Facial Recognition Faceoff

Facebook has been resisting outside efforts to rein in its “faceprints” facial recognition initiative – and mostly losing.

I’ve blogged before about the concerns many people have about facial recognition technology, and the troubling implications of the technology being misused in the wrong hands.

Facebook would claim to be the “right hands” rather than wrong ones when it comes to the database of “faceprints” it’s been compiling over the past decade or so. But its initiative has run afoul of an Illinois biometric privacy law passed in 2008.

The Illinois measure, which prohibits companies from collecting or storing people’s biometric data without their consent, is one of the strongest pieces of legislation of its kind in that it also allows individual consumers to sue for damages – to the tune of up to $5,000 per violation.

And that’s precisely what’s happened.  A class-action suite was filed in 2015 by a group of Illinois residents, alleging that Facebook has violated the Illinois privacy law through its photo-tagging function which draws on a trove of “faceprint” photos to recognize faces and suggest their names when they appear in photos uploaded by friends on Facebook.

Facebook has vigorously resisted efforts to rein in its faceprint initiative, arguing that any such lawsuits should be dismissed because users haven’t actually been injured by any alleged violations of the state law.

That stance has been rejected – first in U.S. district court and then in the court of appeals. Undaunted, Facebook appealed to the U.S. Supreme Court which turned down the appeal in late January.

Rebuffed at all legal levels, Facebook has now decided to settle the suit for a reported $550 million, including payments of ~$200 each to claimants in the Illinois class-action suit.

Facebook has lost, but the whole notion of facial recognition technology could well be like playing a game of whack-a-mole. As it turns out, another firm has developed similar functionality and is busily selling facial recognition data to police departments across North America.  According to a recent investigative article publishing in The New York Times, a company called Clearview AI has mined billions of photos from Twitter, Facebook and other social platforms.  (Clearview is now being sued in Illinois for allegedly violating the same biometric privacy law that was at the center of the Facebook suit.)

And indeed, the efforts to rein in facial recognition activities may be a little too little, a little too late: According to a recent report from Business Insider, the faces of more than half of all adults in America have already been logged into police or government databases.

… Which brings us to a parallel response that appears to be gaining traction: figuring out ways to fool facial recognition software.  A number of entrepreneurs are developing intriguing methods to beat facial recognition software.  Among them are:

  • Clothing designers have begun to target weaknesses in the ability of facial recognition software to process overlapping or unusual shapes, as well as deciphering multiple similar images appearing in close proximity. One such example is a pair of goggles fitted with near-infrared LEDs that interfere with the ability to scan facial features.
  • Headscarves decorated with different faces “confuse” the software by overloading it with excessive amounts of data in the form of numerous facial features.
  • So-called “adversarial patches” – a graphic print that can be added to clothing – exploit the vulnerabilities in facial recognition scanning by making a person “virtually invisible for automatic surveillance cameras,” according to creators Simen Thys, Wiebe Van Ranst and Toon Goedemé.

Will the two-front attack on facial recognition technology from the legal as well as technology standpoint succeed in putting the facial recognition genie back in the bottle? It’s debatable.  But it’s certainly making things more of a challenge for the Facebooks and Clearviews of the world.

Hot-desking on the hot-seat.

“Few aspects of office life are more dispiriting than hot-desking — the penny-pinching ploy that strips people of their own desk and casts them out to the noisy, chaotic wasteland of shared work spots.” 

— Pilita Clark, Correspondent, Financial Times

I’ve blogged before about so-called “open office” layouts and how they’re disdained by many employees. But even with all of the unpopularity of open office layouts, there’s another office concept that appears to be even more despised: “hot-desking.”

Hot-desking is a concept that came into being more than a decade ago, and it takes the idea of “open offices” a step beyond. It’s a design in which workers are not assigned to a regular desk or cubicle, but instead find whatever desk is available to them on any given day.

If you read the literature from five or ten years ago, you’ll see all manner of compelling reasons being proffered as to why hot-desking is a worthwhile concept. One rationale is that hot-desking fosters “agile working” and more collaboration among employees — at the same time making communications between workers more effective and thereby enhancing the exchange of information.

Reading those advocacy pieces, there are numerous references to employees finding hot-desking to be “liberating,” “motivating,” “energizing,” and so forth.

Advocates of hot-desking appear to equate it the practice of working “wherever” — just to long as the work gets done. “Wherever” can mean at home, in coffee shops, or anywhere around the office.

If all this seems a little too neat and tidy, the your suspicions are warranted. Because some observers are onto the real reasons companies adopt hot-desking work environments — which is to save on office space and its associated costs.

Is it any wonder that hot-desking is promoted by top executives, finance and facilities management personnel more than any others?

Alison Hirst, PhD, a research specialist at Anglia Ruskin University in Cambridge, UK, who has experienced hot-desking personally, clues us in on what’s actually happening. She spent three years carefully studying one organization that moved to a hot-desk environment:

“Like many companies, it had switched to hot-desking to reduce property costs and enable precious office space to be used flexibly. In the language of facilities management, an office building can be ‘crunched’ by increasing the staff-to-desks ratio, and it can be ‘restacked’ as teams and departments are moved around like boxes.

But in this bid for cost-cutting, a number of employees are made to feel underappreciated at best and unwanted at worst. There is often a subtle division between those who can ‘settle’ and reliably occupy the same desk every day, and those who cannot.”

In Hirst’s observations, “settlers” are able to arrive at the office early choose their preferred desk. By repeating their choice over time, it effectively establishes this desk as “their” space — whether it be because of its preferred location near to windows, or near to their closest colleagues.

Those who cannot arrive sufficiently early — such as part-time employees or those with childcare responsibilities — are left to hunting around for a suitable workspace, often far removed from the colleagues with whom they need to work most closely.

Last year, business author and journalist Simon Constable penned an opinion piece for Forbes with the provocative title “How Hot-Desking Will Kill Your Company.” In it, Constable contends that for most companies, the drawbacks of hot-desking vastly outweigh any benefits. Constable, who also has personal experience working in a hot-desking environment, makes these salient points:

Hot-desking signals that employees don’t matter — companies like to say that their employees are their single best asset. But when an employee isn’t even offered a permanent desk, it sends a completely opposite message.

Super-quick meetings won’t happen — Brief impromptu meetings are a vital part of office efficiency. In concentrated work environments with relevant teams of employees, such micro-events are important but don’t interrupt much of the workflow because of the proximity of the workers involved. If having short 3- or 5-minute meetings will require summoning people from all over the building, that super-quick meeting will soon become a frustrating 15 or 20 minutes, eating away at productivity. Which means they’ll rarely happen at all.

Inefficiencies add up quickly — The combined total costs of small-but-incremental negative effects adds up. The larger the office, the worse the impact is likely to be.

Rank hypocrisy — Employees notice that many of the biggest advocates for hot-desking are the people who have dedicated desks for themselves — and often their own individual offices with doors. “Hot-desking for thee but not for me.”

Fortunately, I work in a small office where everyone is not only locationally proximate, we even have walls and a door for when privacy is needed for meetings or concentrated creative/copywriting time without distractions. Closed-door activities may only happen once or twice per week, but they increase work efficiencies. I consider our situation fortunate not to be forced into open-office or hot-desking scenarios.

What are your thoughts on the hot-desking concept? If you have personal experiences, please share them with other readers here.

Amazon: Where utilitarian products deliver stellar results.

In the era of e-commerce, year after year the growth and financial success of Amazon continues to be noteworthy — seemingly impervious to economic downturns or volatility.

What’s the secret sauce?

The answer is interesting. It isn’t that Amazon dominates any particular product category. Rather, it’s the kind of product — “utilitarian” — that cuts across many categories.

From cellar to stellar: Amazon shares’ incredible run.

Utilitarian products tend to be practical, generally inexpensive or downright cheap … and typically carry little risk associated with making a regretful purchase choice. They aren’t the type of products that inspire brand affinity, and they typically don’t require very much in the way of pre-purchase research on the part of buyers.

Moreover, on Amazon these utilitarian products have an equally utilitarian path to purchase. Purchase “journeys” — such as they are — are straightforward. Often they begin and end on Amazon’s site, with few or no deviations to conduct research or compare brands.

This is where Amazon excels — in nudging shoppers down the sales funnel while giving them no reason to go away from the website. Amazon makes the purchase steps quick, effortless and satisfying — and probably easier to complete than anyplace else online. If there is a more elegant purchase procedure out there in cyberspace, I have yet to find it.

And if some shoppers might wish to do a little more product evaluation, Amazon makes that possible as well, with consumer reviews offered right on the site for quick and easy evaluation and validation.

Of course, there are certainly product categories that aren’t particularly “utilitarian” in nature, and this is where Amazon’s model is a little less effective. A category such as women’s apparel is more brand-specific and brand-driven, and the purchase journeys in that realm are typically more longer, more circuitous, and more discovery-focused.

But Amazon has effectively carved out a niche in so-called “basic” products to the degree that it has become the “go-to” destination for thousands of products that are “common” in every sense of the word — resulting in some very uncommon business and financial results for the company.

Closed-loop manufacturing: Practicality or pipedream?

Some of today’s more “socially aware” companies like to talk about becoming a closed-loop manufacturer. The topic seems particularly prevalent in the electronics industry, where generally higher profit margins may make it easier to actually accomplish such a challenging goal.

The most recent example of this is Apple. One of its key strategic objectives is to bypass the mining industry as much as possible by “mining” instead the innards of its customers’ discarded electronic devices.

Apple does quite a bit of this activity already, as it turns out. In 2018, the company reported that it refurbished nearly 8 million of its devices — thereby helping to divert nearly 50,000 metric tons of electronic waste from landfills.

But now it’s doing even more. Apple has developed a robot that is engineered to disassemble electronics. The robot, dubbed “Daisy,” is able to disassemble 1.2 million devices per year, retrieving 14 types of minerals for reuse. There are now multiple locations in the United States which can receive discarded Apple iPhones for disassembly and closed-loop manufacturing.

Of course, Apple’s lofty objective isn’t without its critics. Some note that Apple eschews the idea of manufacturing devices that can be repaired, rather than merely recycled. Others rebut the idea, noting that advancements in electronics make it unrealistic that the life of any single Apple device would ever extend longer than single-digit years.

Still others doubt that Apple will ever succeed in becoming a true closed-loop manufacturer. Kyle Wiens, who heads up iFixit, a firm that advocates for electronics repair versus replacement, is one such detractor. Says Wiens, “There’s this ego that believes they can get all their minerals back — and it’s not possible.”

What are your thoughts about the potential of closed-loop manufacturing and the Apple experience? Feel free to share your observations with other readers here.

Yet another challenge for publishers: Subscription fatigue.

As if it isn’t enough that newspaper and magazine publishers have to compete with an ever-widening array of information providers, in the effort to migrate subscription revenues from print to digital these publishers are squaring off against an additional challenge: subscription fatigue.

Not every consumer is opposed to paying for media, but with so many fee-based streaming services now being offered — including the ones by powerhouses like Netflix and Spotify — trying to get people to focus on “yet another” resource is proving difficult.

Moreover, when it comes to news information sources it’s even more challenging. According to a recent Digital News Report prepared by Reuters Institute, when given a choice between paying for news or paying for a video streaming service, only ~12% of respondents in the Reuters survey stated that they would pick the news resource.

It seems that with so many time demands on people’s online activities, fewer are willing to pay for access to information that they don’t wish to commit to consuming on a regular basis. Unlike most of the entertainment streaming services, news stories are often available from free sources whenever a consumer might choose to access such news stories. Those alternative news sources may not be as comprehensive, but i’s a tradeoff many consumers appear willing to make.

This is hurting everyone in the news segment, including local newspapers in smaller markets which have faced a major falloff in print advertising revenues.

Underscoring this dynamic, more than 1,800 newspapers in the United States have closed their doors in the past 15 years. Today, fewer than half of the country’s counties have even one newspaper within their borders. This fallout is affecting the availability of some news information, as local media have a history of covering stories that aren’t covered elsewhere.

But it’s yet more collateral damage in the sea change that’s upended the world of newspapers and periodicals in recent years.

More findings from the Reuters Institute report can be accessed here.

The “bystander effect” and how it affects our workplaces.

Here’s an interesting view into human nature: Experience tells us that far more people will pass a disabled motorist on a busy highway without bothering to stop, compared to stopping for a person stranded on a lonely country road.

This phenomenon creeps into the business world, too — and particularly in a situation which some of us have probably experienced at least a few times during our careers: There’s someone at work who is clearly deficient in their job. Worse yet, the deficiencies aren’t due to incompetence, but to undesirable character traits like sloth, a sour attitude, deficient interpersonal skills — or even questionable ethics.

Moreover, the behavior of the individual falls in the “everyone knows” category.

The question is, what happens about it? Too often, the answer is “nothing.”

Social scientists have a name for this: the “bystander effect.”   It means that “what’s everybody’s business is nobody’s business.”

In mid-2019, several researchers at the University of Maryland studied the topic by fielding several pieces of research. In a first one, nearly 140 employees and their managers working at a Fortune 500 electronics company were surveyed.  That survey found that employees were less apt to speak up about problems they perceived to be “open secrets.”

Two other components of the field research – one a survey of 160+ undergraduate students and the other a study involving behavioral experimentation with nearly 450 working adults – found essentially the same dynamics at work.

According to the University of Maryland research study leaders, Subra Tangirala and Insiya Hussain:

“In all three studies our results held even when we statistically controlled for several other factors, such as whether participants felt it was safe to speak, and whether they thought speaking up would make a difference.”

The inevitable conclusion? Tangirala and Hussain reported:

“Our research shows that when multiple individuals know about an issue, each of them experiences a diffusion of responsibility — or the sense that they need not personally take on any costs or burden associated with speaking up.

They feel that others are equally knowledgeable and, hence, capable of raising the issue with top management. As issues become more common knowledge among frontline employees, the willingness of any individual employee to bring those issues to the attention of top management decreases.”

Sadly, the University of Maryland research shows that the “bystander effect” is the perfect recipe for companies to keep loping along without making HR changes — and not realizing their full potential as a result.

There’s another downside as well:  If left unaddressed, festering issues involving “problem” employees can engender feelings of frustration on the part of the other employees — along with the sense that an underlying degree of fairness has been violated because of the efforts the other workers are making to be productive employees. Unfortunately even then, no one wants to be the person to blow the whistle.

More detailed findings from the University of Maryland research can be accessed here.

What about your experiences? Have you ever encountered a similar dynamic in your place of work? Please share your insights with other readers.

A Marketer’s Resolution for the New Year

Note: Those of you who are regular readers of my marketing and culture blog have noticed that it “went dark” for a period of time over the past month or so.  The twin developments of health issues plus a death in the family (my mother, at the age of 96-and-a-half years), meant that I needed to be focused on recuperation and also estate matters.  But I’m back … and hopefully back to my regular schedule of posting.

For my final blog post of 2019, it comes in the form of a resolution for us marketers. It’s to finally acknowledge how little “upside potential” there actually is for social media to build or maintain a brand presence … and instead to place renewed focus on tactics that’ll actually deliver a more measurable ROI.

Most of my business clients have put a degree of effort into social media over the years – some with more focus and fortitude than others. But whether the campaigns have been “full speed ahead” or only half-hearted, invariably the end-result seems to be the same:  a sales needle that hardly moves, if at all.

Moreover, social media takes a deceptively significant amount of effort for that little bit of payoff. Companies that put in the effort devote human capital and in some cases substantive dollar resources to tap outside support, but frequently the results aren’t any more impactful than for our clients who merrily go on ignoring social medial platforms, year after year.  At least when looking at bottom-line sales.

Plus, in our highly sensitized world, these days it seems that when social media actually has an impact, more often than not it’s a negative one.  Too often it’s the sorry end-result of some sort of faux pas where even the best-laid plans for departmental or legal review aren’t carried out fully and the brand gets into trouble. (Sometimes that happens even with all of the checks and balances in place and being carried out religiously.)

So for 2020, we marketers could well be better off acknowledging how thin the promise of social media actually is.  We should ignore the siren calls of “likes” and “engagement” and stop chasing the phantom pot of gold at the end of the phantom rainbow. Chances are, your company’s bottom line will look just as strong, even as you focus more of your time and budget on marketing activities that’ll actually make a positive difference.

What are your thoughts on social media for brands? Please share them with other readers here.

When it comes to smartphone capabilities … buyers want the basics.

With the plethora of smartphone models that seem to be released with ever-increasing frequently these days, one might think that the innovative features being added to the new smartphone models would be in high demand.

After all, the demand for smartphones looks as though it’s unquenchable; quarterly shipments of smartphones numbered some 366 million devices during the 3rd quarter of 2019 alone, according to data compiled by business consulting firm Strategy Analytics.

But the reality appears to be quite different. Recently, technology market research firm Global Web Index studied the popularity of various smartphone features, looking at a large sample of more than 550,000 consumers in the USA and UK.

As it turns out, the most desired smartphone feature is long battery life. And in fact, the top four smartphone features in terms of consumer importance don’t look like anything particularly jazzy:

  • Battery life: ~77% consider it the most desired smartphone feature
  • Storage capability: ~65%
  • Camera picture quality: ~62%
  • Screen resolution: ~48%

At the other end of the scale are four features which aren’t animating the market in any great way:

  • 5G compatibility: ~27%
  • Biometric security features: ~27%
  • Digital wellness features: ~16%
  • Virtual reality capabilities: ~10%

There’s no question that the newest smartphone models can do a lot more than their earlier iterations. But users want them to do the basics — and to do them well. Other capabilities are simply ornaments on the tree.

For more findings from the Global Web Index study, click here.

Amazon is poised to become America’s single biggest retailer, outpacing Walmart.

It’s a measure of how much the American retail landscape has changed in the past decade that Amazon is poised to overtake Walmart as the largest U.S. retailed by 2022.

That prediction comes from a recently published report from market research firm Packaged Facts.

As of today, Packaged Facts estimates that Amazon makes up ~43% of all U.S. e-commerce sales, which is dramatically higher than its ~28% share just four years ago. Continuing its growth trajectory, by 2022 Amazon is expected to make up nearly half of all U.S. e-commerce sales.

That degree of concentration will make it bigger than Walmart — even considering the latter’s huge brick-and-mortar presence which Amazon lacks.

Of course, Walmart continues to possess additional advantages that Amazon cannot match, despite the latter’s acquisition of supermarket chain Whole Foods in 2017. Not only does Walmart have a huge physical footprint in retail, it also offers a wide range of in-store services which entice foot traffic — things like an onsite pharmacy, financial services, and photo processing.

Also working in Walmart’s favor is its dominance in so-called “click-and-collect” shopping orders. According to recent surveys, ~43% of respondents identified Walmart as the pickup location for their last click-and-collect order — three times the share percentage of runner-up Target.

Still, the emergence of Amazon atop the retail industry heap says volumes about the seismic shifts brought about by online retail. The channel hasn’t been around all that long in the grand scheme of things, but its impact has been nothing short of seismic.

How have your shopping habits changed during this time? Do they reflect what has happened in the larger market? Please share your thoughts with other readers here.

A Strong Job Market and the “Gig” Economy

The two don’t go together very well.

It wasn’t so long ago that the so-called “gig” economy was all the rage. In the early 2010s, with a sizable portion of companies being skittish to commit to hiring full-time workers due to fresh memories of the economic downturn, many workers found opportunities to make money through various different gig economy service firms — companies like Uber, Lift, Postmates and others.

What those jobs offered workers were flexible schedules, reasonably decent pay, and the ability to cobble together a livelihood based on holding several such positions (while still being able to hunt around for full-time employment).

For employers, it was the ability to build a workforce for which they didn’t have to cover things like office expenses and various employee benefits — not to mentioning paying for payroll taxes like the employer social security contribution.

In the past few years, the environment has changed dramatically. With national unemployment hovering around 3.5% — and lower still in many larger urban areas — “gig” companies have found it more difficult to find workers.

What’s more, those workers who are hired are churning through the companies more even more quickly than before — many staying with these jobs for just a few months.

Tis is driving up worker recruitment costs to their highest levels ever.

In a May 2019 interview with The Wall Street Journal, Micah Rowland, COO of Fountain, a company that helps gig companies acquire new workers by streamlining the hiring process, puts it this way:

“It [strikes] me that in some of these markets, they’re processing thousands of job applicants every month — and these are not large cities.”

In Rowland’s view, gig companies in some markets may be burning through the entire available labor market of people willing to work in roles of this kind.

It isn’t as though turnover rates aren’t high in other service sectors in the more “traditional” economy. In the fast-food industry, for example, turnover is running as much as 150% annually these days. But in the case of gig employment markets, it’s even higher — sometimes dramatically so.

With the tight labor market showing little sign of loosening anytime soon, it may be that we see some firms looking at “regularizing” employment for at least some of their workers. If it makes economic sense to hire some actual employees in order to curb recruitment costs, some will likely go that route .

There’s another factor at work as well. More of these gig economy workers are becoming more vocal about pushing back on pay and working conditions. Noteworthy examples have been recent protests by rideshare company workers in cities like Los Angeles and San Francisco.  Others have done the envelope math and have determined that once driver-owned vehicle costs of gasoline and depreciation are calculated against declining fares that have dropped below $1 per mile in some markets like Los Angeles and Minneapolis-St. Paul, workers’ effective wages are significantly less than even $10 per hour.

Picking up on these worker concerns, a number of activist groups are making gig economy companies like Lyft and Uber into a “cause célèbre” (not in a good way), but loud, polarizing detractors such as these tend to muddy the water rather than bring fresh new insights to the debate.

As well, one wonders if the activism is even needed; I suspect what we’re seeing now is a pendulum swing which happens so often in economics — where an equilibrium is re-established as things come back into balance after going a bit too far in one direction. In the case of the gig economy, the low unemployment rate in many regions of the country appears to be helping that along.