The internet has many times been hailed as one of the four horses of the apocalypse for several industries around the world. IBISWorld analysed the market to explore how some of these sectors are fighting the odds and even prospering.
Business information analysts IBISWorld has compiled a list of several business sectors that are surviving and even thriving in the age of the internet, despite the doom-sayers.
“While many prophesied the death of cinema, human resources, travel agencies, postal services, and even department stores in the face of increased online competition, what we have actually seen is resourceful operators repositioning their offering in order to compete and flourish, “ said Robert Bryant, IBISWorld General Manager (Australia).
1. Cinema screens did not go blank
Cinema has found ways to thrive despite the threat of digital piracy. Some technological innovations were important to keep cinema competitive, like 3D, but the main difference, according to IBISWorld, is that cinemas have evolved to became a social destination, a place where people come to be together and not only to see movies. Costumer service also played a big role in the survival of cinema, by offering services like merchandising and online booking. This way, cinemas have distinguished themselves by providing an experience difficult to replicate at home.
“Revenue for Australia’s cinema industry has increased at an average 3.8% per annum in the five years to 2010-11 (reaching $1.90 billion),” said Bryant.
2. Human resources agencies didn’t get the axe
Human resources agencies were pretty much declared dead when employment classifieds arrived online. But many of these agencies, instead of fighting the great threat, incorporated it in their way of doing business. These firms went online and created job boards thus finding a way to get one click away from potential employees and employers.
According to Bryant, “despite a tough 2008-09, Australia’s Employment Placement Services industry has largely recovered and is set to boost its revenue by 2.2% in 2010-11.”
3. Travel agents were not sent on a long vacation
Travel agents everywhere faced a big threat when airlines and other operators started to sell their products competitive prices directly to their customers over the internet. But travel agencies survived the change in large part due to superior customer service, keeping the industry’s revenue level stable over the last five years at $3.85 billion and IBISWorld expects the industry to grow at a rate of 1.8% per year over the next five years.
“While the internet allows for swift bookings, the research process can be time consuming and an experienced travel agent can offer instant advice and guidance, which is reassuring for many customers. In addition, many customers are still wary about making large purchases online,” said Bryant.
4. Postal services were not sent packing
Perhaps one of the most threatened business sectors was that of postal services, which many saw endangered by the rise of the email, banking options and online billing. But postal services actually saw an increase in revenue with the online retailing industry moving small parcels all around the world.
IBISWorld expects industry revenue to increase by 2.0% in 2010-11 (reaching $11.99 billion) and forecasts revenue to continue rising by an average annualised 2.1% over the coming five-year period.
5. Department stores were not put on indefinite lay-by
“The past five years have been difficult for many retailers, with the struggles faced by Coles Group in relation to Myer in 2006 seen as a sign of the times, retail pegged to migrate more towards discounters, specialists and the internet; and the reverberating effects of the global financial crisis,” said Bryant.
But many companies have innovated and gone online. With their buying power and reputations, these companies are able to attract more online customers than smaller competitors, thus incorporating the online threat into their business models and increasing their revenues, which are expected to increase by 1.0% in 2010-11, reaching $20.66 billion. IBISWorld expects an average annual growth of 1.6% over the next five years.
What other industries do think risk obsolescence and how can this risk be overcome?