November 30, 2015

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First Mediaworks

02/13/06 How The “Auction Culture” Will Affect Radio

For years, radio has been up in arms about the changing state of local retail. Almost every U.S. municipality has seen the demise of dozens, if not hundreds, of local retailers who could not compete when Wal-Mart, Target, Best Buy, and other large chains came to town. Area retailers who had advertised on radio gave way to big-box stores that, for the most part, were not local radio advertisers. Instead of local advertising, many national retailers do only national branding. The only localism comes from distribution of circulars in the local newspaper.

Though the retail big-box trend was tough on radio, the next trend may be tough on retailers. According to author Dan Nissanoff in his book FutureShop, second-hand shopping is the future of America. He says eBay and similar online companies will impose significant consequences on our economy and our businesses once these sites reach critical mass.

FutureShop forecasts a fundamental evolution of consumer behavior as a result of eBay's entrenchment into our society, slowly changing the way consumers buy new and used products. We are rapidly approaching a tipping point (driven by eBay's fast-growing liquidity in consumer goods) that is destined to impact deeply our consumer culture and perhaps change it forever.

As a central thesis, the book demonstrates our evolution into a “temporary ownership” society, as an online secondary market becomes increasingly accessible. It predicts how, what, and why we will buy in the future as a result of this trend and examines what this will mean for our economy, specifically for the companies that make the products traded on these sites. According to Nissanoff, “We will soon live in a world where the norm is to sell our $800 Jimmy Choo shoes after wearing them twice, where Verizon will automatically send us the newest, best, most high-tech mobile phone every six months, and where we'll lease our Rolex watches, instead of buying them.”

According to this book, the average family will ad an additional $1,000 to its discretionary spending by selling used items on eBay. This means more spending for local restaurants, movies, and personal items.

We in radio must stay tuned to retail trends that could impact our business. Learn how the shift will take place and how we as an industry can take advantage of it. For instance, I think the second-ownership trend allows your local advertisers to compete with national businesses. Their radio ads can build their online brands now offering auctions, inventory reductions, and other products and services.

Meanwhile, big retailers may not recognize the implications of this trend until it is too late. The trend may provide a sea change in all retail operations, just as digital photography revolutionized the camera and film business. By being on the forefront of change, radio can respond with solutions for those who recognize the trend and for those who refuse to acknowledge it. The auction culture will change the face of retail - and how radio is used and sold.

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