It’s a much-used phrase these days, but we are in the middle of the biggest technical innovation in history.
Our rate of adoption in using technology is at its highest point, and the speed in which computing can process is doubling every year – as show by this graphic below from the team at Gizmodo.
Digital has allowed businesses to spring up from everywhere, and to be able to compete with the ‘old guard’ in frighteningly quick time. The problem for the old guard though, is how they tracked their competition.
Anyone born before 1990 will remember how frequent milkmen and newspaper boys would be seen doing their morning rounds. In that time, milkmen competed with other milkmen, or local stores. They sold on price and convenience. And if they lost business, it was usually on price. Now, they compete with Amazon, Ocado, Deliveroo and even uber – as the huge switch to convenience-based shopping gives these companies the ability to interact with clients 24/7. One survey says that where almost half of the UK households had their milk delivered, there are now less than 5000 milkmen, servicing less than 1 million homes.
Netflix or Blockbuster
The comparison between Netflix and Blockbuster is a very lazily used option. But what is often ignored, is that Blockbuster once had the option to buy Netflix for ‘just $50m. Not only did they turn it down because Netflix at the time was making a loss, but they also failed to spot the potential threat to their business – online streaming. At the time, Netflix themselves weren’t doing too differently to the Blockbuster model, moving to a mailing service and struggling to compete with Blockbusters “there when you want it” model.
Debenhams and House of Fraser are two well known, well established businesses. Debenhams themselves trace their beginnings all the way back to 1778, and they have grown by acquisition of similar chains throughout the last 200+ years. However, over the last 15 years Debenhams have failed to spot the trend in customer habits and react fast enough. Companies like ASOS, Prettylittlething, Boohoo.com and even Amazon have stolen market share off them. ASOS was born in just 2003, and Amazon started life in 1994 – and at the time, clothing wasn’t even on their agenda.
As the darling/most hated of the retail giants (depending on your view), Amazon nonetheless are a great example of diversifying. Starting out as an online reseller of Music and videos. Later, they grew by acquisition, taking on other online sellers and expanding their portfolio into books, computer games and consumer electronics.
Amazon today are the 2nd largest employer in the US.
Due to Amazon’s expansion and acquisition, they now compete everyone from Wal-Mart, Tesco, the high street and the online retailers like ASOS, to Microsoft and Sky. They are the perfect example of a company that consistently innovates, looks for new streams, and isn’t afraid to take a dip into pools they normally don’t swim in – AWS holds more cloud share than Microsoft now, despite them launching AWS as a tool to track online activity and marketing originally.
What can the High Street Retailers do?
The question for these high street retailers now, is how they strike back. Frankly, a large chunk of them will never recover – they may survive and continue to trade, but they will never be the main player in their market again. Fingers should be pointed at those at the top of these companies. These are the people who, under their watch, have failed to accept the world changing around them, and the epitome of “we’ve always done it this way” of LinkedIn motivation posters fame.
When you look at the board of some of these big companies, a trend emerges. All very experienced people, years of previous history in the same industry, often born before 1980. The question is – how well do they understand the current world they trade in? Are they prepared to try something new or radical, to see if they can diversify and open whole new revenue streams?
Why are people like Jeff Bezos, Richard Branson, and even Mike Ashley, seen as ‘innovators’ or ‘wildcards’? Because they don’t do what’s expected. They refuse to accept that their business model is perfect, and they consistently look for new areas to explore. They also understand that the consumer model is shifting rapidly, and rather than react when it changes, they help shape the direction of change.
What are you doing about innovating your business?
If you are running your business today, where are you getting your advice from? How do you compare trends? There is so much data available, are you using it to really understand your customers and your people? With the data available, the risks should be greatly reduced if you are prepared to really listen to what your people are telling you.
If you read nothing else, read this…..
We are operating in a world, where the young generations coming through are being trained for jobs that don’t exist yet. Jobs that are currently plentiful, are being replaced by automation and robotics – go to your local grocery store and compare the number of manned tills vs self-serve. As the 2018 Future of Jobs report suggests, adoption of technology is continuing to ramp up, with 85% saying they will intend to adopt Big Data and Behavioural analytics by 2022. 10,000 years ago, mankind had just started to make bread. in 1973, we had evolved to the point that the world’s first mobile phone had been invented. Now, in 2019, over 35% of the world operates a smartphone, and the vast majority use it to order their bread to be delivered to a location of their choice in hours. Imagine how much further we will have advanced in 10 more years?
If the High street wants to survive this 4th industrial revolution, it’s time that people who sit at the top take a step back and decide whether their business is making the most of the technology and tools available to it. Building a website or an app is no longer the fix, it requires ideas and strategies from every department, from IT, marketing, HR and finance. A true, data driven, multi department strategy, with input from multiple generations, is the only way businesses will survive.