Fay Chen

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On November 20, 2016, Fay Chen commented on Is Nike the Next Big Tech Giant? :

Thank you for the wonderful insight into this amazing organization, Eric! As a huge Nike fan, I absolutely agree that they are not just transforming themselves into a tech giant, but also a social media provider. The way that Nike structures its business is testament to this – their matrix model divides the organization into activities (e.g., Running, Golf, Football) first, and geography second. The theory behind this is that people who are interested in that activity have more things in common than people who live closer together[1]. This has allowed Nike to build a compelling social media presence through its Nike+ community and apps. What I’ve found interesting through the last few iterations of the Nike Running app is that it has transformed from being a running tracker where you can share information on Facebook / Instagram, to a social media platform of its own account – in the latest versions, you can take photos and track your runs, just to share globally with the Nike+ running community, not merely as a link to other, more established, social media platforms.

I am curious to see how Nike deals with the opportunities and threats arising from wearable technology. Given the lukewarm customer reviews of the Apple Watch (and Nike’s collaboration), I am not sure that exiting the FuelBand market was the right long-term move. Further, I see Under Armour as a huge threat to Nike in the smart clothing space as UA doubles down on wearable fitness [2]. I wonder what Nike’s move in that space will be.

[1] http://fortune.com/2015/11/12/nike-ceo-mark-parker/

[2] https://www.wired.com/2016/01/under-armour-healthbox/

On November 20, 2016, Fay Chen commented on At Nordstrom Lines Just Aren’t Cool Anymore :

Thanks for the article! I see significant synergies between digitalizing the POS transaction and collecting improved customer data – allowing them to even better integrate the information they have from all parts of the business to ultimately serve the customer. Having a customer’s email, knowing what they’ve purchased now and historically, and even being able to track the very point in the store where the purchasing decision is made, are all data elements that will allow Nordstrom to continue to fulfill their customer promise “to provide a fabulous customer experience by empowering customers and the employees who serve them.” [1]

Like Yarden, I haven’t personally witnessed remote POS devices at Nordstrom, only at Nordstrom Rack. I would assume that long queues and the negative associations of those on customer conversion and experience are a bigger deal at Nordstrom Rack, which has a higher volume of sales. I will definitely be on the lookout for these devices at Nordstrom itself during this Thanksgiving holiday sale season!

[1] https://hbr.org/2015/01/why-nordstroms-digital-strategy-works-and-yours-probably-doesnt

Thanks for a great article! As an avid Flywheeler, your article made me think about why I keep returning and why I prefer it to so many of the other spin options out there. For me, the answer lies in how they’ve leveraged gamification and competition – something that sets them apart even today from SoulCycle, Barry’s Bootcamp, and the other competitors out there – seeing your name on the TorqBoard is a powerful thing!

An area where I think they can branch into is improved analytics of previous class performance. Taking inspiration from the Nike Run Club app, which not only shows you distance / calories / points burned from your run (something Flywheel’s existing app does), but also what time of day you’re likely to perform better, your fastest route in the city you’re currently in, and your cumulative mileage since downloading the app. Flywheel could do the same in order to increase their consumer engagement: do I burn more calories in morning or evening classes? Do I do better in the front row or in the back of the class? How many Torq-Points have I earned this month? Year? Of all time? Data nerds like me (and I assume, many Flywheel enthusiasts) would love increased insight from the data that Flywheel has. And for Flywheel, for customers who pay $35 a pop for one more data point, it’s a compelling value proposition…

On November 20, 2016, Fay Chen commented on Internet of Commercial Buildings: Changes at Johnson Controls :

An interesting tension that arises out of JCI’s digitization of its Building Efficiency business is the relationship between physical security and digitization. I can see how better, real-time information from systems allows for the more efficient use of energy, but what about the security considerations of this increased data being able to be accessed remotely? This is especially pertinent given JCI as a provider of facilities services to government buildings [1] – how will JCI ensure the provision of security services that this increase in data demands? Will it differ for different client’s security requirements? What are the cost implications of this? I am interested to see how the organization responds to these concerns.

[1] http://www.johnsoncontrols.com/buildings/solutions-by-industry/federal-government

On November 20, 2016, Fay Chen commented on Sephora: Bringing digital into brick & mortar stores :

Thanks for the great article! With these digital advances, Sephora has done a commendable job in keeping a unified, consistent customer experience through their website, apps, and brick-and-mortar store. With the GPS tracking of the app, every time I am close to a Sephora store, the app will notify me (and remind me of my beauty point balance), and I usually succumb to popping in!

While a major draw of visiting a physical store is the informed and bespoke in-person customer service, I believe that Sephora has done a commendable job in translating this onto their website, through free samples, a generous shipping and returns policy, and their famous online-only value packs. Recently, Sephora has even branched into using “chat-bots”, allowing customers to further engage customers based on their individual interests. This is something that really sets Sephora ahead of the pack – other beauty chains like Ulta and department store beauty departments should look to emulate what Sephora is doing.

Source: https://www.fastcompany.com/3064845/human-lessons-from-brands-using-chatbots

Thanks for writing about the GBR, Javi! Having grown up in Queensland, and visiting the reef over the last twenty years, it makes me sad seeing the gradual destruction of the reef and very conflicted over what the correct ‘next steps’ are to protect the reef.

I want to address the point that Saurav raised about pride and ownership – I can state definitively that Australians are concerned and proud of this great natural wonder that we have custody over, but the fact is that it contributes so significantly to our economy that it would not be feasible to limit all reef activity.

The contribution of the Reef to Queensland’s (and indeed, Australia’s) economy cannot be understated. For the Tropical North Queensland region, tourism accounts 91% and 93% of the region’s value-added and employment contributions to Australia respectively. [1] The region has been also hurting from other macroeconomic factors; the high Australian dollar has led to a recent slowdown in tourists from Asia. Limiting access to the reef would exacerbate this even more.

I am not sure what the correct next steps are – and I do not condone our previous government’s action in censoring this dialog, but it is a complex debate with very real economic factors in play. I just hope that it isn’t too late to save the Reef.

[1] https://www.environment.gov.au/system/files/resources/a3ef2e3f-37fc-4c6f-ab1b-3b54ffc3f449/files/gbr-economic-contribution.pdf

On November 7, 2016, Fay Chen commented on Wal-Mart: An Unexpected Leader in Sustainability :

While I applaud Wal-Mart for its sustainability measures, I fear that what they are doing is more for optics and baseline corporate social accountability than for true advocacy of more environmentally sustainable practices. This is, after all, the organization that was bottling water in California during the drought and only stopped after huge amounts of negative publicity and a public petition. [1]

And maybe this is okay – maybe we shouldn’t expect Wal-Mart to be able to be environmentally friendly, given (as you correctly articulated) the true nature of their business as a low-cost, big-box retailer. If not Wal-Mart, would it be another organization we are demonizing? Perhaps it is up to us as consumers to make the environmentally conscious stances through our purchasing decisions, as opposed to vilifying organizations like Wal-Mart for flourishing from our collective demand.

[1] http://fortune.com/2015/05/12/walmart-drought-water/

On November 7, 2016, Fay Chen commented on The Climate Change Opportunity for Deloitte Consulting :

I find it ironic that consulting firms, whose core business is based on a workforce that travels constantly (racking up frequent flyer miles and a significant carbon footprint) are now moving into the space of sustainability consulting. In conjunction to building external market offerings, Deloitte should also continue to focus on reducing the carbon footprint of its own business internally. While it is unrealistic to think that Deloitte, or any other professional services firm, could eliminate business travel, there are technological developments that can allow Deloitte to practice what they preach.

As a former employee, I believe that Deloitte is doing a solid job at this, recently linking it to the welfare of its staff through initiatives focused on telecommuting, more focus on videoconferencing and rotating project staff between being on-site and working remotely. By increasing this focus, Deloitte can demonstrate additional credibility in this area as they are, in Graham’s words, “prov[ing] to clients that Deloitte is the right firm to help solve these complex issues”.

On November 7, 2016, Fay Chen commented on Coal blows an ill wind :

Thanks for this thought-provoking read, Sander! Queensland is my home state and my biggest consulting client in Australia was, in fact, Rio Tinto. What struck me during that time was the significant emphasis they placed on trying to operate in an environmentally sustainable way, with huge amounts resources dedicated to ensuring the “sustainable stewardship of the environment”. In fact, I remember a time where I was at Rio Tinto’s Clermont mine where they shut down all operations for three days (forgoing ~40K BCM of overburden removal a day) because a koala was lost in the mining pit…

For this reason, I would argue that while it makes sense to limit coal consumption in developed areas, there is still a role for developed countries in mining and producing coal – operations in Australia will undoubtedly be more environmentally friendly, with long-term reclamation plans, compared to those in China. Furthermore, Rio Tinto is also a world leader in autonomous mining (less so for their coal, more for their iron ore operations) – this can also help to lessen the human impact that mining in a region does.

On November 7, 2016, Fay Chen commented on Reduced Snowpack in Washington State :

I think it is interesting that you bring up the sensitivity of Washington’s power supply to climate change factors. This issue is not one that is limited to the state’s borders; Washington state is currently a notable provider of IT data center services exactly because of its current availability of cheap electrical power. Over the last decade, organizations like Microsoft, Facebook, Amazon, T-Mobile, and Yahoo! have moved their data centers to the state , driven by significant tax incentives and low unit. Even the state itself has built data centers – meaning that Washington State itself is now a data center service provider! It will be interesting to see how the state responds – if at all – to these changing conditions, if the price of electricity starts increasing.

Sources: (1) http://www.nytimes.com/2012/09/24/technology/data-centers-in-rural-washington-state-gobble-power.html; (2) http://www.datacenterdynamics.com/content-tracks/colo-cloud/washington-state-government-becomes-data-center-provider/66317.fullarticle