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Inside the Connected Local Economy
The document discusses the evolving concept of the local economy, emphasizing how it is being transformed by changes in commerce rather than media. It highlights significant spending in various local industries and the impact of the virtual economy on traditional retail, illustrating a shift in consumer behavior driven by technology and mobile commerce. The text concludes that to thrive, the local economy must innovate its information infrastructure in response to these changes.
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Inside the Connected Local Economy
- 1. Steven Jacobs Deputyeditor at Street Fight Inside The Connected Local Economy.
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- 5. Stores Delivery Pickup Marketingservices and technology Back-office {radio > television > web 2.0 For years, the local economy was driven by changes in media. Ad-supported techAd-supported media
- 6. Stores Delivery Pickup Back-office{cloudcomputing > on-demand Now, the local economy is being driven by changes in commerce. Marketing services and technology Ad-supported techAd-supported media
- 7. The local economyis the lattice of industries that help us buy and sell in the real-world.
- 8. the $42.3 billionspent on ground transportThe local economy is Source: Bureau of Labor Statistics
- 9. the $184.2 billionspent on food/beverage shopsThe local economy is Source: Bureau of Labor Statistics
- 10. the $189.4 billionspent on accommodationsThe local economy is Source: Bureau of Labor Statistics
- 11. the $219.8 billionspent on arts and entertainmentThe local economy is Source: Bureau of Labor Statistics
- 12. the $259.5 billionspent on rental/leasing servicesThe local economy is Source: Bureau of Labor Statistics
- 13. The local economyis the $493.1 billion spent at restaurants and bars Source: Bureau of Labor Statistics
- 14. Over the pastdecade a virtual economy has emerged.
- 15. has grown ata blistering rate thanks to the web.The virtual economy $0 $75,000 $150,000 $225,000 $300,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Ecommerceretailsales(billions) Source: Bureau of Labor Statistics
- 16. now accounts for6% of all retail sales.The virtual economy 0% 1.5% 3% 4.5% 6% $0 $75,000 $150,000 $225,000 $300,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 percentofretailsalesviaecommerce (includingnon-store) ecommerceretailsales(billions) Source: Bureau of Labor Statistics
- 17. has affected industriesin different ways.The virtual economy 0.00% 0.75% 1.50% 2.25% 3.00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 sporting goods, hobbies, books clothing stores car and parts dealers electronics and appliances home service food service total retail excluding non-store sellers percentoftotalsalesviaecommerce Source: Bureau of Labor Statistics
- 18. has decimated theinformation retail industry.The virtual economy the decline in single-copy magazine sales Singlecopysales 0 30,000 60,000 90,000 120,000 2008 2009 2010 2011 2012 2013 2014 The Atlantic The Week The New Yorker The Economist Time Newsweek Source: Alliance for Audited Media
- 19. The virtual economy butour relationship with it has change so much has shrunk the pie for the local businesses.
- 20. The brick-and-mortar world haschange so little but our relationship with it has change so much.
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- 22. “We were promisedflying cars, and instead what we got was 140 characters.” — Peter Thiel
- 23. Behind every place Thereis a system that manages how people move through it.
- 24. shape the waywe move.These systems
- 25. help us getacross town. public transit These systems
- 26. tell us whenit’s time to go home. buildings These systems public transit
- 27. help us findplaces to shop. buildings stores These systems public transit
- 28. let us knowwhen a store is open. time buildings stores These systems public transit
- 29. help us catcha cab. taxis time buildings stores These systems public transit
- 30. make our citieswork. taxis workcities These systems public transit timestores
- 31. Together, the systemsform the foundation of the local economy
- 32. As these systemscome online the way we move through the world changes.
- 33. The connected localeconomy is reinventing our relationship with the store workcitiespublic transit taxis timestores
- 34. $450.00 $900.00 $1,350.00 $1,800.00 2012 2013 20142015 2016 2017 Non-web-influenced-offline sales Web-influenced offline sales Online sales Source: eMarketer a function of the webThe store is now
- 35. Foottraffic(millions) 0 850 1,700 2,550 3,400 Offlineretailspending(billions) $2,775.00 $2,850.00 $2,925.00 $3,000.00 2012 2013 2014 Foottraffic Offline retail spending Source: WSJ, eMarketer more productive as ecommerce has grownThe store is now
- 36. 18-29 years 30-40 years 50-64years 65+ years 0% 25% 50% 75% 100% 18-29 years More young shoppers say that mobile has led them to shop in stores more frequently — not less 87% of millennials now shop the same more in stores because of mobile Source: Gallup being used differently thanks to mobileThe store is now
- 37. 0% 15% 30% 45% 60% Inspiration Research PurchasePost Purchase Percentage of shoppers who search on mobile and used the store during phase of purchase cycle Source: Google IPSOS a fulfillment center for mobile buyingThe store is now
- 38. In order tocompete the local economy needs to reinvent its information infrastructure
- 39. 1 Commerce —not media — is driving innovation in local.
- 40. The virtual economywas the first application of connectivity — not the only one. 2
- 41. The story of“local” today is the story of the connectivity reinventing the information systems that govern the way we move through the world.33
- 42. Steven Jacobs Deputy Editorat Street Fight steven@streetfightmag.com