The Internet is filled with in-actionable information. That is information, that once understood, doesn't prompt any new action. Like the air-speed velocity of an African swallow. It might be interesting, but it's not quite actionable. It certainly is something that can be researched and discovered almost instantly.
For years, retailers have depended on the inequity of information on the part of the buyer to make a profits. I remember years ago when I was in high school and I went out to buy what every high-schooler wanted at the time. A booming car stereo. I went to the local Good Guys (or Circuit City) or whatever other thing it was called that's not in business any more. The guy behind the counter rattled off a bunch of terms like "Cross-over", "EQ", and "highs, mids, and lows" then pointed me over to an Alpine unit that cost $400. At that point, in 1993, he was my entire source of knowledge. There was really no other way I could find out more information about that unit and how well it compared to other units unless I waited for Car Audio Magazine to do a comparison story on it. And even then I'd have to wonder if it was a sponsored advertorial or a real story. What's more is, I really had no way of finding out if I was being charged a fair price for the unit or not. For all I knew the store 6 blocks away was selling the same unit for $200. So in 1993, or for that matter the thousands of years that proceeded 2008(ish), the retail world depended on this inequity of information to make money. Retailers could literally charge 1000% on most products without ever being questioned and consumers had no way of ever finding out if they'd be had. This is how retail has worked for thousands of years.
Last week I walked into a Bed Bath and Beyond to buy a fabric steamer for our green screen. There were 6 models on the shelf. I scanned all the UPC codes on each one and within seconds read dozens of reviews on each product and determine which was the right unit for me. What's more is I compared prices with several thousand other retailers around the country and decided that I was getting a fair price for the steamer I picked up. Bed Bath and Beyond was not able to make more than just a few percent profit on this bulky unit that takes up several feet of shelf space. Good for me, bad for them.
This phenomenon is very similar to what occurred in the late 1800s with the advent of the Telegraph. Prior to the Telegraph, speedy horsemen and train conductors would deliver information on pricing and trends from town to town to secure large profits on commodities. If the price of gold or cattle had gone down by 20% for example, the first vendor that had access to that information in a city could afford to lower his prices in anticipation of a new and cheaper shipment. He could potentially beat the competition by days. When the Telegraph first was introduced to the market place, the inequity of information widened and retailers had to learn to be more agile and update their information sources. It took decades for world to catch up to this new method of communication. In the mean time some extreme fortunes were made on day old information. Some today liken it to knowing the lottery numbers, days before they're announced. Imagine if you, in California, know something about the price of gold days before anyone else did.
Consider that what I was able to do with my iPhone is still not available to more than 70% of the US population. What will become of retail when there's always some vendor, somewhere across the country that's willing to make only pennies on the sale of the same product? You guessed it, they can't survive.
Many brands are keenly aware of this phenomenon and are putting in measures to correct for it. LuluLemon, Oakley, and Apple for example have retail stores of their own and fix prices on their branded products so the consumer is always aware and confident of the pricing they're getting.
This ever narrowing information gap applies to far more than retail however. It applies to everything. If you had real-time, actionable information about every company listed on the NYSE for example, you might make some better trades. But if everyone had the same information instantly, what would happen? Mind you I'm not talking about news, I'm talking about actionable, decision-ready information. For instance, imagine a decision support system that would determine the price of Oranges based on thousands of metrics and could also provide you with actual demand information world wide, minute by minute. Now imagine that information was available to everyone. How difficult would it be to make money trading Oranges then?
It is difficult to imagine that the information gap can get so narrow. But who would have thought ten years ago that I, the consumer, would be able to stand inside a store, and find out the prices for thousands of competing products and vendors within seconds and make actionable decision about my purchase?
Online shopping engines like Amazon will eventually eradicate all retailers. But what will become of the marketplace that runs capitalism when the information gap collapses? Will the spirit of competition be enough to win? Only time will tell.
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