Thursday, November 21, 2013

The Next Big Thing

Note: "updates" are farther down. 

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The Next Big Things

Private museums as "anchor destinations" in dying malls. Posted May 14, 2017. See this article in The Dallas Morning News

Grocery products: upstream (production); midstream (distribution centers); downstream (retail stores). To cut costs, Kellogg will eliminate midstream (distribution centers), instead delivering directly to retailers' warehouses. I assume other producers/wholesales will follow suit. February 9, 2017.

Airline terminal upgrades, infrastructure CNBC had nice segment on need for larger, more modern airline terminals. Posted January 31, 2017.

Jobs: drones. Operators: law enforcement; weather channels; news agencies; logistics; marketing; advertising; tabloid; city planners; military; IRS, tax assessments; insurance adjusting (hail crop damage); farming. Posted January 10, 2017.

Drones. Start here

Last mile delivery: Amazon delivers within two hours in 30 cities across the US, noted December 22, 2016. From Business Insider, July, 2016.  Last mile logistics: Amazon vs FedEx vs Startups.

Gigantic tablets -- anything bigger than iPad Pro -- anything greater than 13 inches for a tablet

3.5 mm headphone jack: 1950s technology. Apple removed the headphone jack with the iPhone 7 release, September, 2016. Steve Jobs would have removed the jack two iPhone iterations earlier. Ten years from now, folks will have forgotten all about the headphone jack in Apple products.

Data centers / power consumption: here

Uber, Lyft: here

Magazine ad pages: here

Cuba: I'm a year late on this one. I don't know how much, if anything I will blog on this one, but Cuba is going to be the big "money" story of 2016 - 2017. -- Posted March 19, 2016. [Updated, January 18, 2017: it looks like I was way, way, way wrong on this one. Cuba didn't want to play along.]

Storage units as pied-à-terre: in The Wall Street Journal, March 2, 2016; I had thoughts on this but never posted until I saw this; missed it. Storage units, now with space to cook, relax and entertain. Traditional industrial park-style storage facilities are giving way to customized spaces with kitchens, reclaimed wood and stylish seating areas. [Plural is same spelling as singular.]

Batteries. Start here. The war over lithium. This may have been the shot across the bow

Amazon and/or Facebook will get into the flight reservation business (one or the other will buy Travelocity, Orbitz, or start fresh). October 23, 2015. Three stories converge: Amazon reports surprise profit 3Q15; Facebook introduces universal search across entire social network; and, airlines try to win customer loyalty by keeping fliers informed

Yield cos: another way to invest in solar energy, May 9, 2015.

Truck stops: national shortage of truck stops even as US mandates more frequent rest stops for truckers; posted January 21, 2015.

Update on Netflix: global rollout and subscriber growth surprise Wall Street; stock surges 20%; posted January 21, 2015. 

National EV charging grid: see this post for background; posted January 14, 2015
  • the blueprint is already there: the US interstate system and major federal highways
  • government/private sector need to establish commonality in charging stations
  • government/private sector need to fund
NG corridors could have used this help but we are somewhat beyond this as the "next big thing"

Same-Day Delivery -- Original Post

Back on March 21, 2013, I posted a long note that I really enjoyed writing: "the next big thing."

I was thinking about that again, as I was pondering ObamaCare. There are tectonic changes occurring. ObamaCare is just one of them (by the way, I've buried a note on ObamaCare for the time-date stamp). Mobile entertainment is another. The US energy revolution is another, and that's pretty much what I think about at "the big stories."

But there are other big stories.

I can't do it now because I'm at Starbucks, but if I recall, I might reproduce page 76 in the most recent issue of Bloomberg Businessweek to talk about "the next big thing." It's not being talked about at the moment, but I expect to see a story in TWSJ sometime in the next six months on this very story. The story: same-day package delivery.

Some dots to connect:
  • eBay is now incorporating Toys "R" Us; Target; Home Depot; Office Depot; GNC; RadioShack; Walgreen's; Best Buy; and, others into its website
  • Wal-Mart hopes to generate more sales from its web operations,
  • Amazon now has two-day delivery; will go to same-day delivery
  • USPS has contract with Amazon to make Sunday deliveries
I haven't delivered pizza and I haven't ordered delivered pizza so I don't know what the delivery charge is, but I believe it's almost nil, incorporated in the price of the pizza, and the majority of the delivery cost might be in the "tip." Are we talking a buck, two bucks?

How much is Amazon charging for same day delivery? $8.99 on top of the $79 annual fee.

How much is Wal-Mart charging for same day delivery? $10.00.

Page 76 of the Bloomberg Businessweek "special issue" has at least a dozen hard-to-read little dialogue boxes; I doubt many readers have read any of them. Hidden in the lower right-hand corner is this note:
In some cases, Wal-Mart uses third-party couriers to send items from one of its 4,700 stores. Wal-Mart employees sometimes deliver products by car.
The interesting thing: Bloomberg Businessweek fails to mention the new USPS-Amazon Sunday delivery contract.

Yesterday, I was talking to a CEO of a trucking company here in the Ft Worth-Dallas metroplex. He now contracts with FedEx and UPS to deliver.

Companies wishing to deliver same day have the same problem telecom and cable television providers have: the last mile. Within a couple of years there will be a start-up, "last-mile same-day delivery" company. Trust me. It's not rocket science. It's possible it might be a spin-off or a division of UPS. [Update, March 25, 2017 -- here in DFW area, we have a "last-mile, same-day delivery company." It is called Lone Star Logistics.]

Nuts and bolts:
  • 0600 - 0800: same days orders placed by consumer on-line
  • 0800 - 1000: LMSDD trucks do the milk-run circuit (neighborhood Wal-Mart, Target, Albertsons, Toys "R" Us, Walgreen's, Best Buy, etc).
  • 1000 - 1200: sort, re-route at neighborhood LMSDD sorting center
  • 1200 - 1800: same day delivery; high school kids could do the 1500 - 1800 runs
If pizza makers can make money on a one-dollar delivery charge, think how LMSDD will do on $10/neighborhood delivery.

Updates

March 25, 2017: Netflix: the monster that's eating Hollywood -- WSJ.

January 18, 2017: Netflix smashes expectations; shares surge

November 15, 2016: NASA, ATT to build national drone tracking system. Huge.

May 26, 2016: Apple interested in Netflix? Rumors.

April 16, 2015: Netflix surges on huge subscriber growth -- up 16% / $76 dollars today. 

July 24, 2014: the next big thing -- mobile payments

January 22, 2014: Netflix surges almost $60 as soon as earnings announced. Almost 20% surge.

December 12, 2013: Today we learned that Netflix earned more Golden Globe nominations than CBSNCBABC combined -- at  least that's the Drudge link; no reason to doubt it, but I'm not going to check. I'm not a detail person; I'm more interested in the big picture.

November 21, 2013: same-day package delivery.

October 21, 2013: Subscriber growth; beats estimates -- Netflix beats by $0.03, reports revs in-line; guides Q4 EPS above consensus.: Reports Q3 (Sep) earnings of $0.52 per share, $0.03 better than the Capital IQ Consensus Estimate of $0.49; revenues rose 22.2% year/year to $1.11 bln vs the $1.1 bln consensus. Co issues upside guidance for Q4, sees EPS of $0.47-0.73, excluding non-recurring items, vs. $0.44 Capital IQ Consensus Estimate. Up about $55 for the day.
August 20, 2013: Netflix grabs multi-year deal --
... first-run rights to Weinstein films after they appear in theaters will bring new content to Netflix to help the company gain subscribers and compete with cable channels such as HBO and Showtime. 
July 22, 2013: today's earning's headline --incredible -- the next big thing --
  • Netflix gains 630K subscribers as 2Q earnings soar Netflix's 2nd-quarter earnings quadruple as 'Arrested Development' attracts more subscriber. The story at CNBC:
Netflix's second-quarter earnings more than quadrupled as the revival of the comedy series "Arrested Development" attracted more subscribers.
Despite the financial gains, the report released Monday flopped on Wall Street because the return of new "Arrested Development" episodes after a seven-year absence didn't add as many U.S. subscribers as many investors had been hoping. Netflix's high-flying stock sank $20.96, or 8 percent, to $241 in extended trading after the numbers came out.
June 17, 2013: DreamWorks becomes a television company; inks exclusive deal with Netflix; Netflix soars. 

June 15, 2013: kiosk ordering in fast-food restaurants, perhaps in sit-down fancy restaurants; employers don't have to buy health care insurance for iPads

May 26, 2013: Netflix continues to soar. Now, with "Arrested Development." 

April 22, 2013: Netflix soars 20% after earnings beat

Netflix shot up more than 20 percent after the movie-rental company reported earnings that beat expectations.
The company posted first-quarter earnings excluding items of 31 cents a share, up from a loss of 8 cents a share in the year-earlier period.
Revenue increased to $1.02 billion from $870 million a year ago.
Analysts had expected Netflix to report earnings excluding items of 19 cents a share on $1.02 billion in revenue, according to a consensus estimate from Thomson Reuters.
March 28, 2013: Netflix: S&P 500′s Best Stock of 2013 (So Far)

March 22, 2013: I mentioned Apple's iPhone in the original post. It has just been announced (no links, story easily found):
For the ninth time in a row, iPhone ranks “Highest in Customer Satisfaction with Consumer Smartphones” by J.D. Power and Associates. iPhone ranked highest in a study that looked at the following categories: performance, physical design, features, and ease of operation. In fact, iPhone has ranked highest in each of these studies since the first iPhone was introduced.
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Housekeeping

Everything below is a cut-and-paste from the original "next big thing." Nothing below this line will be updated; all the updates are above.

Original Post 
First Posted March 21, 2013 
I think everyone enjoys trying to predict the "next big thing." Or at least "a" next big thing.

I was reminded of that at your school's book fair earlier this afternoon. I happened to see "Lego Crazy Action Contraptions" by Klutz.

Thirty years ago I started a Lego collection that eventually took on a life of its own. Our older daughter, your mom, never enjoyed Legos. Our younger daughter loves them as much today as she did then. For awhile, it looked like Lego might not survive (maybe ten, fifteen years ago). And then, with some incredible marketing efforts the company has thrived. Klutz's "Lego Crazy Action Contraptions" was another reminder of folks thinking outside the box.

At the book fair, I saw that Skippyjon Jones has a new book, Cirque de Ole. I happened to run across Skippyjon Jones some years ago, when it first came out, and could tell it was going to be huge, and it appears that it has. Good for Judy Schachner.

Years ago, before it was available, I saw a story in some now-defunct news magazine and told my wife that the "PT Cruiser" would be a huge hit. And it was.

Likewise, before the first episode of "30 Rock" aired, I knew that Tina Fey would be big; I just never imagined that BIG. I didn't think the show would do all that well (I was wrong) but that Tina Fey would do well.

I knew the iPad was going to be huge; I don't recall thinking much about the iPhone, but I knew the iPad had more uses than skeptics realized. The iPad has yet to live up to its potential but that's just a matter of time.  (I knew the "netbook" was doomed the minute I saw it. I think the "Surface" is likewise doomed.)

Back in 2007, when I started the milliondollarway blog, I knew the Bakken was going to be big. I didn't think it would be that BIG, but for North Dakota, I thought it would rank right up there with the last boom. Wow, was I wrong. The Bakken is much bigger than I ever imagined.

By the way, I deleted that first blog in a fit of insanity one night, and then started all over. I think the current milliondollarway blog dates back to 2009. I could be wrong. Haven't checked lately.

With regard to the Bakken, the biggest surprise: multi-well pads and rail.

My son-in-law thinks Vudu will be the next big thing. Perhaps in time. But not for awhile. Our discussion began with Apple and iTV. I suggested that "it" was all about "content," and, of course, that brought us to Netflix, Vudu, and Hulu. Vudu and Hulu have access to new movies sooner than Netflix. Yet Netflix is still well ahead of anyone else in that sector.

That made me question my assumption that "it" was all about "content." I think I'm wrong. "Content" is important, but within a month of release, new movies are available everywhere, so "content" alone is not the discriminator. "Content" is quickly becoming a commodity (with notable exceptions: NFL network, "made-for-Netflix" movies, as prime examples). Once "content" is a commodity, then something else drives the sector.
So, if it's not "content," what is it? "Accessibility." Accessibility includes "ease" of accessibility. All demographics can reach Netflix. Even my parents, well into their 80's and 90's can use snail mail to order Netflix DVDs, but unless it has to do with fishing, my dad would have no idea what "streaming" is,  much less be able to access it.

So, we'll see. For $7.99/month I have unlimited and "easy" access to Netflix; for $5.99 I can stream one movie from Vudu or pay "Target-" or "Wal-Mart-price" for the DVD itself. US mail and $7.99 / month / unlimited still beats the alternative. So we'll see. Vudu might be the next big thing but I don't see that for a few years. At least.

Back packs will become "a" next big thing. They already are in urban settings, not so much in rural areas.

I think LNG corridors will be "a" next big thing.

I think Facebook will surprise us; it will be "a" next big thing but only after it evolves to the next level to include a) gaming; b) better search; c) a music module; d) a YouTube-like video module; and, e) easier "home page" development.

All-electric vehicles as family cars are "dead." Hybrids aren't dead but it will be a long, steady slog for them to become mainstream.

Free wi-fi everywhere is just a matter of time. I don't know if one would call "free wi-fi everywhere" "a next big thing" but within a few years coffee shops won't stay in business if they don't offer free wi-fi. I do think that someone could yet come up with with a Barnes and Noble bookstore-coffee shop-internet cafe business plan that would work.  Except for college-centric Starbucks, most Starbucks coffee shops are pretty quiet after 6:00 pm. Just the opposite for most retail when they are very, very quiet before 10:00 am.

That brings us to a "cashless" society. Cyprus may be a "cashless" society by next Monday. Apple stores are cashless [update, April 16, 2015: according to Apple employee this past week, Apple retail stores will take cash]. I do think someone big is going to go cashless and that will change everything. Could Wal-Mart go cashless?  For those who don't have a credit card, or some type of mobile payment (SmartPhone, for example), they pay for a company cash card at customer service when they come in the door. 

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