Can You Trust That Five-Star Review?

There’s now a serious, ongoing effort to crackdown on fake online reviews. But especially with the advent of A.I. tools, the problem may be insurmountable.

Good Morning!

Here are today’s highlights:            

• Are you doing enough to capture customer data?

• Lots of smaller co-working spaces are rising as WeWork descends.

• Is it time to make sense of America’s environmental regulations?

• For a long time, Ireland was Covid’s biggest economic winner.

RETAIL

Gene Marks says that for retailers Black Friday isn’t just about sales: “Black Friday was the biggest day for in-store shopping in the U.S. in 2022, reaching 72.9 million consumers, up almost 15 percent year over year. But it’s just as important for after the holidays. That’s because Black Friday isn’t just about sales. It’s really about data. My smartest clients know this. And they make it a priority to leverage Black Friday as a way to collect as much information as they can from everyone entering their store. Why? Because the data they collect will help drive sales long after the holidays have ended.”

• “Retailers of all sizes face a significant drop-off in sales after the holidays, and it’s always a struggle to generate demand. But it doesn’t have to be that way. The data you collect from your Black Friday traffic can boost your sales in those slow winter months. So, how to do this? You need a reason for the customer to stay engaged.”

• “For starters, collect an email at checkout. Asking for a’ ‘like’ or a positive online review is great, but you’re not collecting data that way. Asking for an email is a way for you to control the engagement. It’s true that sometimes some won’t want to share, and that’s fine, too, because people have to opt in if you’re going to market to them online.”

• “So encourage them. Say that you’ll add them to your special ‘VIP Customer Club,’ which will make them eligible to receive future discounts and special promotions. Some retailers ask if a customer would like a receipt emailed, and that’s another good way to collect that information.”

• “Offer a special promotion for customers who choose to purchase products online or special products that are only offered online. When someone buys from you online, you’re collecting their data, and you can give them the option to have their email added to your VIP club at checkout. At the very least, you’ll be collecting physical shipping/ordering data that can be used for future postcard mailings.” READ MORE

REPUTATION MANAGEMENT

There’s been a crackdown on fake online reviews: “After Dr. Mark J. Mohrmann completed a successful orthopedic procedure in 2019, his patient turned to Yelp, the review website, to share his appreciation. ‘Dr. Mark made me feel that I was in safe hands,’ the patient wrote in a five-star review. Only the writer was not an actual patient, and there was no procedure. His review was fake — part of an effort to boost the online ratings for Dr. Mohrmann’s business using phony positive reviews, according to an analysis by Fake Review Watch, an industry watchdog. Last month, Dr. Mohrmann agreed to pay a $100,000 penalty to settle with New York’s attorney general on charges of deceiving the public with fake reviews.”

• “The fake review for Dr. Mohrmann is just one example of the billion-dollar fake review industry, where people and businesses pay marketers to post fake positive reviews to Google Maps, Amazon, Yelp, and other platforms, and deceive millions of customers each year. Fake reviews are as old as the internet itself, and they are illegal and banned by online platforms.”

• “Now, for the first time, a wave of regulation and moves by tech companies are coalescing in a more concerted effort to turn the tide. This summer, the Federal Trade Commission proposed a sweeping rule that would punish businesses for buying or selling fake reviews, among other restrictions. In October, several online platforms, including Amazon and Expedia, announced a coalition that would share information and resources among companies to combat review fraud.”

• “Almost all fake reviews are positive endorsements, like four-star and five-star reviews, that the businesses write themselves or are created by digital marketers, whose services can be purchased online for as little as a few dollars per review. Many deceptive marketers are based overseas, limiting the F.T.C.’s power to police the problem. And artificial intelligence tools, like ChatGPT, threaten to supercharge the industry by making the fake reviews easier to write, the agency warned.” READ MORE 

OFFICE SPACE

You can buy a security robot to patrol your business: “Amazon launched Astro for Business for customers in the U.S. today, a robot for sale for $2,349.99. It roves around autonomously or via remote control. It’s also equipped with an HD periscope camera with night vision and offers a 24/7 live view and two-way talk. Along with the robot, Amazon is also offering three different subscription services to help companies monitor their facilities.”

• “For $99 a month, its Virtual Security Guard subscription allows the robot to notify Ring’s Rapid Response agents after detecting an unfamiliar person, strange sound, or other activity it deems suspicious. Customers have to subscribe to Ring Protect Pro and Astro Secure to access Virtual Security Guard, and those subscriptions cost $20 and $60 a month, respectively.”

• “Ring Protect Pro lets users save the device’s footage for up to 180 days and sync up with Ring motion sensors and alarms. Astro Secure allows the robot to patrol autonomously, moving along routes users customize themselves. Astro can also send alerts to the user and autonomously head over to triggered sensors to check out what’s happening.” READ MORE

WeWork is in bankruptcy but that doesn’t mean co-working spaces are dead: “Millions of white-collar workers are going to their employers’ offices a few days each month. When they work remotely, a significant number of them want a ‘third place’ between work and home. This fresh crop of co-working spaces doesn’t look much like WeWork, as workers choose day passes to fire up laptops from a coffee shop or private clubs with good Wi-Fi. Gyms are co-working spaces now, too, as they seize the business opportunity.”

• “Co-working spaces located outside downtown areas appeal to workers who don’t want to commute. Smaller local competitors to WeWork, which charge lower rates, have proliferated in residential and suburban areas of cities, as workers launch their own businesses and cling to the work-life balance they struck during the pandemic.”

• “Other WeWork rivals, including IWG and Industrious, recently reported strong earnings and revenue growth as demand for short-term office space continues to come from freelancers, entrepreneurs, tech-startup founders, and hybrid or fully-remote workers.”

• “New co-working spaces are learning from WeWork’s mistakes by offering cheaper prices, more premium or personalized experiences, and catering to specific demographics like people who have turned their side gigs into full-time solopreneur ventures with unique locations.” READ MORE

Even the government is looking to dump office space: “The federal government could cut up to 30 percent of its office space nationwide, saving taxpayers $60 billion in a decade alone. That's according to General Services Administration chief Robin Carnahan, who testified on Capitol Hill Tuesday. ‘GSA is laser-focused on right-sizing the federal footprint,’ Carnahan told the House Committee on Oversight and Accountability. ‘This is an important moment for the American people to reap billions of dollars in future savings.’”

• “​​The projections could have serious repercussions on the Greater Washington office market, where the federal government has 47 million square feet of owned space and 44 million square feet of leased space. The local office market is already suffering from record vacancy rates, and pruning the federal footprint would only make matters worse.”

• “The new 30-percent estimate comes as the agency has gotten a clearer picture of how hybrid work spurred by the pandemic will change the federal government's real estate needs long term. Carnahan said that the work has already begun: Last week, the GSA announced that 23 properties totaling 3.5 million square feet are slated for disposal, estimated to save $1 billion over a decade.”

• “Among disposals were several properties that have, for years, sat empty but on government books, including the historic former Daniel Webster School at 940 H St. NW and the Nebraska Avenue Complex at 3801 Nebraska Ave. NW in AU Park.” READ MORE

REGULATION

Opinion: It may be time to rewrite America’s environmental regulations: “If we want to get America building again, we can't just tinker around with ‘permitting reform’ or faster paperwork. The moment demands a bigger, more sweeping fix. It has to take into account essential new priorities, cut across warring jurisdictions, and move projects forward with the appropriate urgency. To construct the stuff we need to actually save the environment, we have to do something unthinkable. We have to demolish our existing environmental laws — top to bottom, federal to local — and replace them with something better.”

• “Call it the National Ecosystems Conservation Act. NECA would continue to vigorously safeguard the environment against pollution and degradation. It would protect grand open spaces and the creatures that live in them from abuse. It would prevent and punish dangerous pollution, especially in vulnerable communities and vulnerable places. Proposals for new projects would still have to show that they aren't harmful.”

• “But NECA would start by requiring policymakers, right from the start, to define the kinds of projects that are actually beneficial for the environment, and prioritize building the things that make that happen. Freeways, oil wells, incinerators, slaughterhouses? Put them through the regulatory wringer. Solar panels, power lines, more efficient urban housing? Take a hard look, but do everything you can to get them up and running, pronto.”

• “NECA would also limit the power of courts to review individual projects. Right now, courts have way too much power in determining how environmental laws get implemented. For clean-energy projects, they often wind up deciding to do something called a ‘hard-look review,’ which pretty much grinds everything to a halt.” READ MORE

THE ECONOMY

More good news on inflation: the index that matters most to business owners just fell unexpectedly: “Wholesale prices in October posted their biggest decline in 3½ years, providing another indication that the worst of the inflation surge may have passed. The producer price index, which measures final-demand costs for businesses, declined 0.5 percent for the month, against expectations for a 0.1 percent increase from the Dow Jones consensus, the Labor Department reported Wednesday. The department said that was the biggest monthly decline since April 2020. On a yearly basis, headline PPI posted a 1.3 percent increase, down from 2.2 percent in September.”

• “The report comes a day after the Labor Department said the consumer price index, which measures prices for goods and services at the consumer level, was unchanged in October from the previous month.” READ MORE

INTERNATIONAL

Ireland was Covid’s biggest economic winner: “It was one of very few economies to get a boost from the Covid-19 pandemic. That unusual dividend is now unraveling, in a fresh blow to Europe’s already weakened growth outlook.  Home to large U.S. technology and pharmaceutical companies that saw their sales boom during the pandemic, tiny Ireland recorded annual growth of 10.5 percent on average between 2020 and 2022 while other economies contracted under the effect of lockdowns. No other country grew as fast during this time apart from smaller Guyana, which enjoyed an oil boom. For Ireland, the Covid-induced spurt crowned a decade that saw the country’s economy double in size while the rest of the eurozone grew by 13 percent.”

• “Now that boom has run its course. By the end of the third quarter, Ireland’s economy was 4.7 percent smaller than a year earlier, the largest decline recorded by any European country over that period. According to the Economic and Social Research Institute, the country’s leading think tank, the economy is on course for its largest annual contraction since 2009.”

• “Some U.S. businesses that record profits in Ireland don’t make or sell much there. Many pharmaceutical and medical equipment companies commission factories in China and elsewhere to make products for sale in the U.S. and other countries. The profit, meanwhile, is recorded and taxed at a comparatively low level in Ireland, where those companies own their patents.”   

• “The value of such exports attributed to Ireland surged during the pandemic, from 16.8 billion euros in the first three months of 2020, equivalent to around $18.2 billion, to €46.1 billion in last year’s fourth quarter, before falling sharply in the first six months of this year.” READ MORE

OBITUARY

Joe Sharkey, a New York Times columnist who offered advice to business travelers and survived a mid-air collision: “Mr. Sharkey was returning home from a freelance assignment for Business Jet Traveler magazine on Sept. 29, 2006, a Friday, when the jetliner clipped a wing and the tail of the Embraer Legacy 600 that was carrying him, four other passengers, and a two-man crew at 37,000 feet over the Amazon rainforest. The executive jet managed to land safely at a remote military airport, but the Gol Linhas Aéreas commercial airliner it collided with did not have such a fortunate fate: It nose-dived to the ground, killing all 154 people on board. It was the deadliest civilian aviation accident in Brazil at the time.”

• “Mr. Sharkey had been writing the weekly ‘On the Road’ column for The Times’s business-travel pages when he turned in a vivid first-person account of the collision. It vaulted him onto the front page the following Tuesday under the headline ‘Colliding With Death at 37,000 Feet, and Living.’”

• “‘Without warning, I felt a terrific jolt and heard a loud bang, followed by an eerie silence, save for the hum of the engines,’ Mr. Sharkey wrote. ‘And then the three words I will never forget: We’ve been hit, said Henry Yandle, a fellow passenger standing in the aisle near the cockpit of the Embraer Legacy 600 jet.’”

• “Mr. Sharkey’s weekly columns, filled with personal insights, were popular for offering practical strategies to make business travel, by any means of transportation, more convenient. He compared the advantages of taking Amtrak with those of booking short flights in the Northeast Corridor; reported that more budget-strapped companies were making employees share hotel rooms; wrote about efforts by cruise ship lines to woo business travelers; and gave tips on how to breeze through airport security.” READ MORE

THE 21 HATS PODCAST 

Start Up, Throw Up, and Grow Up: This week, Dana White drops a few surprises. When we began this podcast in 2020, Dana had two promising hair salons in Detroit that she’d named after her grandmother, Paralee Boyd. She had an innovative business model designed specifically for women with thick and curly hair. And she was on her way to winning a prestigious business plan competition. All of which presented her with a wide array of opportunities to consider. Would she continue to bootstrap? Would she franchise? Would she take on an investor? Would she open salons on military bases? But the pandemic hit her hard.

• “Struggling to find both employees and customers, she eventually decided to close her Detroit locations and open a new one in Dallas, Texas, where she hoped the greater population density would help her make a fresh start. But in this episode, Dana tells Jay Goltz and Laura Zander that she’s come to a painful realization: “Paralee Boyd is not working.”

• You can subscribe to the 21 Hats Podcast wherever you get podcasts.

Thanks for reading, everyone. — Loren