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Digital undivide: Losing customers to the web? Find your niche

June 11, 2014

by Harrison Chastang

It’s almost summer, the time when many people hit the road for weddings, graduations, family reunions, conventions, music festivals and vacations. Summertime is a peak travel season where hotels and vacation resorts in many cities are either booked or charging premium rates that the average traveler can’t afford.

Nothing online can compete with a Memorial Day Parade: Samba Funk marches through Mosswood Park in Oakland … live! – Photo: Harrison Chastang

Nothing online can compete with a Memorial Day Parade: Samba Funk marches through Mosswood Park in Oakland … live! – Photo: Harrison Chastang

Technology offers several options for finding rooms when hotel websites are sold out or room prices are far above your budget range. Many of the established travel websites such as Hotwire, Expedia and Priceline offer hotel rooms that are substantially less expensive than what’s posted elsewhere on the Internet.

Another inexpensive alternative to renting from a major hotel chain during peak travel times may be to stay at a private vacation home, condo, timeshare or spare room. Affordable rooms are available at online sites like Craigslist and AirBnB for most destinations any time of the year, even at times when affordable hotel rooms are usually very hard to find.

In 1994, nearly all travel reservations were made via phone or in person with airline, hotel and car rental representatives and travel agents. But today, most leisure travel is booked by individuals at online travel sites. The few travel agents still in business book corporate travel or specialize in niche travel such as cruises.

Taxi and airport shuttle drivers are also facing stiff competition from digital hourly car rental companies like ZipCar, City Car Share and BMW’s DriveNow. A registered member of a car share service reserves a car online, uses a digitally encoded card to unlock the car and returns the car at the end of the rental to a designated location. In many cities, a round trip cab fare is more than a two-hour car share rate.

The Google driverless car may seem like science fiction, but thousands of people who earned a living at airports driving shuttle buses have been replaced by computer-operated driverless shuttles. The future of some people who make a living behind the wheel is being threatened now by digital technology.

Controversial ride share programs like Lyft and Uber are considered a serious threat to the traditional taxi business. Most taxi drivers are independent contractors who say they can’t fairly compete with rideshare drivers who face far fewer regulations and lower operating costs than traditional taxis. Digital rideshare drivers set their own rates that average about a third to half of what taxis must charge.

Other local businesses that could soon be made obsolete by digital technology include florists, who are under intense competition from online vendors like Pro Flowers and 1-800 Flowers. These online companies can sell a bouquet of roses at a fraction of the cost neighborhood florists charge, even during high demand periods like Valentine’s Day and Mother’s Day. Online florists will deliver overnight to most U.S. locations, a service that is an additional cost for most neighborhood florists.

Silicon Valley billionaire Vinod Khosla recently said that digital technology – like the Da Vinci surgical robot and Star Trek-like wireless strips, body scanners and clips that monitor a person’s biometrics – is evidence that there will soon be no need for doctors.

Websites like WebMD can provide the general public extensive information about almost any disease or illness, but few people are ready to have digital technology replace doctors. While the medical profession is not going away anytime soon, many professions have all but disappeared in the last 20 years because of the Internet and digital technology.

The recent eviction of the San Francisco branch of Marcus Bookstore, the nation’s oldest Black owned bookstore, can be blamed in part to digitally driven changes in the retail book business that has made it extremely hard to operate a brick and mortar bookstore.

Bookstores around the country, from major chains like Borders Books to neighborhood and specialty bookstores like Marcus have been forced out of business by online retailers like Amazon.com that carry far more titles than any bookstore can keep in their stores. Prices for online books are almost always less expensive than what physical bookstores must charge and online retailers can deliver in 24 hours, where it may take weeks for a local bookstore to order a book. The popularity of e-books that can be downloaded to computers and handheld devices has also contributed to the demise of the neighborhood bookstore.

The retail book business is one of many industries blindsided by the 21st century industrial-business revolution that has eliminated entire professions. Twenty years ago, millions of people earned a living in the photography, travel and retail music video industries. Today Kodak – a company that once employed many thousands of people around the country to manufacture, process and distribute still film, cameras, photo paper and photo supplies – is bankrupt thanks to digital photography.

In the mid-1990s, Tower Records, Virgin Music and Blockbuster Video stores were the places to go to purchase records, CDs and videos. Online media sites like iTunes, Rhapsody, Pandora and Netflix have turned once-vibrant neighborhood music and video retail outlets into empty storefronts, resulting in the layoffs of thousands of employees, from the security guard to top management.

Consumers are finding fewer and fewer reasons to visit neighborhood printers. Millions of people, who a generation ago would utilize local printers for business cards, fliers, wedding announcements and other printed items, are doing the work themselves on home or office printers that often match the quality of print shops. The new generation of home and office printers/scanners/copiers can wirelessly transmit and receive PDF files, print, collate and staple large numbers of high quality documents.

What can be done to make sure your business does not suffer the same fate of Blockbuster, Borders, Tower Records and local businesses that have disappeared due to changes in digital technology?

Business owners need to create a reason for their customers to do business with them instead of going to corporate online sites. Customers often are willing to pay more to support a local business if that business provides a special service or expertise not available online.

Local customers may also be willing to pay more to work with brick and mortar business because if there are problems or questions, the customer knows they can reach a live person rather than a faceless customer service website or voicemail of an online only website.

Businesses must also be willing to quickly reinvent themselves and offer new products and services. Record and video stores that once competed with Tower and Blockbuster now specialize in unique, hard to find and out of print vinyl records, CDs and videos, music and movie posters, T-shirts and other paraphernalia.

Taxi drivers who once would just pick up and drop off fares with little interaction now often present passengers a business card with the driver’s email and webpage with a request to call or text the driver personally when they need a ride rather than calling the taxi’s dispatch line.

Creative florists incorporate event planning into their business so that in addition to providing flowers, they also offer event planning and using their expertise as to interact with other local businesses.

Bookstores are also reinventing themselves as coffeehouses and music performance venues where customers who come for the coffee or music can browse and purchase books between music sets or after that second mocha.

In addition to cultivating local demand for products and services, it is critical that brick and mortar businesses have some type of interactive internet presence, from a full blown e-commerce site to a simple but attractive website or Facebook page.

These critical changes will help improve local businesses’ chance for survival in this progressively digital age. Technological advances increase convenience and customer satisfaction, and brick and mortar businesses must adapt to maintain their presence in this “digital undivide.”

Harrison Chastang, news director at KPOO 89.5 FM, 1329 Divisadero, San Francisco, CA 94115, (415) 346-5373, and kpoo.com, a historic beacon in the Black community and one of the few remaining Black owned and controlled radio stations in the country. Tune in his news show Wednesdays, Thursdays and Fridays at 5:30 p.m., his jazz shows Tuesdays at 6 p.m. and Sundays at 7 p.m., and his Computer Show every first Wednesday at 6-8 p.m. He can be reached at Harrison@kpoo.com.

 

 

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