August 21, 2013
What Happens When Everyone’s Connected to the Internet?
How many friends can you have on Facebook? Evidently, a lot more than you do now because the social media site and other tech companies have joined together in an effort called Internet.org to find a way to get the 4.3 billion people around the planet who are not currently online — online.
Yesterday, Facebook CEO Mark Zuckerberg announced he and his company are "on a mission to make the world more open and connected." Mr. Zuckerberg said that presently about a third of the world is online and that the number getting connected is growing by nine percent annually. While many are going online via smartphones, the cost of data, which dwarfs phone prices in many countries, bars the way to greater access.
The Facebook CEO asserted his belief that "connectivity is a human right" and "the foundation of the global knowledge economy."
The knowledge economy, according to Mr. Zuckerberg, requires the sharing of information to grow. He cited a McKinsey study, which found the internet "accounted for 21 percent of GDP growth in developed countries" over the past five years. The internet is also a net job creator with 2.6 new jobs added for every one lost to improved efficiencies.
Other founding members of Internet.org are Ericsson, MediaTek, Nokia, Opera Software, Qualcomm and Samsung Electronics. According to Mr. Zuckerberg, the companies share the belief that "it’s possible to sustainably provide free access to basic internet services" to everyone with a phone in a way that enables companies to grow profits while building the infrastructure needed to get everyone connected.
In short, the group believes that innovation will reduce the cost of delivering data while less data will be used through more efficient applications. Over the next five to 10 years, the companies project it will become "economically reasonable to offer free basic services to those who cannot afford them and start to sustainably deliver on the promise of connectivity as a human right."
BrainTrust
Recent Discussions
Discussion Questions
What would an increase in the number of people connected to the internet on a global scale mean for consumer brands and retailers? Do you think retail companies and brands should contribute to the Internet.org connectivity effort?
Poll
Connecting the world is a lofty ideal and one that might be achievable in 10 years, but commercially, doing so will benefit only certain companies. The majority of people not currently connected are isolated, largely due to economics—their’s or their country’s. So as they are connected and as “free basic services to those who cannot afford them” are rolled out, only niche opportunities will emerge for big brands.
Clearly, handset/device makers can gain if cheap devices are profitable enough for them and global CPG-type companies like Coca Cola, or even FB through localized advertising, may benefit. However, what we think of in western nations as big retailers/e-tailers will have little space to sell their goods to a totally different demographic, unless they develop entirely new versions of their businesses, localized to these new “connected” regions of the globe.
This is really if not the wrong question, a secondary question.
The real issues here are first, what would it mean for humanity to reach anything approximating global connectivity and then, what might that likely mean to individuals?
To some extent how people—as both individuals and aggregations of individuals—would use global connectivity determines what retailers and consumer branders could and couldn’t do in a totally connected world.
Socially evolving into a truly digital species would have a profound impact on culture, geopolitics and macroeconomics.
But there is only so much connectivity any individual member of the human race can sustain. Take Facebook as a mini-example. Outside of celebrities, how many current users reach the 5,000 “friend” limit? The answer, of course, is precious few because it would be nearly impossible for any individual to be regularly engaged with 5,000 other people.
So, now to the questions at hand.
Brands and retailers would face two separate challenges.
Unless a retailer were REALLY global, i.e., they operated at scale in every significant market and/or were primarily an e-tailer, global connectivity might offer less than appears at first blush. So, if you are Amazon.com the world suddenly becomes an even more attractive oyster. If you’re Barnes & Noble, you have a choice of servicing your physical markets and maintaining a sub-optimized web business, or closing out of physical retail and focusing on trying to beat Amazon at its own game.
For branders, the scenario is somewhat different, as long as they define their mission as creating demand rather than worrying about fulfilling it.
Of course, every opportunity can also be a threat and global connectivity would also exacerbate the problems currently associated with segmentation, political and cultural correctness and language.
Today, the Internet is a group of very large scale and fully integrated computer systems. The ownership and control of these systems is now largely in the hands of US based corporations. Both India and China have technological aspirations that include separate and competitive parallel connectivity. As the world wide internet continues to expand in user and site numbers, certain necessities will make it easier to compete and provide support for users at acceptable profit taking costs, making the competition described here inevitable.
The internet evolution to full IP-6 protocol and then the following settlement into IP-8 protocol will not only greatly reduce hacking and internet scheming and theft, it will also play a great part in opening the Net to parallel competition. While this sounds great for the future of e-commerce, there are many corporations unwilling to accept the competitive promise of this openness. Therein lies the impasse to the near future of internet for everyone, forever.
Brands and retailers alike have everything to gain by becoming actively involved in the stated objectives of Internet.org. Do the math—an additional 4.3 BILLION shoppers! The economic reality drives Mr. Zuckerberg’s comments and intentions.
It’s great to be magnanimous when you know that revenue is behind a politically correct initiative. Brands would be well advised to actively participate. Imagine the spectrum of new opportunities for a brand like P&G to new global customers!
Because of the Internet, the world is smaller. Local brands are bigger—with a national and even international presence. All that is good.
Then there are challenges. Retailers and their products have become commoditized. Customers can shop from their computers at home or price shop in stores with their mobile devices. I think the good outweighs the bad.
Retailers that want to have a bigger presence now have the opportunity to do so. That’s a long way to get to the answer: Yes, some retail companies and brands should contribute to the Internet.org connectivity effort.
The impact of more folks being connected would certainly depend upon whether these late adapters would be actively or passively engaged, if given the chance to connect.
In my mind, those that are not connected currently are either disinterested, living in a country or area where connectivity is expensive or impossible, or more likely…a member of a socio-economic group that is inhibited in terms of income or age.
Following this train of thought to its logical conclusion, I would think the majority of the current “unconnected” will likely not have much if any impact on retailers and brands going forward. If they were presented the opportunity to engage, they would likely not have the means or the interest to do so in an active way.
As in all things, there would be exceptions, but overall, the 20% of really engaged internet users are still likely to account for 80% of the online economic activity, no matter how big the universe of users.
I think Mr. Zuckerberg and friends should first apply their considerable intellects to seek ways to feed, assure safety, and provide clean water and economic opportunity to the poorest 1.2 billion individuals on our planet.
Then talk to me about universal connectivity.
I doubt this will shock Ken Lonyai—but he and I evidently travel in different places. Due to rugged terrain and a woefully under-gunned effort to bring internet service to rural Appalachia, I recently gave up and invested in a private network for the cove.
There are literally millions of consumers with billions of dollars of disposable income that still only have wireless service at their places of work, schools or downtown coffee shops. Not that these people are internet illiterates—quite the opposite! But imagine what will happen when they have unlimited browsing/buying opportunities in their leisure time at home!
This isn’t just about third world countries and Ryan’s concerns over the future development of humanity.
When one considers that 80% of world commerce, and 92% of world commercial growth will come from outside the U.S., one can only conclude that connectivity will be a boon to retailers that aren’t stuck to their brick and mortar concepts.
Separately, and more important, connectivity changes the personal and geopolitical mindsets in the world. I see the differences in how internationally connected people think and those that are not; they are worlds apart. Connection breaks down prejudice. Connection brings power to the people. It is only good and vastly important. (And, I would add to Jim’s comment…when more people truly know about the 1.2 billion poorest through connection, their problems will start to be addressed.)
I would just like to add that the more people who become connected, the greater the knowledge shared and learned. This, in itself, is the real plus, IMHO.
As for retail and consumer brands? Even without connectivity, many third world countries are very aware of certain brands. The message is still reaching them and in some cases, its because of the brands philanthropic outreach. Connectivity could only raise the bar and perhaps introduce new brands. Not so sure the pay off to retail in those cases however those people need a lot more from retail than retail needs from them.
But if you take a look at Ben’s comments, there are certainly consumers around the world in ‘under wired’ situations that could really make a difference to the bottom line.
We should be involved! Again, IMHO.
Doesn’t this sound an awful lot like the problem of “too many labels on the shelf” that we see in stores…only on a mega scale? Does the typical consumer really need exposure to 500 stores,as opposed to 50, to buy 100 brands of sneakers, as opposed to 10? And while American companies may salivate at the thought of an expanded consumer base, they may not be so keen on the expanded competition that goes along with it.
Certainly greater connectivity is coming, and expanded opportunities will come with that, but the growth in the latter won’t be proportional to the former (at least not in a linear way).
There is a degree of self interest for all parties in this project since connectivity to the internet drives traffic, devices, bandwidth usage. Retailers obviously benefit from being able to project their brand over the internet to new buyers. The challenge will be that unlike media companies that provide virtual goods, retailers will have to address fulfillment issues with the new buyers.
You don’t have to leave the United States to see the impact of the data divide or the haves and have nots of internet access. Companies are less productive without internet access. Humans have a greater potential from knowledge gained from the internet. This is a most noble effort that will change the world. Just look what cell phones have achieved in some of the under developed countries. Retailers will have an opportunity to expand their customer base, but this is years away and thus not a good investment for them near term.
More Discussions
Is Meta Committing to Retail via Meta Lab Stores, or Are Other Goals More Important?
Is Meta playing in retail, actually committing to retail, or looking for more data?Aerie Recruits Pamela Anderson To Highlight No-AI Models Promise
American Eagle’s Aerie banner has recruited former “Baywatch” star Pamela Anderson to broadcast the lifestyle brand’s…How Timely Is the Planned Lowe’s Website Renovation Focusing on Personalization?
Is Lowe’s being timely with its website reno, and is it right to be placed as…
Connecting the world is a lofty ideal and one that might be achievable in 10 years, but commercially, doing so will benefit only certain companies. The majority of people not currently connected are isolated, largely due to economics—their’s or their country’s. So as they are connected and as “free basic services to those who cannot afford them” are rolled out, only niche opportunities will emerge for big brands.
Clearly, handset/device makers can gain if cheap devices are profitable enough for them and global CPG-type companies like Coca Cola, or even FB through localized advertising, may benefit. However, what we think of in western nations as big retailers/e-tailers will have little space to sell their goods to a totally different demographic, unless they develop entirely new versions of their businesses, localized to these new “connected” regions of the globe.
This is really if not the wrong question, a secondary question.
The real issues here are first, what would it mean for humanity to reach anything approximating global connectivity and then, what might that likely mean to individuals?
To some extent how people—as both individuals and aggregations of individuals—would use global connectivity determines what retailers and consumer branders could and couldn’t do in a totally connected world.
Socially evolving into a truly digital species would have a profound impact on culture, geopolitics and macroeconomics.
But there is only so much connectivity any individual member of the human race can sustain. Take Facebook as a mini-example. Outside of celebrities, how many current users reach the 5,000 “friend” limit? The answer, of course, is precious few because it would be nearly impossible for any individual to be regularly engaged with 5,000 other people.
So, now to the questions at hand.
Brands and retailers would face two separate challenges.
Unless a retailer were REALLY global, i.e., they operated at scale in every significant market and/or were primarily an e-tailer, global connectivity might offer less than appears at first blush. So, if you are Amazon.com the world suddenly becomes an even more attractive oyster. If you’re Barnes & Noble, you have a choice of servicing your physical markets and maintaining a sub-optimized web business, or closing out of physical retail and focusing on trying to beat Amazon at its own game.
For branders, the scenario is somewhat different, as long as they define their mission as creating demand rather than worrying about fulfilling it.
Of course, every opportunity can also be a threat and global connectivity would also exacerbate the problems currently associated with segmentation, political and cultural correctness and language.
Today, the Internet is a group of very large scale and fully integrated computer systems. The ownership and control of these systems is now largely in the hands of US based corporations. Both India and China have technological aspirations that include separate and competitive parallel connectivity. As the world wide internet continues to expand in user and site numbers, certain necessities will make it easier to compete and provide support for users at acceptable profit taking costs, making the competition described here inevitable.
The internet evolution to full IP-6 protocol and then the following settlement into IP-8 protocol will not only greatly reduce hacking and internet scheming and theft, it will also play a great part in opening the Net to parallel competition. While this sounds great for the future of e-commerce, there are many corporations unwilling to accept the competitive promise of this openness. Therein lies the impasse to the near future of internet for everyone, forever.
Brands and retailers alike have everything to gain by becoming actively involved in the stated objectives of Internet.org. Do the math—an additional 4.3 BILLION shoppers! The economic reality drives Mr. Zuckerberg’s comments and intentions.
It’s great to be magnanimous when you know that revenue is behind a politically correct initiative. Brands would be well advised to actively participate. Imagine the spectrum of new opportunities for a brand like P&G to new global customers!
Because of the Internet, the world is smaller. Local brands are bigger—with a national and even international presence. All that is good.
Then there are challenges. Retailers and their products have become commoditized. Customers can shop from their computers at home or price shop in stores with their mobile devices. I think the good outweighs the bad.
Retailers that want to have a bigger presence now have the opportunity to do so. That’s a long way to get to the answer: Yes, some retail companies and brands should contribute to the Internet.org connectivity effort.
The impact of more folks being connected would certainly depend upon whether these late adapters would be actively or passively engaged, if given the chance to connect.
In my mind, those that are not connected currently are either disinterested, living in a country or area where connectivity is expensive or impossible, or more likely…a member of a socio-economic group that is inhibited in terms of income or age.
Following this train of thought to its logical conclusion, I would think the majority of the current “unconnected” will likely not have much if any impact on retailers and brands going forward. If they were presented the opportunity to engage, they would likely not have the means or the interest to do so in an active way.
As in all things, there would be exceptions, but overall, the 20% of really engaged internet users are still likely to account for 80% of the online economic activity, no matter how big the universe of users.
I think Mr. Zuckerberg and friends should first apply their considerable intellects to seek ways to feed, assure safety, and provide clean water and economic opportunity to the poorest 1.2 billion individuals on our planet.
Then talk to me about universal connectivity.
I doubt this will shock Ken Lonyai—but he and I evidently travel in different places. Due to rugged terrain and a woefully under-gunned effort to bring internet service to rural Appalachia, I recently gave up and invested in a private network for the cove.
There are literally millions of consumers with billions of dollars of disposable income that still only have wireless service at their places of work, schools or downtown coffee shops. Not that these people are internet illiterates—quite the opposite! But imagine what will happen when they have unlimited browsing/buying opportunities in their leisure time at home!
This isn’t just about third world countries and Ryan’s concerns over the future development of humanity.
When one considers that 80% of world commerce, and 92% of world commercial growth will come from outside the U.S., one can only conclude that connectivity will be a boon to retailers that aren’t stuck to their brick and mortar concepts.
Separately, and more important, connectivity changes the personal and geopolitical mindsets in the world. I see the differences in how internationally connected people think and those that are not; they are worlds apart. Connection breaks down prejudice. Connection brings power to the people. It is only good and vastly important. (And, I would add to Jim’s comment…when more people truly know about the 1.2 billion poorest through connection, their problems will start to be addressed.)
I would just like to add that the more people who become connected, the greater the knowledge shared and learned. This, in itself, is the real plus, IMHO.
As for retail and consumer brands? Even without connectivity, many third world countries are very aware of certain brands. The message is still reaching them and in some cases, its because of the brands philanthropic outreach. Connectivity could only raise the bar and perhaps introduce new brands. Not so sure the pay off to retail in those cases however those people need a lot more from retail than retail needs from them.
But if you take a look at Ben’s comments, there are certainly consumers around the world in ‘under wired’ situations that could really make a difference to the bottom line.
We should be involved! Again, IMHO.
Doesn’t this sound an awful lot like the problem of “too many labels on the shelf” that we see in stores…only on a mega scale? Does the typical consumer really need exposure to 500 stores,as opposed to 50, to buy 100 brands of sneakers, as opposed to 10? And while American companies may salivate at the thought of an expanded consumer base, they may not be so keen on the expanded competition that goes along with it.
Certainly greater connectivity is coming, and expanded opportunities will come with that, but the growth in the latter won’t be proportional to the former (at least not in a linear way).
There is a degree of self interest for all parties in this project since connectivity to the internet drives traffic, devices, bandwidth usage. Retailers obviously benefit from being able to project their brand over the internet to new buyers. The challenge will be that unlike media companies that provide virtual goods, retailers will have to address fulfillment issues with the new buyers.
You don’t have to leave the United States to see the impact of the data divide or the haves and have nots of internet access. Companies are less productive without internet access. Humans have a greater potential from knowledge gained from the internet. This is a most noble effort that will change the world. Just look what cell phones have achieved in some of the under developed countries. Retailers will have an opportunity to expand their customer base, but this is years away and thus not a good investment for them near term.