Behold, all things are made New (Economy)
One thing that struck me as I’ve been reading The Wal-Mart Effect is how so much of Wal-Mart's “revolutionary” practices are so low-tech. Most of the talk about sophisticated retailing focuses on the “data-mining” – sifting through huge amounts of data looking for patterns in buying behavior. And yet, that high-tech analysis often results in a very low-tech, even primitive, solution, e.g. "let’s put pallets on the store floor instead of unpacking them in receiving." It seems that the most power that high-tech has is to find new value in very ordinary things.
The most dramatic portrayal of old technology liberated by new technology is NetFlix. Everyone in the entertainment industry was waiting with baited breath for on-demand delivery of movies over the wires – through the internet, or through cable. And then, out of nowhere, comes a very high-tech, web-enabled, data-crunching company that delivers movies . . . through the U.S. Postal Service. Huh?! Internet delivery is expensive, when you consider how much the bandwidth costs, and how complicated it is to work out security, anti-piracy, and whatnot. Once the DVD format was widespread, it became remarkably cheap to send movies through the mail. The business model is simplicity itself: sign up for a monthly fee, get movies mailed to you. It has all the features that Sam Walton would have loved: it’s cheap compared to other movie providers, it does a high volume of business with low cost and maximum efficiency, and it’s better for consumers. Oh, yeah, and it's absolutely killing the competition, i.e. Blockbuster. Sam would have loved that.
Again, this is the triumph of low-tech wedded to high-tech . . . NetFlix could not possibly have worked without lots of relatively new technology: really good websites, sophisticated databases managing inventory and fulfilment, and the newer, super-light-weight DVD media. And yet, all that technology is geared to making a low-tech solution possible: send movies through the mail.
So what's the next low-tech method to be rediscovered in the light of high tech?
The most dramatic portrayal of old technology liberated by new technology is NetFlix. Everyone in the entertainment industry was waiting with baited breath for on-demand delivery of movies over the wires – through the internet, or through cable. And then, out of nowhere, comes a very high-tech, web-enabled, data-crunching company that delivers movies . . . through the U.S. Postal Service. Huh?! Internet delivery is expensive, when you consider how much the bandwidth costs, and how complicated it is to work out security, anti-piracy, and whatnot. Once the DVD format was widespread, it became remarkably cheap to send movies through the mail. The business model is simplicity itself: sign up for a monthly fee, get movies mailed to you. It has all the features that Sam Walton would have loved: it’s cheap compared to other movie providers, it does a high volume of business with low cost and maximum efficiency, and it’s better for consumers. Oh, yeah, and it's absolutely killing the competition, i.e. Blockbuster. Sam would have loved that.
Again, this is the triumph of low-tech wedded to high-tech . . . NetFlix could not possibly have worked without lots of relatively new technology: really good websites, sophisticated databases managing inventory and fulfilment, and the newer, super-light-weight DVD media. And yet, all that technology is geared to making a low-tech solution possible: send movies through the mail.
So what's the next low-tech method to be rediscovered in the light of high tech?
Labels: Business, Science and Technology
posted by The Thin Man | 5:39 AM
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