Back in 1789 Benjamin Franklin, one of the Founding Fathers of the United States, thought the only two things you could be certain of in life were death and taxes. Just over a couple of centuries later, there’s now a third thing you can be pretty sure of. Shopping. Internet shopping, (ecommerce, if we’re being technical about it), in all its tenticular, addictive, global, mass-produced to artisanally crafted ways, has seemingly taken over as the world’s favourite pastime.
Total Australian online sales are forecast to exceed $32 billion in 2017 which puts us in the top ten worldwide of Internet shoppers, something of a dubious honour given our population of just 24 million people.
Of course it’s not just Australia that’s seeing the boom in ecommerce. Half of all humans now use a smartphone and it’s this rise of the handheld device and the ready access they provide, that makes access to every retailer on the planet a much easier experience. As well as making it easier for the consumer to shop, for retailers and online businesses, it’s also simpler to find potential buyers, unlimited as they are by geographical location. Basically, if you want it, someone will sell it you.
And once you’ve bought whatever your heart desired, it’s now even easier to tell your friends about it. Peer reviews offer instant transparency into both products and services and many people, particularly millennials and digital natives, hold a lot of store (excuse the pun) by what their friends buy, where they go and what businesses they frequent. It took the online crowd-sourcing review site, Yelp, two and half years to get its first million reviews. In the last year, 10 million reviews were posted.
Innovation doesn’t thrive through isolation.
People have always come together to trade, cities being the nexus for people buying, selling and trading. The original source of trade was bartering; the direct exchange of goods or services for other goods or services without currency, something that’s been happening since pre-historic times.
From the spice trade of around 1490, which was of major economic importance across the world, to the rise of free trade, (which went onto bankrupt the Dutch East India Company, formerly the world’s largest company) through the Industrial Revolution to the Great Depression and then the rise the fair trade movement, trade has been at the heart of how nations, cultures and cities have thrived.
While we’re less restricted than we used to be because of the rise of technology, we’re now presented with new challenges to the economic development of emerging economies, as well as our traditional cities into smart cities because of this technological transition and new ways of trading that didn’t previously occur.
The emergence of platform businesses enables small producers to find wider audiences for their products or services. It’s a digitised, open and participatory business model creating ecosystems that simply didn’t exist before our very recent technological advances. Think Airbnb and Uber and other virtual producer/consumer models such as Etsy. The massively scalable nature, both in time and reach, of these businesses is the modern day ‘bull in a china shop’ to traditional buy-make-sell models.
Because of the hundreds of networks within networks of global infrastructure that exist now, the physical exchange on which trade depended, no longer exists. Virtual value creation as well as virtual currency (Bitcoin) have democratised the entire transaction process. And in a highly digital world, as access to services and goods is less restricted, people buy more so they also need it delivered, leading to a huge upswing in local delivery-based businesses.
A by-product of this technological trade, and an extremely valuable one, is data.
Indeed there’s an expression that ‘data is the new oil’.
With every single transaction that’s made, a literal wealth of data is created and then stored, ready to be used…who knows when. The data collected by a company such as Uber, is incredibly valuable to other companies for targeted marketing to consumer, and also to governments to provide insights into how citizens act.
So there’s huge potential in this new virtual trade arena we’ve built for ourselves but conversely there’s just as much potential in policing it. Data, both the collection and the use of it, will become even more of a regulatory issue and those businesses that can innovate to please consumers, businesses and even governments and countries, are the ones that are going to grow exponentially faster than any other.
BlueChilli portfolio company, Brontech wants to redefine the relationship between people, personal data and money. Finance managers may be interested in CurrencyVue, an FX payments and hedging solution that helps businesses better assess their FX exposure.
But it’s not just about the dollar, or yen, or euro. The prevailing social nature of the digital world has created social networks for communities to enable neighbours to share belongings and offer services. With the twin goals of strengthening communities and making efficient use of resources, BlockPooling, a community network in Singapore, lets people within a unit block or neighbourhood, connect with others with its ‘lend and borrow’ function.
Human interaction, that which brought trade to life all those thousands of years ago in the bartering economies of ancient towns and cities, must not be lost.
With the development of smart cities there’s an opportunity to reinvent the market square where people interact not just with data, but also with each other.
City stakeholders including governments as well as the private sector, need to cultivate an innovation environment where there’s a genuine appetite to make our new world of trade, a physically social as well as digitally social environment.
If you have a great idea to transform the way we trade – whether in the physical retail environment, around improved experiences and data, or meeting the needs of tomorrow’s consumers, be sure to apply for CityConnect before 22 August 2017.