In 2000, people only bought clothes they’d seen, felt and tried on. And, in the aftermath of the dotcom bubble, few dared tamper with the formula. One happy meddler, however, included Natalie Massenet, founder of NET-A-PORTER, the online designer retailer. In the face of mounting scepticism, the Anglo-French businesswoman ignored naysayers who insisted a shop without a store was no such thing, and then transformed the industry by introducing same day delivery to Greater London and an enticing 28-day return policy with free courier collection. Each added trust and flexibility to a digital retail market that lacked both.

"Immediacy was an invaluable form of consumption, and supply models would need to be revolutionised."

The concept of a rapid delivery was seen as a luxury only offered to the high-end market. Then, something surprising happened. Over the next decade, several brands started to take seriously the notion that immediacy was an invaluable form of consumption, and supply models would need to be revolutionised for the potential to cut delivery time.

"Apple transformed the music industry with iTunes, offering instant downloads of almost every imaginable song or album."

Apple transformed the music industry with iTunes, offering instant downloads of almost every imaginable song or album. Ocado broke the mould with next day grocery deliveries. Amazon Kindle rewrote the rules on books; Netflix on films; Spotify on streaming; and Uber gave power to the people with taxis summoned to your doorstep in a matter of minutes. Even financiers were getting in on the act with flash traders disrupting deals and making billions on microsecond deals – see Michael Lewis’ book, Flash Boys.

Businesses are now experimenting with ways in which they can scratch our immediacy itch. Amazon is delivering groceries within hours or tinkering with traffic-beating drones. Boundaries are being pushed, both technically and legally, and the 30-minute delivery is beginning to look like a reality. Even traditional bricks and mortar businesses like Argos are reworking their logistics models to offer same day delivery if ordered by 6pm, while Walmart and Target are looking closely at drone delivery given that 70% of Americans live within 15 miles of either store[1]. It’s a case of adapt or die.

"Londoners were prepared to wait seven minutes for a taxi in 2014, but only five minutes in 2015."

In the last couple of years, the speed of speed has become crucially important and pervasive in everyday life. A product of two things: increased processing power in our constantly-clutched smartphones, and the advent of 4G data that gives data downloads a turbo boost. Now, we can watch the latest blockbuster on the bus, swipe right through 100 potential life partners over breakfast, buy a new dress while ordering a coffee or connect with every taxi driver in town at the touch of a button. And it’s changing our expectations and the way that we think. Uber themselves conducted research in 2016 that showed Londoners were prepared to wait seven minutes for a taxi in 2014, but only five minutes in 2015. Our patience quotient is decreasing and our need for instant gratification increasing. Uber’s children are now discovering, as the sadly-departed Carrie Fisher put it, “Instant gratification takes too long”.

"Websites are discovering that 40% of visitors are lost if a page takes three seconds to load."

We crave connectivity and immediacy. Depending on which study you believe, people look at their phones between 80 and 200 times a day, checking for new messages, friend requests, status updates, news flashes and so the list goes on.  Our attention spans are decreasing. In 2015 Microsoft in Canada did a study that showed that the amount of time spent concentrating on a task without becoming distracted was a mere eight seconds, down from 12 seconds in 2000[2]– prompting Microsoft CEO Satya Nadella to proclaim, “The true scarce commodity of the near future will be human attention”. So much so that retail websites are discovering that 40% of visitors are lost if a page takes three seconds to load. That’s a third of the time it took you to read the last sentence.

But is speed everything? Do seconds matter? Although for years we have been able to adjust our heating remotely or turn down the lighting from our smartphone, the ‘Internet of Things’ is only just beginning to cut its teeth and pre-emption is on the rise. So our fridge will automatically reorder our favourite soda or milk when we run low, negating our need to even think about how long it takes to arrive. Tesla cars now automatically download the latest product updates at night when they are connected to your home WiFi to tweak performance or add new capabilities, the latest of which allowed vehicles to be summoned on autopilot from a smartphone. Time is no longer of the essence.

Hybrid analogue/digital businesses whose focus is on customer service instead of immediacy are also on the rise. Amazon Go’s ‘radical’ new concept is an actual physical store that consumers can actually visit, albeit with no checkouts or lines and everything tracked through computer vision and sensors. While the UK’s online food box kings Abel & Cole, often hold the keys to people’s homes and let themselves in to put the box in the kitchen or the perishables in the fridge.

So, does time matter? That will remain to be seen. What does matter is the constant reinvention of businesses in order to adapt to an increasingly fast-moving world. As Warren Buffet puts it”…the thing to do is find a good business and stick with it” but with a little bit of old school Charles Darwin thrown in “It is not the strongest species that survive, nor the most intelligent, but the most responsive to change”. Identifying how robust and responsive a business’ approach is to change has become integral in selecting the right companies to invest in. The pace of digital disruption is only likely to increase, so businesses that are adaptable and fleet of foot will become the next generation of market leaders.

[1] Business Insider – Walmart and Target Could Beat Amazon on Drone Delivery – Camhi, Pandolph & Newman – April 2017

[2] Microsoft Attention Spans Research Report – 2015


This article is designed to throw an everyday lens on some of the issues being discussed and debated by investors across the world; it is not research, so please do not interpret it as a recommendation for your personal investments. If something has piqued your interest and you would like to find out more or discuss what investments might be suitable for you, please contact one of our Investment Managers on 020 7337 0777.

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