How to Start an Online Business: Day Trade People's Attention
In the book, Boone and Kurt’s Contemporary Business, the authors define economics as “Economics, which analyzes the choices people and governments make in allocating scarce resources, affects each of us, because everyone is involved in producing, distributing, or simply consuming goods and services (Dave Kurtz).”
The macro and micro economics that affect business the most, is the trade of people’s attention in the digital marketplace. The microeconomics of people’s behavior in relation to their smart phone devices, have now disrupted the macroeconomics of global economy. Generations ago consumer behavior was consistent and predictable. Companies had a reliable platform to sell their products and services to consumers through. The internet came along and disrupted that process. In today’s marketplace, attention is the most important micro-level economic aspect to focus on. Why? Because everything is digital, mobile, and on the world-wide web. In 1997, retail companies were following brick and mortar business models. The micro-economics of today show those same companies are struggling to retain their share of the retail market.
Why is this micro-level economic struggle effecting so many retail malls, shopping plaza’s, and brick and mortar businesses? Because online shopping has been able to grab the attention of shoppers who previously would have gone to a department store. In a Forbes.com report, it states that there are 3,951 retail chains closing stores in 2017, with three retail companies closing all stores for good (Loeb). The consumer has the luxury of having a product they’ve ordered online, delivered to them same day, free of charge, and not have to deal with the headache of being racially profiled or worrying about size, returns, and customer service issues.
When people are at home after a long day of work, and they are watching their favorite television show, when a commercial break comes on they grab their mobile phone and hop online. Companies like Macy’s no longer have your attention during commercial breaks. People have become advertisement blind, where they often subconsciously ignore the ads. What are they paying attention to online? More than likely social media. The internet stole their attention away from big brands who run ads during popular television shows.
On a macro-level, radio shows no longer have access to consumers like they once did. Advertising has changed and in a lot of ways been replaced by free marketing on social media platforms (Jerry Smith). People are using their smart phones to listen to podcasts while they drive to work or go on their summer road trips. Those radio slots that companies used to buy no longer exist because the platform that they were using to reach their customers has shifted, and the market adjustment needed to course correct have been too late for a lot of large companies with outdated business models. Attention is the new equity and the access to the equity is through the world-wide web and social media networks fused with digital marketplaces.
When retail online businesses run by someone out of their apartment or home, can compete with Barnes and Nobles bookselling chain of stores, it’s because they’ve figured out a way to redirect Barnes and Nobles customer’s and their attention to media items within the digital marketplace. Barnes and Nobles commercials then become ignored by their customer buying products on Amazon.
As stated, this shows the importance of understanding macro and micro economics. Particularly to entrepreneurs who are looking to mitigate expenses and liabilities to their companies. Accomplishing something like this from a business perspective in 1997 was unheard of, yet twenty years later, many business opportunities are missed because people do not understand the macro and micro economics of trading for human attention.
Economics is fused into everything that you do and attention is at the core of what is behind social media and the internet. The sooner companies can understand on a micro-economic level how to attract the attention of consumers to their product or company in a way that the consumer truly cares about, businesses will roll with the tide and adjust as people move from one social media platform to the next over a decade, while keeping pace with the variance of human attention and where it is headed.
Clifford, Catherine. Why Everyone Will Have to Become an Entrepreneur (Infographic). 03 September 2013. 29 July 2017. <https://www.entrepreneur.com/article/228176?newsletter=true>.
Dave Kurtz, Susan Berston. Boone & Kurtz's Contemporary Business, 17th Edition. Hoeboken: Quad Graphics-Versailles, 2015.
Jerry Smith, Lucas Straw. Fed-Up Advertisers Stop Paying More for Smaller TV Audiences. 05 May 2017. 29 July 2017. <https://www.bloomberg.com/news/articles/2017-05-05/fed-up-advertisers-stop-paying-more-for-declining-tv-audiences>.
Kane, Libby. 'Shark Tank' investor: 'Entrepreneurs are the only people who will work 80 hours a week to avoid working 40 hours a week'. 13 July 2016. 29 July 2017.
Loeb, Walter. These 21 Retailers Are Closing 3,591 Stores -- Who Is Next? 20 March 2017. 29 July 2017. <https://www.forbes.com/sites/walterloeb/2017/03/20/these-21-retailers-are-closing-3591-stores-who-is-next/#57b683894854>.