Brett King and the Death of the Branch: Part 1
In Part One of this three-part series, King examines how Amazon, Apple and Kindle helped light the consumer fire for electronic commerce.
There’s a strong statistical argument to be made for disruptive technologies that change consumer behavior. I’ve argued the impact of this on branch banking extensively, starting with Branch Today, Gone Tomorrow and more recently in Chapter 3 of Bank 3.0, but I’m still faced with significant resistance in the retail banking industry at large. So I thought I’d share a statistical view of the triggers that result in the deconstruction of traditional distribution systems, and look at the evidence in the retail banking space.
The other interesting side effect of the disruption cycle is that in industries where the physical distribution layer is destroyed, incumbents rarely survive as the dominant distribution players. Look at books where the likes of Borders and Angus & Robertson failed in the past two years, Barnes & Noble still struggles to survive and Amazon absolutely dominates hardcover, paperback and eBook sales across the United States (and to some extent globally). Amazon is now the largest distribution player in book sales bar none – because it owned the new emerging distribution platform; i.e., the digital book and reader combined with the digital bookstore.
In the graph below we see the Kindle emerged to support the eBook platform in the late 2007 period and that by 2010 the effect on buying behavior is acute, with physical sales of MMPB (Mass Market Paperback Books) quickly undermined by eBook sales.