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Telltale signs that the Internet is changing our lives. |
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Written by Ken DiPietro
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Friday, 29 April 2005 |
Disruptive Technology - A
technology, that when implemented as a product or service, eliminates
existing markets, creates new markets, and/or drastically modifies
market(s) structure(s).
In the last couple of days I have
seen a curious set of somewhat unrelated incidents that have caused me
to wonder of I am not seeing the beginning of a trend.
While trying to get 22 things accomplished in the time it should take to get three things done (this is my usual time management technique)
I stopped by the Deli in our local supermarket to pick up a few things
before I headed home. The woman who worked there asked me if I had any
recommendations as to where she might get a good deal on a new LCD
monitor for her computer.
She is pretty “net-savvy” and had
checked out some of the usual sites (Ebay, Buy.com, Overstock.com,
etc.) looking for a deal but she thought I might know somewhere she
hadn't checked so she asked me for some recommendations.
Coincidentally, when I got home a customer stopped by with a dead
computer. After taking a quick look at it we determined that the hard
drive had died and as the computer was a little over three years old it
didn't seem like a good idea to put any more money into it.
In both of the above cases I sent these people to one of my favorite resources, Techbargains.com.
Techbargains is a site I check almost daily to see who has what for
pricing on tech goods. To a lesser extent I also glance through FatWallet and a few other similar sites for this kind of information. I have found PriceWatch and Froogle to be a huge help on different occasions.
A
little later in the day I got a call asking me to come up and deal with
a few problems at an automobile dealership we service. While I was
there dealing with a few “customer inflicted” computer issues one of
the salesmen started complaining about a sale he had lost due to a
customer who had researched the vehicle they were interested in buying
on the net before they went to the dealership. Apparently, the customer
had managed to get the vehicle's dealer invoice off of the net and used
that document to negotiate the price they were willing to pay on the
vehicle - a price the salesperson was not willing to sell the truck at.
He
then launched into a tirade about how Ebay was messing up the used car
industry (I'm not sure anyone other than the industry themselves is too
upset about that) because people could now go to one place and buy a
used vehicle conveniently – oftentimes for about the same price he
could buy these vehicles at the dealer's auction for.
“If this keeps up I'm going to find myself out of a job!”
Out of the mouths of babes...
It
seems to be commonly accepted that technology along with society as a
whole are moving forward at ever-increasing speeds. This trend is
likely to continue and even accelerate as the future advances. What
does this mean? Is there any way we might be able to predict which
industry will become the next buggy whip or electric typewriter to
disappear in a relatively short timeframe?
What kind of effect
will distinct industries see when the average Internet user has the
ability to quickly, conveniently and easily gather whatever information
they need about price and availability? What impact will this have on
the Real Estate field as well as automotive, computer or any other
consumer products?
Our economy is one now made up of service
professions or put another way, people who will do things for us for a
fee. What if the services these people provide become obsolete because
their customer can now do the jobs themselves with very little
difficulty?
Let's take a look at the Real Estate industry. What
does a Real Estate Broker offer for their commission? From a buyer's
standpoint a Real Estate broker offers a selection of home to choose
from, the ability to negotiate with the seller from a third party point
of view as well as the ability to assist in the mountain of paperwork
that buying a home entails.
From a seller's perspective the
Broker offers the ability to ascertain a realistic price for the
dwelling as well as an infrastructure that allows the home to be
showcased to a number of potential buyers. Once a client is interested
the broker can assist the seller negotiating the best price for their
home and wade through the necessary paperwork to make the deal go
through.
In each of the above cases every single one of these
services can be replaced by the Internet for significantly less cost to
both the buyer and the seller. Yes, under the present system the buyer
doesn't “pay” the broker but there is a very real cost assumed by the
buyer because the 6% commission is figured into the sale price of the
home. It seems to be safe to assume that if the seller is willing to
accept an offer of $100K (meaning that they will net $94K after paying
the commission) the buyer probably could have bought that very same
property for $94K if the broker hadn't been involved.
As far as
the paperwork is concerned there are certainly ways of automating that
process. In fact, I'm sure most Real Estate offices as well as
Attorneys have already done so.
If this is true, what does this
say for the Real Estate Broker's industry as it is currently thought
of? What does this mean to the long term value of an established Real
Estate Broker's office? I don't think it will take a crystal ball to
draw some conclusions based on the above premises.
What about
the New/Used automobile industry? Are there parallels to the Real
Estate industry? I think there definitely is. As the big three US
automobile makers are starting to really hurt (starting to?) they need
to begin to question the value of keeping the traditional dealership
open. (Actually, the automobile manufacturers need to question a lot
more than just that but that is an entirely different rant.)
In
the next decade many of the things we believed were unshakable will
begin to disappear. The question will be who will be able to take
advantage of these changes and who will get burned.
The
reality is that it is through the mental exercises like these that we
can try to interpret the signals we are being provided and form a plan
as to how we should react.
It never was the strong that survived, it was those that had the ability to adapt.
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