A very interesting chart plotting evolution of the auto markets in the current technological environment from the Morgan Stanley:
- Producers and consumers: as technology allows for greater and greater customisation, product offer becomes consumer/user driven in services and increasingly in physical goods;
- Owners and users: one model of 'own-to-use' is now increasingly being replaced by a dual option: 'own-to-use' or 'contract-to-use'. Goods conversion to services (e.g. ability to extract service from the physical goods without the need for ownership) adds another dimension to this.
This is happening in auto industry, but it also happens increasingly in smaller ticket goods and services markets. And it is going to change dramatically the retail sector. Here is an interesting article on Amazon vision of the present (not even the future) in terms of purchasing (note: the issue here is to what extent can brand standardisation consolidate product offers):
All of this, ultimately, is about the ability to create a 'shared bandwidth' around a quasi-commoditised service with some heterogeneity and customisation around it, and efficiently allocate consumer access to it. Which really means that the 'shared economy' is like a shared pipeline: someone will, in the end, have to arbitrage access to it, just as today someone has to arbitrage access to shared services (tolls, grids, etc). For now, we do so very inefficiently even crudely (very little demand-linked variability in toll pricing, long-term contracts nature of access to grids etc), but as the number of users-producers rises and their share in the overall economy grows, this arbitraging will have to become more refined, more dynamic, real time responsive.
I will be speaking about these and other longer-term trends in retail sector at an international retail sector conference in June so stay tuned.
