August 27 , 2012
Must Face It
The internet and business sensation, Facebook, is expected to file for its IPO tomorrow with an estimated $75-100 billion valuation, which will make the eight year old enterprise one of the most valuable companies in the world. Facebook has more than 800 million active users, over half of whom log on to the site every day. Over 1.5 million local businesses have active pages on the site, providing a high traffic, densely populated location for their customers to easily access their products 24/7. As for word of mouth reviews and endorsements, there are more than 2 billion posts liked and commented on every day. The internet and social media have enabled information and ideas to flow freely and their influence on the economy, business world, commerce, and our daily lives is only going to increase. The retail world has certainly been impacted, as price transparency and flash sales are clearly here to stay; and the retailers that are figuring out how to take advantage of such are being well rewarded. E-commerce is now approaching $200 billion in revenue in the US alone, accounting for 9% of total retail sales, up from 5% five years ago and less than 1% a decade ago. By 2014, essentially every mobile phone in the US will be a smartphone connected to the internet. Recognizing such, many leading retailers, such as Bed Bath & Beyond now consider the internet their biggest store. Retailers are finding that their digital and physical strategies are not competitive, but rather complement one other increasing their sales and lowering their costs, as their online and offline strategies become seamless. In fact, 60% of the top 10, and over 60% of the top 25, internet retailers are traditional bricks and mortar chains including Walmart, Apple, Macy’s, JCPenney's, Sears, Best Buy, Costco, Target, Gap and all three of the top office product superstores. The key, as with all sea changes, is to adapt. The real estate industry will clearly be impacted as everything from Google Earth to QR codes make information more abundant, accessible and robust, which will make the inefficient aspects of our business that much more valuable means of differentiating ourselves. Face time with your relationships is certainly a great place to start, as is your capacity to use the rest of your heads-- to listen, observe and think. Change is the new constant and with the rate of change of knowledge, we likely have not even heard of the things that we will be facing and adapting to five years from now.