The only constant is change.
The Internet has changed everything; pervasive access to mass network connectivity combined with the rise in mobile usage has created a form of personal empowerment that has not been experienced since the combined mass adoption of the motor car, the telephone and the TV. Those processes were and still are largely a societal benefit that is most fully experienced in developed economies, but the Internet has already broken down that barrier. We are in the age of almost instant one to one communication; where the ‘water cooler’ moment once needed 24 hours for messages to be shared, is now experienced in minutes and seconds. This, of course, is a reflection of the power of the Social media platforms, but it would be a fallacy to assume that just by embracing such platforms, brands are on the path to a successful digital strategy.
Where would a brand be today if it had bet its success on being aligned with the audiences who frequented AOL or MySpace?
What was seen as the well-established business processes of the 20th century are now all up for a fundamental reassessment and the pace of change is also accelerating. In reality, the Internet is not a single entity – it is a network and a technology framework, as well as a means of access and disintermediation. The term World Wide Web better describes the opportunity that is on offer, however, it should be seen as both a 3-dimensional structure and a platform for new business processes, rather than a simple 2-D framework that is somewhat akin to a spider’s web, but even that represents a potentially treacherous structure to navigate. We are beyond the basic X-Y linear graph framework, now we also need to factor in and embrace the Z-axis in the formation of innovative and transformative opportunities.
Disintermediation – the new normal
The WWW enables disintermediation that is at the very heart of the shift – because if you are not taking steps out of the commercial, distribution and customer engagement processes, the competition surely is. What is the most important purchase that a customer will make? The next one. This might sound like a simplistic truism, but it’s the basis of all commerce. How does a brand successfully engage with the new tribes; Baby Boomers, Gen X, Gen Y, Gen Z and beyond? There is also the underlying difference between how the WWW is used by both Women and Men within these tribes and their buying expectations are also very different. Browsing in itself means something different and in turn has morphed into Showrooming – the process whereby a physical retail outlet is just seen as the window to view and possibly evaluate a product, before purchasing it online and also for a better price. The trade-off is a lower price for a slightly later acquisition – but even this delay is being re-dialled as delivery services become more agile and responsive.
Some examples of businesses that only exist because of the WWW
The biggest On-line Retailer on the Planet. With a market cap of more than triple that of Walmart, this gives Amazon unrivalled financial fire-power to take on any competitor across multiple sectors, from retail to technology. One of its key strengths is that it is the epitome of a big data aggregator and analyser and engages with its customers to pro-actively influence their next purchase. But what happens if Facebook decides to take them on?A technology start-up in 1998 that has resulted in the birth of the biggest Digital Wallet service in the world. Supporting over 230m users and 2.2bn transactions, now with a market cap of over $88bn, PayPal created a new secure service model that is unmatched – but how will it cope with the new wave of Blockchain technology?
Founded in only 2011 and now reaching over 3.2m subscribers, the Dollar Shave Club has defined the process of sector disruption and disintermediation. It has subsequently been acquired by Unilever for a reported $1bn but the question I pose is – ‘how does the corporate culture mesh with the original independent approach’?
All three examples are built by WWW and tech-savvy entrepreneurs and are mainly powered by disintermediation. But how does an established company or brand create its own place in this new WWW-shaped environment? Technology alone is not the only key to a successful digital future – ask analog-era technology leaders like Kodak or Xerox.
Is Omnichannel the answer?
As mentioned, all traditional business processes are up for grabs in this period of rapid transformation. The high street is no longer an automatic shopping destination, neither is the out of town retail park or superstore – but an agile pop-up store might be. The own-branded department store has given way to the bazaar-like store environment where designer brands jostle with own branded offerings. But between showrooming and price sensitivity, brands can no longer depend on the traditional B2B, then B2C retail food chain. So creating a definite D2C (Direct to Consumer) offer through the WWW is a must – especially as it also provides better margins as well as the direct connection to the payment process, the customer profile data that feeds the likes of Amazon and the tribal engagement opportunity that resonates through the $ Shave club.
Embracing innovation in this environment is an essential tool for realising new opportunities.
About the Author
Geof is an entrepreneur and serial inventor (holder of 8 patents), business mentor and thought leader (Innovation through Z-axis thinking). He is also a founding member of the team that created Krzana.com an AI powered, big data and social media search engine. He has over 40 years of commercial success in both media and technology and has built his track record on leading and delivering the changes wrought by Digital transformation and the WWW: in media, from the DTP revolution led by Apple, to 3D visualisation, the WWW and Big Data with SGI and as Director of New Business Initiatives at NDS (now Cisco) including IPTV and OTT Streaming (VP @ Quiptel.com). He is also a partner in his eponymous Independent Design and Ideas consultancy and enjoys the challenge of identifying and realising the opportunities presented through change.
Categories: Article, Geof Todd, Krzana, Opinion, Quiptel, technology, TODD Creative Services, TODD Creative Solutions
Great article. Paypal, of course, doesn’t just have to compete with blockchain currencies. It also has to compete with more direct competitors, like Venmo and Zelle, which are innovating more quickly and working with consumer banks to increase their market penetration.