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 agree that this trend will affect retailers a ton. But as everything becomes more digital, we are probably going to acquire more virtual goods. How can retailers work in an environment like that? They will have to be creative and innovative. The digital world can be highly disruptive. Those who are fit for survival will. The others will fall away. That's just a part of competition, it will be interesting to see how it shakes out in this new environment businesses are faced with.
Mitch, great post. I'm not prepared to dismiss this. I'm with you on "get back to me in a decade." But I think there's a flaw in the argument:
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.
You seem to be wording that as if Americans are somehow "stuck" or firced in some way into these whitespace moments. And yet movements that seek to find someway to fill this space are meeting resistance.
Not opposition. Just an enjoyment of that whitespace time. Rapid transit is a smart and green alternative to individual commutes, but it took $15/day parking to convince me to surrender that whitespace in my life. And I rarely hear talk of anyone using a Zipcar, even though I know of a location just a few blocks from where I work.
No one's protesting these things. But we like our "me time" here in the USA. I'm not sure... yet... that we're ready to give that up.
robjvargas - Interesting. Zipcar is booming in popularity. It doesn't seem to be used for peopel who need it daily, just by people who use it occasionally. Not for everyday commuting, but for once a week grocery shopping.
And you did indeed succumb to the lure of mass transit. Where do you live and work, BTW?
The Internet doesn't requre mass transit to penetrate commute time; it just needs to be accessible in the car. And self-driving cars will result in a lot of downtime for commuters now busy with the work of driving.
I don't know that I agree with you about Americans valuing me time. The trend for the past 88 years (since the first commercial radio broadcast in 1920) has been for Americans to search for more and more ways to plug in and be entertained.
I wonder how much of the Great Recession, which begun in 2008 and is still lingering, is attributable to people just plain thinking they need plain stuff.
I had this idea for a science fiction novel I started but never finished, set 50s years in the future. It's an extension of today's trends. Today, many affluent young people have very few possessions, just a few changes of clothing and some sticks of Ikea furniture for their tiny urban apartments. In my novel, young people in their 20s own almost nothing, just a few possessions they can fit in their messenger bags. They buy disposable clothing, and eat meals in restaurants. They don't even have homes, they just sleep in capsule hotels. I wonder if that might come true.
Like I said in the blog post: Ask me again in ten years and we'll see if a trend is starting to show itself.
I am not convinced yes the younger generation are not "tied" down by possieions but as they grow up they will acquire the "keeping up with the jones" mentality. They are buying a lot of tech and I agree homes/cars and large purchases of this type are not on the radar yet but i believe it will come in time
Even if the Internet ad can be displayed as very comprehensive compared to other media, it is definitely much cheaper than most. Internet Ad Packages are offered as low as $ 10.00 for a period of one month, or by a set amount of "hits", depending on the advertiser you go with.
If the product / service is aimed at the younger generation or the corporate world, Internet advertisements would be best because they are already hooked into the net, surfing websites. A few of these pages that you have the ad on, could give you a link to your own website as well. Result, a greater number of "hits" on your website!
Yes @shehan I agree with you on this tech spend in Gen Y is on the up and businesses need to realize and adjust to the trends particularly in retail. More hightech stocking stuffers on the shelves this year and they are flying off.
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