Archimedes’ Hot Tub

I wrote late last year about Best Buy’s “omnichannel” strategy, which centers on using its stores as mini-distribution centers for its Web site. The strategy is supposed to help it fight off Amazon, which has an inherent cost advantage (in part because Amazon can lose money at will, as it did in quarters 2 and 3 this past year, without being punished by the stock market). Instead, its sales, including online sales, fell by almost one percent (overall retail sales were up 3.8 percent) during the Christmas season.  From this we can say a few things:
A) Opening on Thanksgiving Day is a turkey of an idea;

B) Retail continues to be a feeding frenzy for buyers of commodity consumer electronics;
C) Strategies often work better in theory.
Best Buy is still in the process of rolling out its omnichannel strategy. Perhaps if it were fully implemented it would have helped the company’s sales during the Christmas season. My guess is Best Buy will push forward with omnichannel and try desperately to find a way out of the discount wars. Having 1,000 distribution centers gives it reach Amazon doesn’t have, but also costs Amazon doesn’t have. If Best Buy has to beat Amazon on pure cost, it won’t happen. At least, not until Wall Street starts demanding a better bottom line from Amazon.

A sidenote: For my story I interviewed Scott Durchslag, Best Buy’s president of e-commerce, who turned out to have been a year behind me at the University of Chicago, and had gone to the same high school as one of my roommates. It’s possible I met him; Durchslag and I had similar majors and took the same famous prof for at least one course, though in different years. But neither of us remembered having met.

Gearing up for a trip to Panama, I stopped by my bank to get some travelers’ checks. I haven’t used them for years, but Panama likes people to be carrying a fair amount of cash, $500 apiece, when they arrive (Panama uses the U.S. dollar). With four of us going, I figured travelers’ checks were a good idea. The woman at Bank of America told me they haven’t sold travelers checks for years, and asked me if I have a debit card. I do, though I consider traveler’s checks safer, in an odd way (harder to hack, at least). And indeed, travelers’ checks are in sharp decline and have been for more than a decade, according to Travelers checks sinking beneath a sea of plastic in the LA Times in 2000, though back then American Express still sold more than $23 billion worth of them.

I can still get them from AAA, but I guess I’ll skip it. I’ve gone to Switzerland, the UK, Iceland, Germany and Ecuador in the last decade without getting them. Call me another nail in that financial instrument. They still feel like a better product — cash, but with protection. But there’s too much friction in the system.

Yesterday, January 7th, I went to see Cort Johnson, the bright and opportunistic co-founder of Terrible Labs, a design firm here in Boston. We had a pleasant chat, probably because Johnson wears slippers in the office. How can you be unpleasant when interviewing someone wearing slippers? As we were winding down, I ran across Terrible’s visitor book. I flipped it open and saw “Marty Walsh — Mayor. 1/7/14″

I showed it to Cort and asked if it was a joke. He said no, that Walsh came to a ‘meet the candidates’ forum at Terrible, where all the mayoral candidates in Boston got two minutes each to make their pitch to Boston’s tech community. Cort remembered that Walsh was late, and that it was really hot in the office — it happened to be June.

Walsh was the only candidate to sign Terrible’s guestbook (and the only person to sign it in the last six months, probably because it was buried under a couple of other books). He dated it six months in the future, and indeed the day after he was sworn in as mayor.

I signed the guest book “Michael Fitzgerald, Not Mayor. 1/7/2014.” Not saying I won’t be mayor of Boston some day, but it sure wasn’t true yesterday.

On Monday I went to interview Claudia Goldin, the wide-ranging economic historian who is best known for her work on the underpinnings of the gender gap in wages for men and women. What we started with was a lesson on the history of golden retrievers and Labrador retrievers, two very different dogs with similar names. That lesson was delivered spontaneously, as I was walking with Goldin to her office at the National Bureau of Economic Research. Unbeknownst to me, Goldin shows golden retrievers, and has a friendly and insistent fellow at her office. I knew going into this interview that Goldin was a sponge for information and we would cover a lot of ground. I did not expect a lesson in the development of divergent strains of dogs from the St. John’s Water Dog.

I spent the last quarter of the year reading and re-reading works for the 20th Century Narrative Reporting class that I taught at Harvard Extension. I worked in some fiction, but the only novel I read during that period was The Brothers Karamazov, which I had started reading well before the course started. My choice for a novel to read after the class was done approached irony: The Power and The Glory, a Graham Greene novel about a priest in Mexico on the lam from the socialist political power that wanted to suppress the Catholic church. The irony in it is that the novel came out of a reporting trip, from which Greene first wrote a non-fiction journalistic book, The Lawless Roads.

The Power and the Glory gives us a powerful look at human motivation, altruism and inconstancy. It also captures the clash between state and church. It draws on Greene’s experience as a journalist covering Tabasco, Mexico in 1938, when socialist revolutionaries in Tabasco largely succeeded in suppressing the Catholic church. Greene’s own ambivalence towards religion is captured in the whisky priest, who real love is his child, born out of a drunken moment. Yet this priest’s goodness, his holiness, comes out of his flaws, as Greene captures nicely. The book offers a similar theme to Karamazov, where evil and good exist in people and for most of us creates constant psychic struggle.