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.

1. Steven Jacobs Deputy editor at Street Fight
Inside The Connected Local Economy.

2. What is local?

3. small?
Does local mean

4. nearby?
Does local mean

5. Stores Delivery Pickup
Marketing services 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{cloud computing > 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 economy is
the lattice of industries that help us
buy and sell in the real-world.

8. the $42.3 billion spent on ground transportThe local economy is
Source: Bureau of Labor Statistics

9. the $184.2 billion spent on food/beverage shopsThe local economy is
Source: Bureau of Labor Statistics

10. the $189.4 billion spent on accommodationsThe local economy is
Source: Bureau of Labor Statistics

11. the $219.8 billion spent on arts and entertainmentThe local economy is
Source: Bureau of Labor Statistics

12. the $259.5 billion spent on rental/leasing servicesThe local economy is
Source: Bureau of Labor Statistics

13. The local economy is the $493.1 billion spent at restaurants and bars
Source: Bureau of Labor Statistics

14. Over the past decade a virtual economy has emerged.

15. has grown at a 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 for 6% 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 industries in 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 the information 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
but our relationship with it has
change so much
has shrunk the pie for the local businesses.

20. The brick-and-mortar
world has change so little
but our relationship with it has
change so much.

21. 1910 2015

22. “We were promised flying cars,
and instead what we got
was 140 characters.”
— Peter Thiel

23. Behind every place
There is a system that manages
how people move through it.

24. shape the way we move.These systems

25. help us get across town.
public transit
These systems

26. tell us when it’s time to go home.
buildings
These systems
public transit

27. help us find places to shop.
buildings
stores
These systems
public transit

28. let us know when a store is open.
time
buildings
stores
These systems
public transit

29. help us catch a cab.
taxis time
buildings
stores
These systems
public transit

30. make our cities work.
taxis
workcities
These systems
public transit
timestores

31. Together, the systems form the foundation of the local economy

32. As these systems come online the way we move through the world changes.

33. The connected local economy is reinventing our relationship with the store
workcitiespublic transit
taxis timestores

34. $450.00
$900.00
$1,350.00
$1,800.00
2012 2013 2014 2015 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
Foot traffic Offline retail spending
Source: WSJ, eMarketer
more productive as ecommerce has grownThe store is now

36. 18-29 years
30-40 years
50-64 years
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 Purchase Post 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 to compete
the local economy needs to
reinvent its information infrastructure

39. 1 Commerce — not media — is
driving innovation in local.

40. The virtual economy was 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 Editor at Street Fight
steven@streetfightmag.com