The Walls Are Beginning To Crack

As I write this, we are now hours away from the end of the first full month of 2020.

Hard to believe that time flies this fast.

Down here in the great ATL-land today is giving us a short taste of winter cold. While it’s not snowing here, it is in the mountains of Northeast Georgia.

Many of my friends and colleagues have shared with me stories of stiffness and pains. They too are Baby Boomers who are experiencing the first phases of generational maturity.

You might wonder what these initial sharings have to do with high tech.

And… that’s okay… there is a reason behind it all.

Just as the biggest aspect of being a Boomer entails dealing with generational maturity, so too is high tech and the digital wonderland that many perceive as hitting levels of infinite growth.

One of my favorite questions to ask colleagues is what percentage of all retail sales in the U.S. are sold on the Internet.

God love the Millennials. Many of them will say as much as 70–80%. I actually had one Millennial tell me 100% as we were standing in the check-out line at a Target Store.

The U.S. Department of Commerce combined with both the U.S. Census Bureau and the U.S. Department of Labor Statistics tracks the sales and reports the “official” percentage about 4–5 months after the sales occur.

The fourth quarter 2019 stats will likely be published just after the first of March, but the third quarter stats are now official.

Retail E-Commerce or Internet sales in third quarter 2019 posted at a level 16.9% higher than third quarter 2018.

WOW… an increase of 16.9%.

In third quarter 2019, online retail sales account for 11.2% of total sales in the U.S.

I know… I know… the Internet is taking over those physical retail stores who only, only post 88.8% share of all retail sales in the U.S.

However, the digital walls are beginning to crack.

According to an article that ran this past week in the financial pubs, Amazon’s 4th quarter sales did post higher, but its earnings have remained stagnant and many areas post red vs. black.

Digital market junkies post viewpoints that the cost of shipping — same day included — continues to go up.

Another article in the WSJ last week noted that the cost of Amazon’s own delivery vans is coming in higher than expected and that sub-contracting out delivery is threatened with competitors offering better pay.

Also posting this week in the WSJ, Netflix missed its forecasts for U.S. subscriber growth. Netflix announced it added just over 400,000 new domestic subscribers in 4th quarter compared with its forecast of another 600,000.

Netflix stock posted declines this past week.

Is Apple becoming more a Boomer brand than a Millennial brand?

Just as Boomers are paring back the red meat and carbs, Apple just hired a new financial guy that specializes in squeezing out suppliers to reduce costs. While the press still touts each year’s new iPhones, those behind the scenes are whispering the phrase “market saturation.”

The pressure is on to keep the financial model ticking as the non-Apple community diminishes and Apple users are wearing out managing multiple models and formats of interaction. After all, those iPhones and Apple Watches today do everything and anything.

Could these high tech mega-brands be facing cracks in their immortal Fast Company business model?

The answer is not too complex to reach.

Yes.

To be honest, it doesn’t really matter just how innovative and just how cool the product or service might be, product lifecycles move on.

However, there might be a bit more to just what’s happening.

If you follow this blog, you will be quick to note that I am a strong advocate of the High Tech — High Touch “mega-trend.”

There is no question that our society has reached a perceptual level of High Tech infusion. As I shared at the start of this blog-logue, many believe that the Internet has a command on the U.S. retail market.

As I stand-back and just observe the new Millennial parents, it becomes quickly apparent that attention is shifting quickly to kids. Even when they attempt to text or quick check their social media dialogues, the kids are either nagging on their clothes or yelling for more focused attention.

As I drive through the new neighborhoods where the Millennials are purchasing family space, home-pages are getting replaced by home-fronts complete with more space to clean and yard space to mow.

Sure, I am the first to say that when those Millennial moms and dads finally get some free-time, they desperately scramble to find those iPhones not to unlike other dependents going through detox.

So where might we see impact from the High Tech model breaking?

The High Touch is going to resurface at a pace unlike we have ever seen in the past.

Mom & pop shops are already coming back to life. Plush toys are re-appearing. While Yoga never really went away, it is re-surfacing with multiple variations.

While home-office space is still popular on the home front, the latest hits are game space, hobby rooms, play rooms and even retreat space.

High Touch visual tiles and paint colors and wallpaper are quickly replacing the neutral whites.

And yards are being incorporating into the home interior space.

2020 promises to be a year of change and a year of entertainment in which High Tech will be less of a driver… and human High Touch will.