Monday, August 21, 2017

Renting not buying will result in widespread and unexpected changes

Pew Research recently published research about the trend in the US to rent not buy a property. For the US read what is happening in Europe.

As you can see their is a slow structural change to the fabric of home ownership in the US that is effecting all ages.

This set me thinking about industries will be changed by this development. I am sure I have missed out many of them:

Realtors / Estate agents
DIY products and retailers
Property services
Home furnishing
Financial Services
The change might not result in an absolute loss of revenue but it will change where that revenue is generated. As can be seen, the move from buy to rent is not limited to young people. Dick Stroud

Bet you have never heard of the Local Consumer Commerce (LCC) Index. It is going down and that is worrying.

I have never heard of the Local Consumer Commerce (LCC) index. It is created from over 19 billion  credit and debit card transactions from over 59 million consumers in 15 major metropolitan areas in the US.

The index captures year-over-year growth in everyday spending across a range of consumer and merchant groups. The transaction-level data includes the zip codes of both the consumer and merchant so that it can identify local, place-based spending growth (i.e. how much money people are spending within their city of residence).

You can read about the index and see a larger version of the graphic on the J P Morgan web site.

The bottom line of this analysis shows:

Spending growth among consumers 55 and older declined 4.9 percentage points between December 2013 and December 2016.

Restaurant spending growth by consumers 55 and older declined by 8.8 percentage points over the same period.

Growth in spending on other services by consumers 55 and older also declined by 7.2 percentage points.

Why is this happening? My first thought was that older consumer are travelling further afield to spend their money (that might be true). Then I thought that more spend was online, but if this is the case then it would be reflected in all ages.

Another explanation, and one that I think is the most likely, is that older consumers are feeling the financial pinch far more than we realise. The book by Elizabeth White 'Unemployed, over 55 and faking normal' describes this phenomena.

In case you didn't notice, the figures refer to the change in the rate of growth, not the absolute level of growth. Dick Stroud

Sunday, August 20, 2017

Cera is adding the magic of technology to the business of providing premier home care services

The home care market is something of a battle zone. Local authorities are only willing to pay rock bottom prices for carers which results in horrible staff turnover levels. This article from the Guardian gives you a feel of how bad it can get.

I am sure there are lots of really good people working in the business but there are lots who are not the sorts you want looking after your aged mum and dad.

A care supplier called Cera has generated a lot of media coverage about it investments in an app that provide a decision support system - I think it also has a touch of AI mixed in as well. TechCrunch covered the story a while back.

If the company is as good at getting customers as it is as getting advisors then it is doing really well. They must need a big table when they all get together.

Undoubtedly, the tech magic is good for generating content and comment but it will not be the reason why Cera will succeed and achieve a position at the premier end of the care market. No doubt it will charge premier hourly rates and you might get access to an app but it is the dependability and skills of the people walking through your parent's front door that will determine if it succeeds or not.

The company has a good web site and has clearly attracted a lot of big name backers. Do have a look at the video - I think it reveals the type of target customer  - not somebody relying on the state for their care needs!

Now what it must do is deliver the care quality. An app would be great but is of secondary importance. Somehow I suspect the founders of the company understand that.

I am sure the company will do deals with Babylon and Uber as a demonstration of combining care and technology (a good idea) but these services are only as good as the quality of the doctors behind the screen and the driver behind the wheel.

I notice that there are some NHS Trusts using the service. I would love to know how that is funded and for how long.

Great to see a company trying to establish itself as the thought leader in the care industry, although that is not a difficult task. Dick Stroud