed a 
substantial increase in their overall confidence in the second 
quarter.  The Luxury Consumption Index rose to 102.7, up nearly five points 
(4.9 points) from the March 2004 level of 97.8, according to Unity 
Marketing's second quarter Luxury Tracking Study.

"The Luxury Consumption Index measures luxury consumers' feelings and 
attitudes about their financial well-being.  For example, 36 percent of 
luxury consumers (average income of 143k) personally feel better off now 
than they did during the first quarter, and 29 percent believe the country 
as a whole is better off .

As a result, the luxury consumers spent more freely on luxuries.  Purchase 
incidence of home luxuries, personal luxuries and experiential luxuries 
rose in the second quarter, while the typical luxury household spent 72 
percent more on luxuries in the quarter.

Net/Net:  More luxury consumers were in the market during the second 
quarter buying more luxury goods and spending more on their 
purchases.  Overall, the personal and experiential luxury categories grew 
the fastest, while home spending remained even with the first quarter.

Personal and Experiential Luxury Best Performers

The typical luxury consumer spent about 50 percent more on personal 
luxuries, including fashion and accessories, jewelry, watches, cosmetics 
and automobiles. They more than doubled spending on experiential luxuries, 
such as travel, dining, entertainment and spa/beauty, in the second 
quarter.  In particular, luxury dining and foreign luxury travel saw 
significant increases.

Thomas Bodenberg, economic forecaster for Unity Marketing and former 
Conference Board executive, comments, "At 2004's midpoint, we find that 
continuing strength in the financial services and real estate sectors have 
propelled household confidence in luxury goods to higher levels.  In 
addition, despite political and petroleum uncertainties, demand for luxury 
goods and services is not only consistent with recent trends, but also 
shows definitive increases."

About Unity Marketing's Luxury Tracking Study

This benchmark index of luxury buyers is calculated from a sample of over 
1,000 upper-income households throughout the United States.  This panel, 
with household incomes over $75,000 (one-third $150,000 or more) represents 
one of the largest longitudinal studies of high-end luxury consumption of 
goods and services.  Panelists reported purchasing behavior of luxury goods 
and services over the past three months, as well as attitudinal and 
expectation data about luxury brands and categories, their households and 
the health of the economy in general.

Click here for more information on Luxury Tracking
http://www.unitymarketingonline.com/reports2/luxury/luxury3.html

Pam Danziger, President
Unity Marketing Online

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