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Sunday, 8 October 2017

The last Social-Democrat standing has now fallen over?! Eberhard van der Laan and the apparent superfluousness of modern Social-Democracy in the current Conservative Wave

“The greatest trick the Conservatives ever pulled,
is convincing the lower classes in society they don’t
need social-democrat parties anymore”

Last week, the lately retired mayor of Dutch capital Amsterdam, Eberhard van der Laan, died of disseminated lung cancer amid his beloved family.

Mayor Van der Laan, who was also Minister for Housing and Integration in the fourth Cabinet of Jan Peter Balkenende (2007 – 2010), left his beloved city Amsterdam in grief, shock and awe after his expected, but yet untimely death.

Van der Laan, an intelligent, extremely driven and cunning former attorney was every inch a social-democrat: a person who had a great compassion for other people and put his own personal wealth at second place, after the prosperity and wellbeing of others.

Especially the ones who had not been so lucky in life and threatened to end up at the wrong end of the line, got his personal attention and energy. This was under the premise that they wanted to improve their own situation and were willing to put their own energy in it. But Van der Laan was not a wimp, who believed every sad story he heard and who saw every poor or criminal person as a victim of circumstances.

He was an extremely hard worker, who also demanded this from the people around him. Therefore he could be impatient, sometimes quite direct and even rude and tough regarding his personnel, as well as on other people. Especially people who did not work hard enough to his eyes.

On the other hand, he never forgot his compassion with the people in need.He demanded serious efforts from the needy to pull themselves out of the moor, but made sure that they got all the tools they needed to achieve this; a real helping hand for everybody who needed that. And he took the helm whenever the situation desired that and was effortless in solving the big problems, when they emerged. All these features together made him arguably the most beloved mayor of Amsterdam ever.  

This was the reason that the emerging stories about his debilitating and lethal sickness as of February 2017 and eventually his death caused so much grief among the citizens of Amsterdam.

At about the same time last week, the current PM of The Netherlands Mark Rutte (liberal-conservative party VVD) finalized the construction of his new, four-party Cabinet, together with CDA (Christian-Democrat party), D66 (liberal-progressive party) and ChristenUnie (Christian party).

And to make clear for which this new Christian-Liberal-Conservative cabinet would stand, the Dutch newspapers stood full of (leaked) news messages about tax reduction and tax shifts:
  • Substantially lowered corporate taxes (to 21% from 25%) for large companies;
  • Reduced income and corporate taxes for small and medium enterprises;
  • Lowered wealth and income taxes for the mid and especially higher incomes;
  • ... and last, but not least, increased Value Added Taxes on basic food supplies (to 9% from 6%).

Summarizing, these are almost all measures from which the mid and higher incomes and the large companies will benefit most, while lower incomes have to deal with increased prices for basic food supplies. These increased expenses for food all add up to a lion share of the monthly income for the people with lower wages and those who live on welfare.

A really puzzling question, that is put forward by especially this upcoming tax reduction for (large, multinational) companies, is: what is the need for it?! In other words: why would these companies, who already make sturdy profits at the moment, have to be tickled some more through these tax reductions? What is it good for?!

The large, listed corporations and financial institutions are not exactly in dire straits at the moment and are not in desperate need of getting more working capital. To the contrary: the influx of money is almost reaching the ceiling of most large companies, banks and investment vehicles in this economic bull-market. This is reflected in the gargantuous merger and acquisistion deals that are currently taking place all over the world, as well as in the arguably overrated shares on many stock exchanges.

And the same is true for the wealthiest people in The Netherlands, which profit most from the new, reduced tax rates. They are not exactly doing poorly at the moment, aren’t they?! So why should these well-to-do people need tax rate cuts anyway?!

Why – for crying out loud – would the new cabinet Mark Rutte III give yet another tax cutback for these corporations and for the wealthiest people in The Netherlands, when they evidently don’t need it at all? Everybody and their sister know that the mounting inequality between the lower and higher societal classes and the enormous differences in wealth are yet problematic phenomena. And on top of this, these effects are getting bigger and bigger, irrespective of these new rate cuts! The rate cuts only reinforce these phenomena, which are devastating for the societal cohesion and solidarity between the different classes.

And perhaps the most puzzling question of them all: why are the really poor people and the people with lower incomes in the EU countries massively abandoning the social-democrat parties, instead of letting them win elections?

First and foremost the social-democrats are supposed to operate mostly in the interest of the lower class people. Yet, they are abandoned in favour of the (liberal-)conservative parties and the extreme right-wing nationalist parties all over Europe.

How can it be explained that Christian / Liberal / Conservative parties can form a workable majority in most European parliaments, while the social-democrats are convicted to yet another number of years at the sidelines, due to having yet again too little votes.

See for instance The Netherlands were the labour party (i.e. PvdA ) was virtually annihilated, with a seat loss of almost 30 seats.

Or look at Germany where the social-democrat party SPD of Martin Schulz was beaten up badly by past and future Chancellor Angela Merkel of the Christian-Democrat CDU. Or Poland and Hungary where religiously driven, authoritarian ultra-conservatives are introducing ‘grandfather’s  reactionary policies’ as an answer to the challenges of the 21st Century .

Or look at the UK, where the accident-prone Prime Minister Theresa ‘Butterfingers’ May could continue her pro-Brexit collision course against the EU, until the UK ends up in economic oblivion and much more starts to drop down than only the ‘F’ in the word ‘for’.  And knowing that her main adversary within the Tory party is the pathological liar and political clown Boris Johnson, whose stint as Secretary of State for Foreign and Commonwealth Affairs made a lasting impression for all the wrong reasons.

Or see France where Président Emmanuel Macron could start with his liberal-conservative policy 2.0, trailed by the right-wing Front National of ‘daughter of’ Marine Le Pen.

And last, but not least: look at Spain, where conservative PM Rajoy knows nothing better to do than beating all plans for an independency referendum out of the skulls of the Catalunyan citizens, with brutal force.

To paraphrase anti-hero Verbal Kint (i.e. Keyser Söze ) in the magical film The Usual Suspects: “The greatest trick the Conservatives ever pulled is convincing the lower classes in society they don’t need social-democrat parties anymore!”.

That is the most worrisome conclusion of the current political situation: in times in which vivid, empathic and sensible social-democrat policies are needed more than ever to reduce the mounting differences between the rich and the poor in the European societies, the social-democrats are annihilated and even ridiculized by the other, mostly conservative and extreme right-wing parties.

Does this mean that social-democracy is dead and buried nowadays?! Will it never have the chance to emerge from the ashes anymore, like a phoenix?  Have the spirits of ‘a fair share of the pie for everybody’ gone foregood?! I don’t think so!!!

I happen to think that it IS the end of the line for the so-called “social-democrats-in-name-only” that nowadays still flock the European parliaments and government buildings. People that appear to be social-democrat, but in reality are societally detached, technocrat apparatchiks, housing in their ivory towers. These are indeed superfluous and well beyond their expiration date.

People, like former British PM’s Tony Blair and Gordon Brown, labour leaders Diederik Samsom and Lodewijk Asscher in The Netherlands or social-democrat powerhouse Martin Schulz in Germany.

People that perhaps started with the right ideas and the right energy, but who are now so deeply seized by the temptations of the makeable society, their governmental position and current power, that they forgot for whom and whose interests they are working in the first place.  People who are simply too attached to the privileges and power that came with their position.

On the other hand, it is also the end of the line for the hardened proto-socialists like Jeremy Corbyn and their “marxist” dreams of total division of wealth and the “socialist Workers International”. They are all well past their expiration date too, in my humble opinion, as their ideas are so far removed from the questions and conundrums of the current society, that they are not at all able to answer these questions and solve these conundrums and stick to overdue frames and visions that are not feasible anymore.

But does that mean that the concept of social-democracy itself has passed away?!

I get a glimmer of hope from the widespread public grief and endless respect and compassion that accompanied the passing away of “Burgemeester” Van der Laan of Amsterdam.

First and foremost Van der Laan was a tough and compassionate social-democrat by heart. His death proved beyond a reasonable doubt  that people in the street are still moved by leaders with a good heart and a strong will, who are willing to fight for a just cause. Hence, the widespread public grief after Van der Laan’s passing or the countless tokens of appreciation and love for this ‘tough guy’ during his prolonged period of sickness and deteriorating health.

Van der Laan was a man who exposed many of the mainly ‘self-interested’ and (corporate) wealth-oriented liberal-conservatives as the bleak, egocentrical and clueless people-without-a-vision-towards-a-better-world that they are. People, who think that introducing an increased speed limit for gasoline-operated cars (to 130kmh from 120 kmh) is a good thing for the environment and who live by the adage “apres nous le déluge”(i.e. after us the tidal flood).

Sadly Van der Laan has passed away now, but his legacy is nevertheless that a genuine social-democrat is still able to change things for the better: one step at the time, but always persevering. Let’s keep heed of this invaluable legacy and let’s breed a new generation of genuine social-democrats!

He was definitely not a saint, but a man with genuine convictions and with a real plan for the people in need, who deserves successors all over Europe. In spite of the current bad reputation of social-democracy.

Saturday, 30 September 2017

The interests of Schiphol Amsterdam Airport and the Dutch economy are not synonymous, even though Schiphol tries to make us believe that.

It was quite conspicuous news last week, except for the fact that it wasn’t… for all those who know the situation around Schiphol Amsterdam Airport:

Due to the deployment of new European calculation rules for noise pollution, the airport was allowed to grow with a significant number of slots per annum. At least, according to an environment effects report (i.e. MER in Dutch), researched and published on behalf of the airport itself. The following article is from news broadcaster NOS:

Additional annual growth in flight movements is demonstrably possible for Schiphol, according to the airport itself. The calculations show, according to Schiphol, that it is possible to grow “in a sustainable and safe way”, as the airport is now well under the agreed norm of noise pollution.

The data are mentioned in the Environmental Effect Report (MER), that Schiphol had to publish,commissioned by the Dutch Ministry of Infrastructure and Environment (Ministry of I&M).

Today Schiphol presented the data to representatives of the neighbouring people, officials from the region and the airtransport industry. Based upon the conclusions in this report, these parties all hope to make agreements about the growth of Schiphol after 2020.

According to the MER, the number of houses that is dealing with excessive noise pollution has since 2015 increased to 11,000 from 10,100 (based upon the forecasted 500,000 flights per year). The agreed norm was 13,600, so the noise pollution would remain 19% below this very norm.

And according to the same calculations the number of people that suffers from serious noise pollution, caused by air transport, is 117,500. That is well below the norm of 166,500. Based upon these figures, Schiphol concluded that there is ample room for growth.

I truly hope that these data and the new EU calculation methods used in this MER report are indeed reliable and trustworthy, even though I have my doubts. Nevertheless, during the last decades, there was always one constant factor in the economic, political and legal treatment of Schiphol Amsterdam Airport:

Schiphol shall grow. Always and eternally. It does not matter how it grows, as long as it grows. When the existing norms for safety and noise pollution hamper growth, we will use new norms or new ways of measuring pollution. Whatever. It. Takes. 

When inhabitants of the region around Schiphol complain, they will be shut up with money, beads and mirrors. Or we will make them suffer in the court of law.

If business people and non-related companies have different plans for the building ground surrounding Schiphol, we will start expropriation procedures based upon safety constraints, pollution constraints or whatever we will come up with. The Dutch government will always be Schiphol’s henchman-of-last-resort, in case the sh*t hits the fan. Schiphol will win! Period!” 

Yet, the state secretary for Infrastructure & Environment, Sharon Dijksma, was not pleased with the conclusions of the MER Report presented by Schiphol, which she declared to be premature. But not for the reason that Schiphol’s conclusions about the environmental effects or the noise pollution were wrong or fouled. 

No, she was rather worried about premature conclusions by the Dutch people regarding that other “hobby project to release Schiphol from excess travellers”, Lelystad Airport.

Lelystad Airport, which is currently developed from being a local airport for private “hobby” planes into an international airport to be opened in 2019 and mainly focussed at the handling of holiday charter planes, is meant to be an overflow valve for Schiphol. 

By taking away the “cheapskate” charter flights from Schiphol towards Lelystad, Schiphol itself will get more room for the cherished growth of the lucrative and prestigious transit flights. So they think. And the Dutch government thinks this as well.

This was the reason that State Secretary Dijksma was not amused (the following thoughts of her are written by me): 

What if the world would think that the whole Lelystad Airport was not necessary after all?! Or even worse, that it would be a “dead on arrival”, waste of money project?! Hated by the charter companies (its future clients) and hated by the people in the surrounding, rural areas, who would now suffer from excess noise pollution and exhaust pollution in their nature-laden living space.

That would be bad news, wouldn't it...?!

Sharon Dijksma reacted to the boasting of Schiphol about future growth possibillities in a parliamentary debate:”Why now? It is thoughtless to do this now! This paints a picture that Schiphol can grow eternally and that Lelystad is not necessary”. She suggested in the debate that the MER was not ready yet and lacked the cohesion with other topics.

State secretary Dijksma reacts here like a small child of which a favorite toy is taken away by its parents:
  • Not a word by State Secretary Dijksma about the fact that the increased noise and air pollution of continued growth for Schiphol is bad for the people, living in North and South Holland. Or the people living in the take off and landing zone of Lelystad Airport, as a matter of fact.
  • Not a word about the enhanced safety risks that Schiphol’s growth has to offer for the region and the airport itself. Or that Lelystad Airport poses.
  • No, everything she states is about the risk that her hobby project “Lelystad Airport” would turn into a (financial) disaster. A monstrosity that nobody really likes, but that is built anyway [which it very well might be after all – EL]. 
This proves the eternal shortsightedness of the Dutch government, in case of Schiphol and its growth figures.

The fact that Schiphol has already some serious issues with the current influx of flights and passengers, is not incorporated in the overly optimistic growth plans for the following ten years. Nevertheless, the writing is already on the wall, according to Het FD:

Overloaded parkings, endless queues and dozens of passengers missing their flights. The start of the May holiday was chaotically at Schiphol. And it stays crowded: the coming months the airport expects about 100 peak days with 200,000 passengers each.

This snippet is symptomatic for the situation at Schiphol, where the passenger, security and safety infrastructure can’t keep up with the excessive ambitions of the management.

At this moment the airport is seemingly experiencing “peak load”, which makes it nearly impossible to reach further growth without taking some drastical countermeasures to reduce overcrowdedness.

And there is more: The Netherlands is one of the most densely crowded countries in the world and already has a vast airtraffic network. The addition of Lelystad Airport and the tens of thousands of flight movements this will cause eventually, is already a conundrum for the Air Traffic Control. 

Addition of roughly 20,000 extra flights per year on Schiphol itself, on top of that, will make this conundrum extremely hard to solve and will inevitably lead to enhanced safety risks and more ‘near misses’ in the air, not even to think about worse incidents with casualties.

That Schiphol and The Netherlands have only experienced a few flight disasters with more than 10 casualties (f.i. the Bijlmer disaster in 1992 or the Turkish Airlines accident in 2008) is probably rather a question of sheer luck than of strategic insights and appropriate counter measures.

Airplane accidents tend to follow statistics in the end. The higher the number of flight movements is, the higher is the risk for fatal accidents. And fatal accidents in densely populated areas carry more risk for elevated levels of casualties than in scarsely populated areas. There is no bargaining with such basic statistical rules.

Nevertheless, Schiphol is – together with Rotterdam World Port – targeted as mainport in The Netherlands by the Dutch government. 

That means that Schiphol is considered a strategic asset, with respect to labour supply, international political and business relations and economic growth. In the past, government officials have decided that Schiphol should be a pivot point for international air traffic (transit flights) and (as such) one of the largest and most importants airports in Europe.

That the competition with the airports of Dubai and Istanbul for transit flights is almost impossible to beat (due to vast state subsidies in their host countries) and that The Netherlands is probably not fit for hosting such a crowded airport, does not matter.

Schiphol is paramount for the Dutch economy – so they say – and its growth should not be hampered at all, or else… 

This is an almost religious belief among goverment officials, lobby groups and Schiphol itself. And Lelystad Airport, which will partially destroy a few of the most beautiful nature areas in The Netherlands with its strongly increased air and noise pollution, is part of this scheme.

Exactly this makes it nearly impossible to have a fair discussion about the pros and cons of such dense air traffic in The Netherlands, as it always falls on deaf ears with the government and the lobby groups. That is… until another catastrophic air accident with dozens of casualties occurs. Let us hope that does not happen.

Until such a dramatic event occurs in reality, it is time to reconsider the desirability of such heavy airtraffic in such a densely populated country, as someone has to do that and draw his conclusions. 

Schiphol’s interests are not synonymous to the interests of the Dutch population, even though Schiphol is trying to make us believe that.

But that person will probably not be part of the Dutch government. Slim chance… 

Tuesday, 26 September 2017

Viva chancellor Angela Merkel! Or how the textbook example of a ‘dull-ish’ and down-to-earth politician can feel like a relief in the thunderstorm of political roosters.

Well life has a funny way of sneaking up on you
When you think everything's okay and everything's going right

“Isn’t that ironic?!”

I had to think about this ironic... ehm iconic song by the Canadian singer-songwriter Alanis Morisette, when I read in the newspaper that Moscow “was worried about the bellicose rhetoric between North Korea and the United States and considered it to be ‘over the top’”.

The given fact that the government of Vladimir Putin – who is of course the conqueror of Crimea and an alleged plotter against Ukraine and the US as well as a genuine firebrand – suddenly sounded so worried about the aggressive rhetoric between North Korea and the United States was indeed quite ironic. 

In fact, it seemed like the response of a juvenile pyromaniac that “he didn’t expect the house to be set on fire, after having played with matches in his room”.

Nevertheless, it seems a fact that the Russian former secret agent and kindred spirit of Niccoló Macchiavelli, president Vladimir Putin is indeed deeply worried about the outcome of this vocal brawl between the two utterly immature hyperbullies: president Donald Trump of the United States and president Kim Jong Un of North Korea and their host of thermonuclear toys and missiles.

And that is definitely a fact to be concerned about:

"Moscow is deeply concerned by an escalation of tensions on the Korean peninsula related to an exchange of rather rude statements replete with threats," President Vladimir Putin's spokesman Dmitry Peskov told reporters.

"Moscow still calls on all interested parties to display restraint so as not to provoke this escalation even further," Peskov said, reiterating Russia's position that the problem surrounding the North's nuclear programme should be settled through negotiations only.

On Tuesday, US president Donald Trump used his maiden address to the UN General Assembly to warn "Rocket Man" Kim that he will "totally destroy" North Korea if it threatens the United States or its allies.

In a rare personal attack published hours after Washington announced the tougher sanctions, Kim said Trump was "mentally deranged" and will "pay dearly" for his threat to destroy his country.

And the mild-grumpy Russian Foreign Minister Sergei Lavrov ‘did his two cents’ in a separate statement about the mounting tensions between the US and North Korea:

“Unfortunately, the rhetoric in Washington and Pyongyang is now starting to go over the top,” Lavrov said. “We still hope and believe that common sense will prevail.”

Asked at a forum for Russian students about the risks of the stand-off escalating into armed conflict, he said: “The risks are very high, especially taking into account the rhetoric.”

“Direct threats of using force are heard... The talk (in Washington) is that there must be a preventive strike made on North Korea, while Pyongyang is threatening to carry out a missile strike on the U.S. base in Guam. These (threats) continue non-stop, and they worry us a lot.”

Of course Dmitriy Peskov, Sergei Lavrov and ultimately Vladimir Putin are right about the deteriorating situation between the US and Korea. This particular situation proves that the globe is a too dangerous arena to have ‘amateur night’ in world politics.

Kim Jong Un seems in his actions and his behaviour like a totally spoilt brat with 'half a brain', but with at the same time a god-like status in his frightened and badly beaten up home country. His closest henchmen fear his unpredictability and shiver when they hear the tales about Kim’s draconic and lethal ways of punishing his “adversaries” (i.e. mostly former confidants who fell from grace) in the recent past. 

And where his father and grandfather traditionally showed some kind of restraint out of self-defence in their behaviour against their bigger adversaries, it seems that with Kim Jong Un "all brakes are off".

And Donald Trump? He left both the Whitehouse staff and Congress in a constant mood of shock and awe with his countless untrue, hollow statements and straightforward lies. Not even to mention his extremely rude and uneloquent rhetorics at every occasion or his over-the-top and counterproductive politics and constant self-applauding. And last, but not least, with his clueless vision on both domestic and foreign affairs, in which he acts like a six year old carrying matches in a fireworks plant.

That both Trump and Kim are real amateurs in politics is something that they make clear at every occasion. And especially very recently with the overheating crisis around the North Korean nuclear program that can get out of control very easily and without a proper warning. 

From mounting mutual threats a few weeks ago, both government leaders are now promising eachother total annihilation: not as an ultimate possibility, but as an event that could occur every moment and at will. In other words, a devastating war can be started by each of both leaders when the other party does something they don’t like. Even though some of it can probably be regarded as kettle music, it is nevertheless a very dangerous situation.

As a matter of fact: even the most religiously driven and patriotic Republican exceptionalist must probably confess that “The Donald” did not exactly make the global situation safer for the United States.

The only reason that most Republicans in Congress still seem to show confidence in President Trump, is that openly forsaking their trust in him would be a moral victory for the Democrats, which they hate beyond anything else.

And many American citizens as well as people all over the world are now looking at North Korea and the United States like a rabbit looks in the emerging headlights of a car. All hope dearly that one of both leaders does not scr*w up catastrophically, but that is all what they can do about it.

What a difference then with the German ‘first lady’, Angela Merkel, whose party - the CDU/CSU (Christian-Democrat) combination - was re-elected for the fourth time in a row last weekend, effectively making her Chancellor again for the whole period or as long as she desires.

Angela Merkel has seemingly the charisma and radiant energy of a doorknob and would never be elected in a country where form goes over function, like the United States. However, her intelligence, wisdom and calm perseverance make her the ideal captain to guide the European Union ship through the highest political waves.

Her sincerity, political “Fingerspitzengefühl’ (i.e. sensitivity) and power to stay out of the spotlights in favour of her political friends, as well as the fact that she does not have real political enemies, make her the ideal, unassuming leader of the EU. The new French Président Emmanuel Macron is allowed to be the radiant “new kid on the block”, who attracts all the attention, but in the end everybody knows who is really in charge.

Angela Merkel, with her dull-ish and down to earth charisma is the ideal counterbalance for the political roosters Donald Trump and Kim Jong Un, who both have to deal with enormous egos and with the fact that they are genuine political amateurs in a time when the world dearly needs professionals.

If someone is capable to pull the fuse out of the North Korean powder keg, it must be Angela Merkel, even though she showed an open disliking for the blunt and rude Donald Trump. 

Although Angela Merkel is not considered to be a party in this dangerous conflict, she could perhaps use her influence with Chinese president Xi Jinping to force him into a more leading role in this conflict. And Xi Jinping might be the only one to whom Kim Jong Un would listen in the end.

And when Merkel does so, she will find Russian president Vladimir Putin at her side. Vladimir Putin has definitely fought his own battles on several chess boards during the last few years and he is a ruthless leader with only his own goals and interests in sight. Nevertheless, he will not be happy about the current political instability: “It is nice to create some havoc in Europe every now and then, but I can’t use a full-blown global war”, is probably what Putin thinks.

And then the intelligent Merkel is a natural ally for him, who knows her own (country's) limitations and recognizes the enormous interests that Europe has in Russia and vice versa (exports of semi-manufactured goods and consumer products and imports of oil and natural gas(!)).

So even though Angela Merkel is not totally uncontroversial in Europe and made a few errors too in the past, we must be glad with this sensitive and sensible political powerhouse in Berlin. She is masterful at both containing the deteriorating domestic political situation (e.g. at this moment the (extreme) rightwing Alternative für Deutschland being elected as third party in Germany) and the outright flammable world politics of this moment.

And that is good to know with the current ongoing thunderstorm between the political roosters Kim and Trump... Viva Angela Merkel!

Tuesday, 13 June 2017

The diabolical dilemma of e-commerce: losing money on your business or losing your whole business

People who follow me more closely and visited my LinkedIn page in the recent past, know that I work for a large chain of supermarkets in The Netherlands. 
And of course this supermarket chain is involved in e-commerce (i.e. online sales of groceries). As a matter of fact, I work in the team that is responsible for maintaining and improving the omnichannel webshop, including the normal webshop, the mobile webshop and the web apps for Android and iPhone.

It is a safe conclusion to state that omnichannel e-commerce as a prominent sales channel is booming. My company presented double digit growth on its online channel sales last year and this year promises to be even better than last year.

So everything is cool, right?! Well, that depends...

E-commerce is more and more turning into an arms' race between competitors in the same line of business. It is not enough for a large online store to just have a stable and reliable webshop with a proper, state-of-the-art e-commerce CMS (i.e. Content Management System) behind it, that offers a nicely looking and smoothly operating frontend webshop.

The website should be established and maintained with usage of the latest trends and insights in neuro-marketing, SEO (i.e. Search Engine Optimization), customer-tracking and behaviourial prediction, as well as continuous performance improvement for an optimal shopping experience. On top of that it should be optimized for conversion, conversion and conversion alone, in order to make it pay itself back. Everything else is ballast and loses your store money.

Letting your customer wait for 1 minute on your website or app means angry or disappointed customers; letting them wait for 3 minutes means a new customer for one of your competitors. Customer gone = customer gone forever... or at least until the moment that all your competitors scr*w up themselves and you are back in business again!

And with respect to the shipping and delivery of the ordered goods and products to the home of the customer, it aren’t delivery days anymore, but delivery hours(!) nowadays.

Being too slow in any shape or form means that you can be out of business very soon, as your competitors never sleep and are always behind you to raise the knife against you and your online store: even if these competitors come from a totally different line of business (hence: Amazon and their innovations with respect to supermarket services).

And the biggest question regarding e-commerce is: does it earn you any money?! Where that seems a straight-forward and very simple question, the answer is quite complicated in fact!

Supermarkets and large department stores are wonders of efficiency and effectivity. 

Concepts like optimal store design and optimized shelf layout, just-in-time replenishment logistics, as well as cash registers connected to automated stock control and order services and enterprise resource planning tools (ERP) have been developed to an exceptionally high level of effectivity and efficiency in most modern supermarkets and store chains. 

The choices between A-brands versus house brands for various food and non-food products and the usage of direct mail / leaflets as effective marketing tools are thought over time and time again, making the supermarket as a ‘living organism’ extremely efficient, effective and customer-guided. Also in modern department stores, logistics and just-in-time stock replenishment is a path well-trodden and optimized to a T.

Everything in a modern supermarket and department store is set up to deliver an optimal shopping experience to the customer and welcome him back every time.

Yet, e-commerce – in any which way you do it – is a whole different ball game. 

The customer does not need to visit a supermarket or department store anymore in order to know what he wants to buy. He uses the website for that. Consequently he doesn’t come over to collect his groceries or purchased products, but leaves that for the supermarket or online store to do, as quickly and accurately as possible.

This means that either (wo)men or robots must do this collection job: men and women that need to be paid an hourly fee or robots that need to be programmed and operated at quite high operational expenses. A very efficient in-store shopper might collect 4 to 5 shopping carts per hour and a shopping robot in a “dark store” (i.e. a small warehouse or distribution centre acting as a specialized collection supermarket for robots) might collect 8 to 10 shopping carts per hour. This means that the hourly fee of the human shopper or the total operational costs per hour of the robot shopper must be divided among 5 to 10 shopping carts, meaning an additional cost of €2 - €3 per shopping cart.

And then is there the delivery of goods to the home of the customer, ideally within 2 – 3 hours after the electronic purchase. About the maximum amount that the customer will pay for this delivery to his home alone is roughly €5 - €6. Otherwise the delivery is becoming too expensive for the customer from a psychological point of view, forcing him to collect his groceries himself after working hours. 

Or...  the customer may order his groceries at the supermarket’s direct competitors when they charge lower delivery costs. There are also supermarkets and online stores that do this delivery for free occasionally or even structurally, when the customer exceeds a minimal shopping amount of f.i. €25. So being too expensive is not an option for an online store or supermarket.

Ideally a store courier for an online supermarket can deliver 8 to 10 shopping carts with groceries per hour in an average city or village, but 3 to 5 is probably no exception. This depends on the distance that needs to be driven between two customers. 

This means that for supermarkets the whole delivery process from store to home takes at least two staff members (groceries collector + courier) and one (shared) delivery van per shopping cart against hourly delivery fees of (at most) €60 per hour, but often much less.

Most online department and specialty stores can negotiate special contracts with large couriers like PostNL or DHL, but small online stores mostly pay the normally pending fees for packages and mail.

Needless to say that in most cases the charged delivery fee is hardly covering expenses for supermarkets and online stores. This means that already the delivery part of the e-commerce shopping transaction is eating away the margin of the supermarket on the purchased goods...

And to a certain degree, online supermarkets have it still relatively easy in comparison with online department or specialty stores for a simple reason: unless their customers discover a flaw in their delivered groceries – damaged goods or spoilt fruit, vegetables or meat – they wil never return their goods. This makes the issue of returned goods a relatively small risk for the online supermarket operator.

However, for online department stores or specialty shops (f.i. shoe and fashion stores), the issue of returned goods is a serious extra expense for the store management. The EU obliges the online store to pay the full shipping expenses for the customer in case of returned goods. Some customers abuse this obligation by sometimes ordering 3 pairs of shoes or 3 different dresses, only to keep the best fitting ones and subsequently return the non-fitting items to the store, at the expense of the storeowner.

This is the nightmare of every online store and it is nearly impossible to prevent themselves from such unwanted customer behaviour. The largest online stores might operate their own returned goods fleet in order to save a few bucks, but most stores toothgrindingly pay the mounting shipping expenses of PostNL or DHL. 

Consequently, such extra shipping expenses for returned goods are large margin eaters: especially for shoe and fashion stores, like Zalando, that suffer from loads of returned, non-fitting goods.

And then there is of course the issue of the e-commerce infrastructure itself: a good, efficient and well-maintained omnichannel e-commerce platform (i.e. suitable for all desktop and mobile devices) with a proven, high conversion rate costs somewhere north of € 3 – 5 million per year for a store or store chain with approximately  €100 - €200 million in online sales.

This amount includes scalable hardware or cloud services, software, web design, consultancy (Search Engine Optimization(!)) and dedicated personnel. 
This means that an additional 2% to 4% margin on the sold goods is eaten away by the e-commerce infrastructure alone. Not one year, but every year...

Nowhere the expression “stagnation is decline” is more true than in case of omnichannel e-commerce platforms:

If you neglect the response times of your web services and especially your customers’ forced waiting times – impatiently looking at sandglasses and spinning wheels on their monitor – you might be out of business without you even knowing what hit you in the first place. Customer loyalty in case of brick & mortar stores is a thousandfold of online shopping loyalty. One or two bad shopping experiences and your customers skip your online store for months, years or for eternity.

All this puts high pressure on your performance, your Search Engine Optimization (“if your SEO is not optimal, you simply won’t be found on Google”), your webshop design, your product presentation and shopping cart handling, as well as on your discount calculation and weekly promotions. 

And last, but not least, on the scalability of your online store, for the days of the year that are decisive for your annual success: Sinterklaas (i.e. Dutch children holiday), Thanksgiving (in the US), Christmas and Eastern.

Summarizing, there is so many that can go wrong with one’s e-commerce platform and the expenses of keeping it up to speed and on topic are so high, eating away a large share of one’s margin, that one could wonder why he should operate an e-commerce platform in the first place and not simply stick to the old-fashioned brick & mortar store.

To be frank, when one would look at the continuity, cost-efficiency and sheer profitability of omnichannel e-commerce alone, the crystal clear message would be: don’t do it! It costs you a whole lot of money every year and yet offers a lot of uncertainty regarding the continuity of your online shop and whole business.

But 1 + 1 isn’t always 2 in the commercial services and retail industry... 

Especially in case of (not) offering e-commerce possibilities to one’s customers, the answer to this question is not a question of black and white.

This is for the simple reason that offering an up-to-date e-commerce platform costs a lot of money per annum, but not offering an e-commerce platform could put a store chain or supermarket out of business, due to being obsolete, out of fashion and not in connection with its (future) customers anymore.

The number of people that goes to B&M stores is steadily declining and – to make things worse – real-life, offline shopping is turning into a generation thing: the older generation still mostly prefers visiting the B&M stores, while the younger generation prefers doing their total shopping online. So operating a B&M store alone and no omnichannel e-commerce platform, may get you stuck with an aging customer base and a bleak future in the end.

That is the diabolical dilemma of e-commerce today: losing money on your business or completely losing your business.

And this diabolical dilemma is not only the dilemma of small, online specialty stores (“mom & pop stores”) with a limited range of exclusive products, but also the dilemma of the largest online stores (Amazon, Zalando, and supermarket chains, like the one I am working for.

Especially the logistical issue (i.e. order collection and shipping) and cost-efficient e-commerce platform maintenance, in order to keep it up-to-date and customer-oriented, are almost impossible nuts to crack: for now and for the distant (?) future. There is no self-driving courier or robotized drone that will change this conundrum soon. And also no maintenance-free website that still features all your products and articles in a customer-friendly and topical way.

And that makes that the sheer profitability of e-commerce platforms and online stores will remain dubious in years to come. That is, until customers start to pay a fair price for collection and delivery of their ordered goods and stop returning so many of them.

But abolishing the online store is simply not an option, unless you only want to serve the elderly!

Saturday, 10 June 2017

Election gamble blows up in the face of British PM Theresa May. Or how settling for an insecure coalition cabinet with a stronger opposition could become a blessing in disguise for the UK as a whole.

British Prime Minister Theresa May of the conservative Tory party had it all figured out: with the extremely tough Brexit negotiations with the European Union ahead and with the Labour party, led by Jeremy Corbyn, seemingly flat on its back, it seemed like an appropriate time to organize national elections in the United Kingdom.

According to her plan, these national elections would act like a two-edged sword.  When she would indeed have the sound victory based upon an absolutely majority that she anticipated, she would acquire a stronger mandate with respect to the EU negotiations and it would also rub her adversary Jeremy Corbyn deeper in the dirt of his own incompetence, she figured.

With the Tories as absolute majority leaders in parliament and Labour lying in tatters, she would be energized to take the tough stance against the EU that she deemed necessary to carry out the best possible results from these negotiations.

Things went... a little different:

The Tories won the elections by a small and non-decisive majority of  58 seats (319 seats against 261 for Labour, according to the latest polls) and they saw Labour gain a quite impressive 29 seats, in comparison with the last elections.

When one takes into consideration that Labour under the “clumsey leader” Corbyn seemed a lost cause  and that May seemed on her way to a landslide victory only a few weeks ago, it is clear that things went horribly wrong for Theresa May.

And the remarkable thing is that neither the Brexit nor the terrible terrorist attacks of the last few months in the United Kingdom seemed the direct smoking gun, with respect to this strongly disappointing election result.

The terrorist attacks – terribly brutal and vicious as they were – were of course condemned by all parties and it was not that the policy of either the Tories or Labour would have led to a different outcome. Besides that, all three attacks (i.e. the two in London and the one in Manchester) were executed by people living in the UK for a long time or even all their lives, so even the most restrictive policy regarding immigration would not have stopped these terrorist attacks at all.

To put it even stronger: the perpetrators were perhaps all part of the United Kingdom’s colonial heritage and not a consequence of the unhindered immigration of the recent years.

And the Brexit was not even the elephant in the room in the prelude to the elections. As Bernard Hammelburg, the savvy Dutch correspondent for Foreign Affairs of BNR Radio stated (if I recall him correctly): “the Brexit itself as an event hardly played a role in the British elections. The Brexit was a thing from the past, upon which all the important, gamechanging decisions were already taken. It was especially the unclear economic outlook and the feeling that not all would be hunky dory within the British empire after all, that drove the people – especially the youngsters – towards Corbyn’s Labour party”.

BNR Newsradio Foreign Affairs journalist Bernard Hammelburg
Picture copyright of: Ernst Labruyère
Click to enlarge
Whatever the reason was: fact is that the whole plan of Theresa May to improve her position via these elections blew up in her face.

Instead of having an absolute majority of at least 326 seats, she ended somewhere south of 320 seats. In order to find a workable majority directly after the elections, May called in the help of a Northern Irish splinter group: the Unionist Democratic Party. This party is far more populist and conservative than even the Tories would like to endorse. Nevertheless, calling in the help of this party seemed the only way in which she could continue her governmental plans at short notice.

This means that due to this UDP party participation her hands could be tied with respect to all kinds of political hot potatoes, like the Brexit (the difficult choice between a soft and hard Brexit), the open border with Ireland, immigration and the economic development in all the countries within the United Kingdom.

And on top of that she seems to have lost the confidence of many youngsters in the UK, in favour of Labour with its leader that initially “nobody wanted” and that really nobody among the powers-that-be took serious in the beginning.

Corbyn was considered a basket case, with a totally outdated political view that came straight from the Eighties of last century: a political Catweazle [Catweazle was the name of a fictious wizard from medieval times, who was transported to the 20th Century by a failed spell – EL]. 

But the tides have turned for both PM Theresa and Labour’s Jeremy Corbyn...

So what can Theresa May do, now it is probably not possible to maintain her tough stance against the EU (i.e. “a Brexit on our terms or else... no deal!”), as she is now stuck somewhere between the desires of a now very powerful Northern Irish splinter group, a strongly divided Tory party and a Jeremy Corbyn with much more power than before and with the momentum going his way?

Perhaps the best solution would be to grind off the sharp edges of her current Brexit-related policy by diluting it here and there with a dash of mildness and a spoon of compromise and humility. She knows that she has to take three totally different opinions into account (Labour, Tories and UDP) in order to get anything through the parliament in the coming years. 

She can’t always trust the hardliners within her own party for automatically voting in her favour, so she must be able to find a broader compromise than she did before.

In other words, she has to take Labour’s desires also into account to a certain degree and stick out a hand towards the man that she probably dislikes more than anyone else: Jeremy Corbyn. Will she be able to do that? Who knows?!

I think the best she can do, is creating a compromise that nobody loves, but nobody hates either. A compromise that is in the best traditions of Dutch politics with its outrageous number of (small) parties and its long, long history of coalition cabinets, that were always a difficult marriage between sense and emotion.

And probably, when Theresa May grinds off the sharp edges of her Brexit policy, the EU is also willing to abandon their plans to punish the UK for trying to leave the EU.

The toughest nut to crack will be the immigration issue, as well as the free traffic of capital, citizens and goods and services. However, even in these formerly non-negotiable areas of EU policy there might be a small opening.

Immigration already has turned into the hottest potato within the EU itself and the member states are already discovering that unlimited free traffic of citizens (i.e labour) has a series of serious drawbacks that cannot simply be ignored by the powers that be.

Politicians start slowly to discover that the EU citizens become more and more fed up by the EU’s neoliberal policy of the last thirty years, because it largely ignored the sense of security and financial / economic stability that almost every citizen requires, in order to have a decent living and raise a family in relative prosperity. That could mean a chance for the UK in the coming negotiations.

However, the most important factor will be whether Theresa May is able to sing a different tune or not? Will she be able to show the EU negotiators a little more humility than before, when she made it seem that she held all the cards and the EU leadership had to sing to her tune in the Brexit negotiations.

Even though the UK is still very much a stronghold in the financial and commercial services industry and not all financial companies are automatically choosing to leave London after the Brexit, May must understand that the UK still needs the EU more than the EU needs the UK after the Brexit. It is simple as that.

The UK is in my opinion quite vulnerable in the areas of agriculture, manufacturing and heavy industry, as well as the exports of manufactured goods, as the island cannot and will not be self-supporting in the coming years.

In some industrial areas, like the steel industry, the country still suffers from obsolete and hopelessly inefficient plants, that are no match for the cunning and efficient German industries or the heavily subsidized Chinese industries with their dumping of steel and other semifinished products. And nobody can eat or drink financial services alone.

So finding a viable and feasible compromise in the prelude to the Brexit can be a lifesaver for the UK in the end. The decision to start the Brexit can probably not be withdrawn without a massive British loss of face, but the way that it happens is very much in the capable (?) hands of PM Theresa May.

And then, this outcome of the elections, even though it will be a tough lump to swallow, could be a blessing in disguise: both for Theresa May and for the United Kingdom as a whole. And they can be a good chance for the EU to show a more friendly and humane face as well. 

A British mandate that takes the interests of more people into account is probably a better mandate in the end.