Beware Of Your Business – Kodak Moment

Beware Of Your Business – Kodak Moment

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Take a snapshot (pun intended) of your business today – now think five years ahead and consider the very real possibility that more than half (small businesses up) will cease to exist as we know them today. Five years ago in Virtual Realty News I predicted that David Jones and Myer would struggle to exist in ten years’ time. The online tsunami has now ventured into fever pitch and it’s only going to get worse for the non-believers. Keep joining the dots and you will eventually join the chorus.

Online shopping is cheaper for consumers but much more expensive for the businesses marketing products because they now have to roll out state of the art online platforms. Economy is better off with digital disruption – “Instead, they show how established businesses facing huge technological change can get in all sorts of traps – thanks to something known as the “innovators dilemma”. The idea was developed in the 1990’s by an American business guru, Clayton Christensen. In a nutshell, it explains why large companies often struggle to deal with revolutionary changes in technology.” The simple reason is that in their ignorance, they just don’t understand.

“It goes a long way to understanding why so many companies at the sharp end of the digital revolution – media and retail in particular – are going through such upheavals. It’s also a lot more helpful than much of the public discussion of companies’ handling of technological change, which often falls into one of two categories. On the one hand, companies that innovate successfully are often surrounded by a type of mythology, with much of the credit going to an ambitious or brilliant chief executive. The popular tale of Apple’s late boss, Steve Jobs, seems to fit this mould. At the other end of the spectrum, there are the stories of the stubborn failure to change. When Kodak filed for bankruptcy this year, for instance, the narrative was that it refused to embrace digital cameras until it was too late.”

BUY PRINT

The real estate industry is now facing that “Kodak Moment” – where I believe at least a third of agencies in Australia will be forced to close. How? Key Fairfax publications ‘digital only’ by 2019: analysts Commonwealth Bank of Australia Ltd analysts said in a report that, while some will cut sooner, titles including The Sydney Morning Herald, The Age and The Canberra Timeswill be “digital only” by 2019. I believe this will happen much sooner given the huge debt that Fairfax Media is carrying. Which explains why the rumour mill is now running amok – Fairfax: The Age is not for sale.

Real estate agencies have been judged by their print presence so what happens when this presence no longer exists? It’s very simple: they will be judged by their online presence although those ‘eyeballs’ were driven to their websites thanks to print media combined with online email alerts. Real estate businesses have been totally dependent on print advertising (vendor paid) to promote their businesses – now the onus will be on the respective agencies to entice new business through their online models. It has been a long time coming given Richardson & Wrench Mosman/Neutral Bay (RWM) was the first single agency to send out an email alert back in September 2000 and the only Australian agency to post over $1 billion in database sales. We, like many other real estate agencies, are working on that new online model which will cost six figures and upwards. The survival stakes for avoiding that “Kodak Moment” within the real estate industry is set to sky rocket! All I can say is, watch this space. I have been waiting impatiently for over a decade for this moment to arrive, when real estate agencies will have to completely re-think their marketing strategies. A case of do or die.

IT and video production will be the star performers over the next five years as will the .tv websites, all of which RWM will be rolling out over the next six months (otherwise known as life after print advertising). The next phase of real estate advertising will see the agents paying for it – not the vendors. The leading real estate agencies will offset these costs from third party local advertising.

The numbers of properties being offered this week are balancing (as we predicted) given school holidays start after this weekend.

Source: Domain Property Monitors

    MOSMAN – 2088

    • Number of houses on the market last week– 120
    • Number of houses on the market this week – 120
    • Number of houses on the market this time 2011 – 116
    • Number of apartments on the market last week – 84
    • Number of apartments on the market this week – 92
    • Number of apartments on the market this time 2011 – 86

    CREMORNE – 2090

    • Number of houses on the market last week– 21
    • Number of houses on the market this week – 17
    • Number of houses on the market this time 2011 – 16
    • Number of apartments on the market last week – 18
    • Number of apartments on the market this week – 18
    • Number of apartments on the market this time 2011 – 33

    NEUTRAL BAY – 2089

    • Number of houses on the market last week – 19
    • Number of houses on the market this week – 19
    • Number of houses on the market this time 2011 – 12
    • Number of apartments on the market last week – 45
    • Number of apartments on the market this week – 45
    • Number of apartments on the market this time 2011 – 78

For this week’s sales in Cremorne real estate, Cremorne Point real estate, Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Neutral Bay real estate, Cammeray real estate.
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For this week’s open for inspections
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Australia must prepare for lower living standards: Garnaut – a prognosis I find both absurd and laughable when some believe Australia is just and only a mining quarry. Join the dots again – Apple shares touch $700 as iPhone orders soar given business now (for many) is all about consumers viewing your business on a smart phone.

Great article – A black Swan is looming where I draw similarities to state governments who are now broke given the massive amounts of money that was wasted. Now they have to balance the books and fund themselves. For state governments, increasing the GST is not the answer – it won’t happen. Just like the real estate industry without print media won’t be pretty. Forget those ‘Kodak Moments’ – this is not the time to smile and say cheese!

Today, we have smart phones and dumb phones – the same can be said for real estate operatives. Ignore online at your peril. Spending a few thousand on a website won’t be the answer. Vendors will go with the agencies who are the future not the past.

Cheers ^__^

3 Responses to “Beware Of Your Business – Kodak Moment”

  • Stuart McHardy says:

    Hello Bobby

    I hear you. It is the same in the Motor Industry. We sell the bulk of our vehicles through the internet be it our website, carsales.com, carsguide.com or trading post online. Remember back when the Trading Post (print) was as thick as a phonebook? Telstra paid $400mill for it only to move it online within a couple of years. It was also recently the Sydney Morning Hearld canned it’s motoring liftout on a Friday and is floundering with Saturdays, print is dead & if businesses don’t move ahead with the times they will be dead. (sorry Gerry H.)

    regards

    Stuart McHardy
    JOHN NEWELL MAZDA

  • Your 100% right Stu – the only problem for the vast majority of real estate agents and agencies is that they remain print dependent! Who simply won’t survive that Kodak Moment!

  • Hi Robert
    Interesting article, but I feel even your best intentions of a 5 year snap shot are already outdated before going to press. Technology & innovation in the last 5 years have out striped that of the previous 50+ years, some even say a 100years.
    As you may know I started one of the 1st online store in Australia, and the 1st online baby gift business http://www.babyexpress.com.au back in 1997, which is still going strong, a record for an continuing online presents.
    You are right when you point out the high costs associated with having an online platform, but it’s much more than that, much more, it’s a mind set. It’s totally pointless having a wiz bang online store if you don’t have the right people to make it work on all fronts? Virtual selling is totally different to face to face, and it’s not all about price!
    Many of the old school retailers believe they can have a successful online store, but in many cases that’s not possible with some existing management mindset, the thought processes are totally different, between bricks and mortar and online retailing.
    It is no real prerequisite to have a retail bricks background to be successful online, in fact it can be a negative in so many cases.
    There is and has only ever been one measure of retail success and that is bottom line profit, sales less costs and the margin retained. If everyone is buying the same or similar products, irrespective of whether they are intangible or physical goods, the only important factor is the speed of stock turn and retained profits, momentum. Finding your way through a new spawned online sales service industry, ready and willing to rob you blind of you hard earned cash, for you to have the latest and greatest online platform.
    Many major manufacturing industries selling high priced goods are already asking the question, why do we need a 3rd party to distribute our products if consumers are prepared to choose and buy online? The only facility we really need is great service centers?
    I think it’s a nice thought to have a Kodak moment, but in reality, and with the very smart generation coming through the system now, 5 years is a lifetime to these new innovators.
    The bell started tolling a longtime ago, it’s just that some live on shores where the sound is not that loud..yet!
    Have a good weekend, Regards Steve McCarthy

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