January brought the news that the music retailer HMV had gone into administration hard on the heels of Jessops and Comet.
All were victims of changes that meant their stores only became a shop window for their competition. I am guilty myself of checking out a rather nice camera in Jessops before going online with my smartphone to buy one for a ridiculous price which the store could not match.
HMV’s problems stemmed from the fact that everything it sold could be delivered online to a multifunction device, be it a book reader, a phone, or a games console. None of the music it sold needed a conventional record player. Nor is the quality of the material that important. Good is good enough, especially when you are sitting on a train listening to your favourite music.
All these companies have done their best to stay competitive and have, over the years, chopped out layers of middlemen and begun to deal direct with the manufacturers. But they are stuck with the legacy of shops — the one big cost their online competitors don’t have. It then becomes all about shifting volume.
Other sectors have followed a similar route. Try talking to someone at an airline about a booking. It’s impossible unless you are prepared to pay extra for it. That’s the equivalent of having an entrance fee to visit Marks & Spencer.
Construction has had its unfair share of firms going under in the last couple of years. Thankfully, the fundamental business model of construction cannot change that much. You cannot download a building like you can download a film, for example.
But in an online world, our industry is no different to anyone else’s — it’s about needing a credible presence. Many buildings are now being “built” online, that is what BIM is about and it is computing power and data management that makes it possible to work through the options quickly and economically. The same developments in ICT that have put paid to the likes of HMV and transformed the travel industry will change the way the construction industry will do business.
The lessons of HMV and Jessops still have a resonance in construction. They are, after all, our customers and employ, directly and indirectly, thousands of people. In the 1980s Jessops was a niche retailer with one shop near Leicester and people travelled miles to visit it. Jessops was a whole day out. You don’t get that with Amazon — I suppose that’s what meant by progress.
