The Internet revolution will allow people to go from an "asset-heavy" to "asset-light" lifestyle, with sweeping ramifications for business, according to a state-of-the-Internet presentation from investor Mary Meeker.
All you need for many situations is the clothes on your back and a charged mobile device, says the venture capitalist and partner at Kleiner Perkins Caufield & Byers. Digital media replace albums, CDs, and DVDs. Sharing services like Airbnb and Couchsurfing can replace dedicated hotel buildings. Instead of owning a car, people can use car-sharing services like Zipcar, Uber, and Hailo. Even full-time employment is replaced by freelancing.
The digital revolution will allow consumers to get what they want, when they want it, and make it easier for "crafty and flexible people" to make money, Meeker says in her Dec. 3 presentation, posted to SlideShare and embedded on the next page of this blog post.
If this is true, it's a huge deal for businesses that are in the business of selling stuff -- retailers, construction companies, car manufacturers, and all the B2B companies that are in the supply chain serving them.
It's also potentially a huge deal for lifestyles and the environment. We've all seen reports on how much Americans consume and own (a lot) compared with the rest of the world (less). Our houses alone are much bigger than houses in the rest of the world. The Internet might be balancing that out a bit. Or it might all be just a blip. Ask me again in another decade.
There are plenty of other meaty ideas in Meeker's presentation. Such as:
Using new forms of access, people will be able to fill in the "white space" now disconnected from the Internet, including car travel: 52 minutes per day by 144 million Americans, 76 percent of whom travel alone, Meeker says. Another white space: three hours daily spent in front of TVs. As a forerunner of this change, some 50 million America households have Internet-enabled TVs.
New Internet technologies mean big changes for business, of course. In the latest example, mobile devices and tablets accounted for 24 percent of online shopping on Black Friday in 2012, versus 6 percent two years ago.
But business is struggling to catch up, in some ways. For example: Ad spending. While consumers spend 10 percent of their time with mobile devices, mobile accounts for just 1 percent of ad spending, a $20 billion US opportunity. The lag in overall Internet ad spending is much smaller: Advertisers spend 22 percent of their budgets on Internet ads, while consumers spend 26 percent of their time online.
On the other extreme, consumers spend 7 percent of their time on print, but advertisers spend 25 percent of their budgets on that medium.
I wouldn't trust my ebooks to Amazon, or any other individual cloud provider, either.
I would not consider an ebook to be one I own unless it's DRM-free, and stored redundantly on multiple devices, including once or twice in the cloud. It also needs to be on a futureproof technology -- PDFs, for example, might not be readable in 25 years.
Fortunately, all three of these goals are achievable. My ebook library is 100 volumes (woo-hoo!) and my library of print books is shrinking as fast as I can sort through them, put aside the few I want to keep, and give away the rest.
I am with you there, Kim. I do not believe EVERYTHING should be virtual. I am a hard-bound book lover as well. My point with Amazon was their ability to deliver books at a lower processing cost.
You are right, there always will be physical things of value. The good part about the new options should only be to have more choice, which can increase the value to both consumers and business.
We seem to be "anchored" in the idea that to have access to something we have to own it; which is an idea that is changing. The old idea that to have access to technology you had to buy hardware/software has evolved to a system of access. No one owns the internet in order to use it, we access it and what we need. Now we are even further adjusted to becoming untethered from PC's and are accessing through tablets, smartphones, and mobile devices.
When we truly recognize how much we are consumed by managing the physical assets, we will begin to appreciate the freedoms that come from creating value; whether in personal or business settings. Look what Amazon accomplished with new models of distribution without the cumbersome inventory systems.
On personal consumption, when we are free to access what we need, we won't need to buy as many physical assets, with the maintenance requirements, but can more enjoy what we need and want. That could be a good thing!
We've talked about self-driving cars here, and some people expressed concern it would take away their freedom. For me, it's owning the car that reduces freedom; you have to maintain it and insure it and gas it up and worry about it being stolen or vandalized. Better to just rent a car, if you're one of the people who can swing that.
Really good Blog, Mitch! This certainly confirms the trends we are seeing!
I agree that we are valuing more access than material items, particularly the young people. I think the new technology values, plus the global recession, have framed a new set of priorities. Many people today value information and connectivity more than the physical assets.
The buying changes will continue to evolve, no doubt. But the days of viewing every thing from what we own are changing (just as Amazon changed the notion that book sales only could be produced through book stores with high cost inventories).
kq4ym - It may be a generational thing. Millennials may make do with less, while older folks feel the need for more. Certainly past generations made do with less. Was that because they had to, or they chose to?
Some people are coming to the realization that having more doesn't make them happy, and voluntarily choosing less.
And if the economy goes into the dumper, we may all find that we have to make do with less, whether we want to or not!
While I like to think I can push back from material goods, I'm not so sure I can really do it. And I'm not so sure society in general is going to do it either. The test might be to ask is your house more full of stuff today compared to five years ago.
I know my house is considerably less lacking in storage space and even walking space than just a few years ago, and that's even with a conscious decision to try to cut back on buying new gadgets and conveniences.
It's probably nature and nurture that make man want more 'toys' and find excuses to obtain (and store) them away like squirrels burying nuts in the ground for the winter.
Alison - I'm not a fan of people who disconnect permanently, or for a year. But disconnecting for a few days, or even a few hours, is salutary.
I don't believe it's practical for me. But I'm interested in ways to partly disconnect. On my recent vacation, I shut down my laptop for 10 days, relying solely on the tablet and smartphone for connectivity.
Part of me admires those who choose to disconnect. Part of me doesn't understand it (except on days when I have 400 emails in my work inbox and 3,000+ in my personal email. Then I get it very easily!).
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New York's Metropolitan Transit Authority is conducting a pilot test of digital kiosks to guide subway users to where they want to go more efficiently and at lower cost.
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Edmunds separates customers into segments based on the info it collects on its site and from partners, and uses that to push out custom content, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
The automotive website uses propensity modeling to target ads and customer registration forms, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
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