Search and Shelter

Mary Meeker last week presented her annually awaited Internet Trends report. Top of the agenda was that smartphone ownership – a key driver of global internet usage – has started to reach saturation point. Voice search is seen as the next big thing. Importantly, rates of adoption of, and disruption by, new technology are accelerating, on account of the globalisation of brands and platforms (compare 80 years for the largescale adoption of the dishwasher vs 10-years for the consumer internet). The report strays into the subject of spending on ‘shelter’ (grouped with pensions, insurance and healthcare as the necessities on which US consumers are spending an increased share of wallet). Meeker compares falling grocery prices (driven down due to innovation) with rising shelter (real estate) costs, where there has been comparatively little innovation and suggests that this is not sustainable. She hypothesises that users of real estate will, at a growing rate, look to contain such costs by ‘increasing the utility of the space they have’ rather than expanding. Airbnb is cited as an example of this, with 57% of hosts using the earnings to stay in the home that they are listing, rather than as a pure investment.