"Change is the law of life. And those who look only to the past or present are certain to miss the future." -- John F. Kennedy
Life is either an adventure where you explore opportunities to take advantage of all the changes around you or it is bystander sport where you sit there and watch it going by. My favorite post this week was another reminder on the accelerated pace of change we are all experiencing.
- Favorite Post this Past Week: The State of the Internet in 2012. http://ow.ly/ezK1Q The future is mobile. 2+ Billion now online.
The Internet is the new knowledge and communication engine. Gone are the days of doing research in encyclopedias, checking out the background of that next business idea at the library, or buying that latest hit song at your local store. Below are some of the changes on the Internet during the last decade (1):
|World population online||9.1%||33%|
|Internet usage per day||46 minutes||4 hours|
|Total websites||3 million||555 million|
|Time to download a song||12.5 minutes||18 seconds|
Below the surface of these global numbers are the following more granular Internet growth areas / opportunities:
- In 2011, 450 million people were online in China, up from 270 million in 2007 (2). As comparison, the total USA population today is roughly 313 million people.
- Globally, 74% are accessing Internet via desktops. An amazing 66% are getting online via mobile devices. (2)
- The most wired and technology advanced country in the world is Estonia. Number 2 is the United States. According to Freedom House, these two countries also are number 1 and 2 in offering the most freedom online. The least online freedom is found in Iran, Cuba, and China. (3)
- North America has the most Internet penetration at 77.4%. Percent penetration in the other regions -Europe 58.4%, Latin America 34.5%, Asia 21.5% , and Africa 10.9%. (4)
As this week's post indicates, the commercial Internet is now roughly 20 years old. Some key insights from the author of the State of the Internet in 2012 presentation:
- 2+ billion people around the world are online.
- New online media companies have a stock value 3X that of old media.
- US digital advertising has crossed $30+ Billion and accounts for 20% of total ad spend. Newspaper ad revenue has collapsed and TV may be next.
- 1/7 of the world's population uses Facebook.
- Offline retail sales still dominate, but e-commerce continues to grow aggressively.
- In 2011, smartphones sales overtook PC sales and will soon dwarf them. Tablets will also grow much more aggressively than PC platforms. The future is mobile.
A key chart in this week's post highlights the ways consumers are utilizing mobile devices inside stores:
|Took a picture of a product||19.7%||24%|
|Scanned a product bar code||20.4%||16.2%|
|Compared product prices||14.1%||10%|
|Checked product availability||6.3%||5.2%|
As a just issued AT Kearney study (5) points out, E-commerce is the next frontier in retail expansion. Global e-commerce has grown 13% annually over the last five years.
"Retail expansion is increasingly occurring through online channels as a way to tap into growth markets, build brands, and learn about consumers while investing less capital than traditional formats." (5)
According to the same AT Kearney study, the top 10 countries with the most potential for e-commerce growth are China, Brazil, Russia, Chile, Mexico, United Arab Emirates, Malaysia, Uruguay, Turkey, and Oman. China had the fastest online sales growth at 78% followed by Chile at 27%.
E-commerce is an example of a key business model driven by the evolving Internet infrastructure. Like any other business model, success requires focusing on the fundamentals. AT Kearney, in their retail e-commerce study, points to four key areas for the path to profit:
- Develop a customized value proposition - The global Internet is not about one business model globally. As in actual stores, e-commerce requires adaptation to local markets.
- Manage the customer experience - Online shopping is about convenience. Not all countries have the infrastructure for timely delivery of products.
- Do not underestimate local players - Domestic companies dominate online retail in developing markets because they understand their customers.
- Have a long term focus - It takes time to build a successful venture in a foreign market, even with a strong global brand.
For retail, e-commerce and mobile are just getting started. Key sectors such as music and even books have been dramatically reshaped by online models. Electronics may be next. Onmichannel will be the customer experience that will redefine retail. The store itself will be a component of the overall consumer approach mix. Virtual and augmented reality applications will be additional experiences added to the shopping trip. These and other online technology solutions will increasingly have a social component that will spread word of mouth faster -- negative or positive.
The title of this week's post "May you live in interesting times" is falsely attributed to an ancient Chinese proverb. The phrase was first introduced in the 1939 book by Frederic R. Coudert, Proceedings of the Academy of Political Science. Coudert attributed the words "May you live in an interesting age" to a Chinese curse. Literally translated that curse states "May you experience much trouble and disorder in your life".
The pace of change driven by technologies such as the Internet does make for very interesting times. Online models are opening the world to new opportunities, new business models, new markets, and new challenges to create successful ventures. It can also be a curse, as risk can increase when the market is now global.
Opportunities are all around you, but they are moving at an ever faster Internet speed and leading to a smaller interconnected world. Niche markets in the home country can be expanded globally by targeting global consumers that favor your brand. Focus on the value proposition and localize your business opportunity to success.
Do not be a bystander. Change is the law of life.