|BDX’s Tim Costello made so many great points about the fast pace of change in our digital world when on the stage at DCX.
One which really struck home was that the digital world’s companies have turned the concept of profitability on its head. Uber is valued at 10x revenue but loses 40 cents on every dollar. Yet they are considered wildly successful.
Amazon is the gorilla in the digital room, buying up companies and still having deep enough pockets to spend $12-18 BILLION on innovation this year. Yet they are a break-even business.
Tim summarized it perfectly, “Loss is the new black.” Instead of saving that R & D money and showing a profit, Amazon is laser focused on growth and vision. They’ve turned their sights on package delivery, which is a close-to-the-heart endeavor. But did you know that their enormous annual R & D budget is larger than the value of the entire UPS Corporation?
We all know Amazon is delivering groceries, but how about their foray into opening brick and mortar automated-checkout stores in underserved neighborhoods? Now they are buying Whole Foods. All in a low margin industry. Looks like there isn’t anything they won’t try!
Often Amazon’s start in a vertical is in response to a social need: the lack of grocery stores in poor inner cities.
So what if they turn their focus on home building in response to the lack of low-income housing? Could Amazon create/deliver a low-cost home that will radically change our industry? In early last century, the Sears and Roebuck sold and shipped entire house-building kits (two boxcars and a 75-page manual), some designed by Frank Lloyd Wright. In some of the more remote parts of Canada, it’s common to order a house package and have project builders travel onsite to assemble the parts.
How can we preserve our industry as we know it? We can’t. We have to transform to meet changing customer needs and resolve pain points. An amazing transformation is Good old Ma Bell–ATT. After the original ATT broke up, the Baby Bells bought each other up, launched new products (cellular), lost their highest grossing product (long distance), purchased/developed video delivery (streaming thru hardwire and digital), pushed the sale of smart phones so they could venture into mobile computers (data–today their highest grossing product) and became a digital juggernaut. Only twenty years ago they were a landline into your home and bag phone in your car.
How is home building different from 20 years ago? Are we delivering what buyers want–or what we want to deliver? Are we delivering service the way the home shoppers want it — or the way we want it? Choosing the latter in either case is a perhaps an invitation to the digital juggernauts to flex their muscles in our industry.
When it comes to providing service buyers want–new home shopping/touring on a buyer’s timetable with no sales friction– NterNow delivers. Call us for a free trial — 678-910-1811.