Why don't businesses change?

I think you'll find they won't change because they can't.

Most small business owners have simply bought themselves a job. They don't earn big dollars, they work even harder than they would have if they were a PAYG employee and they have even less job security.

They certainly don't have the capital or the time available to invest in reinventing themselves.

In many cases, it's much easier for someone new to come in and start from scratch than it is for an existing business to reinvent itself.

Many businesses are largely mechanical in nature - particularly in retail and services - you do what you do, and that's all you do. The "this is how I've always done it" is the only way they know how because they don't have the skill, the desire, or the financing to innovate.

Keeping up with change requires innovation - and innovation is extremely difficult for an established small business - especially when there is the risk that your changes will not work and you've sunk your limited capital into something that won't show a return.

 

I think there's a big difference between real estate agencies and travel agencies.

For a start, most REAs still exist. Many travel agencies have gone out of business.

REAs are still required. As yet, there are not many alternatives for getting rentals or buying a property. While many physical shops exist, they do advertise extensively in many different media. They don't need to change their model significantly at this stage, they are mostly doing well with the way they are doing things. I still see people looking in shop windows.

However it's quite easy to book a trip without a TA. Flight Centre is one of the few survivors - a part of their business model has always been buying flights in bulk for a discount and selling them cheaper than their competitors. Many others have gone out of business.

My wife used to be a travel agent. She worked for an online accommodation booking agency for a number of years, but was made redundant from there too, as her role was outsourced overseas. She has had to retrain into disabled care.

While it's possible that some of the roles of a REA could be lost to online only roles, I can't see the property management roles disappearing (though it's possible the roles could change).

 

Travel agents are largely transactional in nature aren't they? Much easier to disrupt a transactional business, since loyalty is far less important.

While Real Estate Agents also facilitate transactions - they are very large and emotionally difficult transactions, so relationship management is still critical. This is why I feel that online agents haven't yet gained real traction - because there is still a large amount of handholding involved that you simply can't get online.

Not suggesting that online agents can't succeed - but I don't think they will ever kill off local real estate agents.

Lots of niche retail has lost out to online - look at electronics speciality stores like Tandy, Dick Smith, Jaycar. Only Jaycar survives and then only in small dingy back-street shops - most likely heavily supported by their online presence.

Many online stores I've bought from have a shopfront somewhere - these are the guys that will survive - the ones who have been able to innovate by adding a well managed online shop to their physical presence.

Same with computer hardware and musical equipment - I buy all my stuff online from places that also have a physical presence. In some cases, there is an element of security there too - since I know that I can always drive across town and physically return something or at least discuss with staff if I have warranty issues. Warranty returns become far more problematic if you have to pay for shipping as well!

 

Our local fish and chip shop has been selling the same delicious greasy fried food ever since we've lived in the area (over 20 years). They could probably do with some regeneration though