Black Friday, baggage fees, & the automobile supply chain

Yesterday, we talked restaurants. Today, we have a more random selections of topics.

Black Friday Sales. I am rather fascinated with how retailers manage the queue of waiting customers on Black Friday. Now the Feds are interested and regulation may be coming. The New York Times reports that Wal-Mart has been fighting tooth and nail to avoid a $7,000 OSHA fine related to the death of a worker who was tragically trampled in a stampede of post-Thanksgiving shoppers (Ruling Emphasizes Crowd Control by Retailers, Mar 29). The size of the fine is laughable, obviously, but the principle at stake is that OSHA or some other government entity might have the right to regulate how retailers manage the crowds that show up for large sales. OSHA has already been pushing some guidelines for dealing with crowds.

The guidelines suggest major changes to the first-come, first-serve way that many events are held. They say that retailers should “consider using an Internet lottery for ‘hot’ items”; use wristbands or tickets to designate those who have arrived early; and distribute pamphlets showing where sale items are located within the store.

I would point out that the Chicago Cubs run a lottery for their single game ticket sales. This would potentially kill the desire to hangout in a Wal-Mart parking lot at three in the morning. The real question is how it would impact the number of customers coming through the door.

Baggage fees. Always a favorite topic of mine. We have additional evidence (in case you somehow needed further convincing) that baggage fees actually impact customer behavior. Unfortunately, it is the TSA (and ultimately taxpayers) that are footing the bill (More Fees, More Carry-Ons, Mar 29, New York Times) while travelers get inconvenienced.

Now, the rising number of carry-on bags — the Transportation Security Administration estimated that there were 59 million more carry-ons in 2010 than the year before — has touched off a debate about just how much it costs to screen all the added bags, who should pick up the bill and whether airport security is being stretched too thin.

A report by the U.S. Travel Association, a travel industry trade group, concludes that security screeners cannot keep up with the deluge and contends that the repercussions range from the serious — diminished security — to the unpleasant — longer lines at the checkpoint.

The impact of the Japanese earthquake on global supply chains. The number of stories around this topic has gotten way beyond our ability to keep up with them. However, let me point to an Automotive News article suggesting that at least for the auto industry, getting Japanese suppliers back on line may not be the end of the story (Later: No capacity for surging demand, Mar 28).

Parts makers are girding for the second half of the year. They expect automakers to press hard to offset production lost due to parts shortages related to the Japan disaster.

Suppliers doubt they’ll be able to meet automakers’ production targets then.

“If the industry is going to run at a run rate that is substantially higher than where we’ve been, there will be capacity issues,” said Jeffrey Klei, president for NAFTA at Continental Automotive Divisions.

This points to the fact that the recession left US auto suppliers in fairly precarious shape and having production held up because of issues in Japan cannot be helping. On the other hand, tight supply may help car makers (at the expense of customers). The US firms have a track record of not being able to control themselves when they have a healthy supply of vehicles. While I am sure they would like to be selling more, they may also benefit from some enforced discipline.