Is it me, or does it seem like technology is advancing at a quantum pace these days. Everything seemed so dormant during the post recession years, but today, stories of rockets that can land themselves and self-driving cars almost seem ho-hum. I jotted down a quick list of trends that sprang to mind, and I set a calendar appointment in my iPhone to check back in one year. (This also might come in handy as I figure out where to invest my son’s college fund!) Some trends are obvious- I predict fax machines will never make a come back. Then there are surprises- who ever predicted that sales of turntables and vinyl albums would be growing in 2017?!?!
-aging (more people are living longer)
-housing demand (urban apartments; multi-generational living; age restricted)
-travel/outdoors (adventure travel, cruises, Millennials motivated by experiences)
-privately funded space exploration/tourism spending (colonizing Mars, the Moon; SpaceX)
-consumer debt (credit card balances bulging)
-mobile technologies (wearables, iphones, laptops)
-electric vehicles (all car companies making the shift)
-robotics (self-driving cars; Robots making pizzas!)
-pets (spending up every year since 1994 to over $62 Billion, Fortune Aug 2016)
-gender pay parity (women’s pay increasing)
-solar power (better, cheaper technology)
-high quality foods/food delivery (fresh/organic; restaurant delivery services)
-local craft alcoholic beverages (specialty “boutique booze”; micro brews)
-cannabis (like it or not, it’s happening folks)
-LED (getting better and cheaper)
-on demand video (watch when you want, where you want…not when NBC tells you)
-healthcare costs (R&D; drug monopolies)
-ride sharing (Uber! This could reverse quickly, though, with self-driving tech)
-conservation/utility (greater global awareness; make do with less)
-brick and mortar retail/banking (internet provides more options, cheaper; e-banking)
-fax machines/corded telephone (“dad, what’s that thing?”)
-desktop computers (laptops becoming more powerful)
-home stereo systems (again, “dad, what’s that thing?”)
-connected cable TV (consumer revolt against expensive cable packages)
-smoking cigarettes (still growing in some countries, but in decline here)
-drip coffee makers (K-cups rule; French press is still chic, though)
-sports TV viewership & attendance (NFL, MLB, ESPN all worried)
-taxis (thank you Uber)
-incandescent light bulbs (that’s so two centruries ago)
Generally speaking, any technological advances that help people save money, conserve their resources or improve their quality of life in a cost effective manner are probably permanent trends. Many trends are tethered to each other to some degree, such as E-Retail+Portable Electronics or Travel+Consumer Debt. Other trends are difficult to explain or predict, though, because they are tied to changing societal attitudes. The decline in NFL viewership in 2016 was probably just cyclical and due, in part, to the election distractions. But what if the NFL’s declining numbers belies a broader long-term trend reflecting society’s changing attitude towards violence and injuries in sports? Don’t get me wrong, I’m all for football (Go Cowboys!), but at some point, even the Romans eventually ended the gladiator games.
Millennials are driving a lot of the change today. They are waiting to start families later and they are proving to be savvy consumers. They are more apt to spend their discretionary income on travel than on luxury cars, jewelry or expensive furniture. They demand high quality specialty foods and craft alcohol. They stream shows on their smart TVs rather than pay a cable bill. Millennials would prefer to hop on a bike and head to a farmers market with their reusable bags (whereas my generation hops in the SUV to drive half a mile to Raleys and if we brought our own bags it was only an after thought). Millennials are proving to be the next great generation to support the arts, national parks and urban green space. The world needed an attitude adjustment and I’m glad to see it in my lifetime. My son’s world will be a better one, I am confident. So am I embracing all of the changes? Well, I’m not giving up my mechanical Swiss watch or gas guzzling Land Cruiser (well not this year anyway), but I am getting better about remembering my grocery bags and I would be at a loss if I could not stream Billions on my iPad whenever and wherever I wanted!
I have found the Hot Stove Rules to be helpful in business as well as in life generally. It basically boils down to being fair and consistent with the people around you. In a nutshell…
Similar to the Golden Rule, the Hot Stove Rules are simple, rational principals with universal application. As the millennial generation continues to drive the shift to the gig economy, it is important that small businesses and corporate America adapt to the new challenges of a changing work culture, but not lose site of the fundamentals of managing people. While the way we employ people may be changing, the basic principles of management still apply.
-Every work engagement requires defined parameters.
-Make certain that the rules of the engagement are appropriate for the work and the person performing the work.
-The rewards for success as well as the consequences for failure should be spelled out very clearly.
-When facing a situation with an employee or contractor that you manage, ask yourself, “What would the Hot Stove do?”
1. A concept developed by Murray McGregor (The Human Side of Enterprise,1960) and taught by Dr. Rita Kosnik Ph.D, Trinity University School of Business.
The Gregory Group's March 2017 e-newsletter Housing Trends & Market News discusses the decline of physical retail locations in a continuing consumer shift to ecommerce. According to the newsletter, mall owners are re-thinking their properties as the trend of retail tenants vacating their space continues to plague the mall industry. Mall owners are forced to pivot with the market trend, and are redeveloping their properties into hotels, apartments and distribution centers for ecommerce retailers. In Sacramento, the long struggling (and aging) Country Club Plaza is going through this metamorphosis as Macy's and SportChalet both closed their doors at the mall in 2016. In the place of the long vacant space that formerly housed department store Weinstocks, discount food grocer WinCo Foods has opened. It was reported in the Sacramento Business Journal (July 26, 2016) that Cinema West would be opening a new movie complex offering upgraded food options including alcohol sales. The shift in demand in favor of enhanced entertainment and food venues and away from retail will probably have a positive effect on surrounding neighborhoods and home values. Malls that fail to adapt or are over-burndened with excessive debt loads face a longer road to recovery, which may hurt neighborhood values in the short term. My question is: what are people going to do with all of those empty Amazon boxes piling up at an alarming rate in their garages? Maybe developers can replace their former electronics store or discount clothing store tenants with box collection sites!
The persistent housing shortage will continue to drive demand, but costs are rising quickly. According to the NAHB, softwood prices rose in February 2017 due to the trade dispute between the US and Canada (NAHB, "Building Materials Prices Rise in February", 3/15/17). Rising land prices and building material costs are placing pressure on builder profit margins. Keep an eye on the California State Legislature as it proposes new legislation that would further burden the already over burdened budgets of builders and developers. SB71 would require all new commercial and residential buildings to install solar panels on a minimum of 15% of the roof area. AB199 would require residential builders to pay prevailing wages, which are often double market wage rates. Another proposed bill, SB2, would add a $75 fee to certain escrow transaction documents, which would be used to fund affordable housing initiatives. Interest rates are rising as the Fed increased last week and signaled more increases to come this year. While this is a good sign for economic growth, rising interest rates may also mean higher mortgage rates and higher financing costs for builders.