Death of a salesman II
Updated: Feb 27, 2019
One of the most prominent features of technology is that it shortens communicative distances. From living a primarily local life depending on low tech means of both communications and transportation, people can now live a global life and have direct communications with individuals and crowds located anywhere in the world at the touch of their finger. Whenever you introduce technology, it shortens some form of distance or communicational gap.
Following the first entry in this little series we talked about the coastal fishermen in Thorupstrand. How they were able to set up a direct supply line from small fishing boats to end consumers controlling all steps of the process. Cutting out the middle men.
The internet has been the primary commoditizing factor of services. In every market, retail is suffering from the onslaught of the e-shop. Every major brand now has its own to help contain customers. Every major retailer has its own to the same end. And EVERYONE is feeling the weight of tech giant AMAZON.
Relying on the major efficiency increase enabled by technology, e-shops usually offer lower prices and the convenience of delivery straight to the door. You can do most or all of your shopping sitting in the sofa with a cup of coffee. Your groceries or the entire Xmas shopping – same same. How you shop and what you shop online has changed over a very little timespan.
Consequently, physical shops are closing everywhere leaving "holes" in the row of high street shopping areas and especially in smaller urban communities. The competition is simply too intense. The only ones to survive and do well are specialized shops relying heavily on customer experience and advanced service design. Who consciously step up their value proposition.
RETAIL – THE MIDDLE MAN
In many respects, retail is a middle man. And the main reason they suffer is that technology has shortened the distance between producers and end users. If I can buy straight from Adidas, why would I visit a store? If I can access the full line of products, why would I visit a store carrying only a few items of the same line?
Adding insult to injury, the larger retailers get, the lower service levels they implement. Because employees are a major cost driver. By lowering service levels, retailers – likely unwantedly – entice you to shop online. If there is little or no personalized service, convenience wins.
To make matters worse, AMAZON is now opening physical shopping space as well. The difference is that you just grab what you need. The rest is taken care of by technology including instant online transfers of payment. So even here, technology gives you an edge.
THE TYRANNY OF COMMON SENSE
As Sir Ken Robinson says in one of his most famed TED talks, it's hard to know, what you take for granted. And the reason is that you take it for granted.
Staring annihilation straight in the face, retail is strangely confused about how to deal with it all. Paralyzed as they try to rely on thinking and technologies that used to work. Relying on entrenched basic convictions and the strategies they present.
They don't realize that EVERYTHING they do in a private setting is true for their business and business model as well. If I – as a private individual – buy online all the time – it would be a fair assessment that everybody else does too. And if this is true – how does it look for my company? How can I enable end users to buy straight from me? And if I'm a middle man in a retail function, how can upscale my value proposition?
The thing about principles is that they work in any setting. That's why they are principles. De-coding technology is about decoding the working principles. The implications of technology.
IT'S ALL B2C
Or yeah – "but this is in B2C". B2B is different you might think. But it's not. Its ALL B2C. Because of technology. End of paragraph. End of story.
So, if you think that just because you are in a B2B setting, the same rules and principles don't apply, you're wrong. Staying ahead of the game relies on your ability to
Digitize Convert analog information into data
Digitalize Adapt fully digitized processes
Transform Create new business models based on digitization and digitalization
All the same rules apply. Do you use cloud solutions (like e.g. Dropbox) as a private person? And if yes, why doesn't your company use cloud solutions? Do I use my smartphone to access and interact with companies? If yes, how do end users and customers interact with you using their smartphone? Do you think relations are the most valuable asset in your business? And if yes, why are you NOT on LinkedIn? Et cetera.
JUST ONE MORE THING
Sears – once the no. 1 retailer in the US – has just filed for bankruptcy. Founded in 1886, Sears was pioneering post order sales relying on a huge catalog. Later they moved into warehouses and became a household brand. A cultural phenomenon and reference – manifested in high-rise towers. Now they suffer the consequence of any other retailer. For retail, it’s a Kodak moment.
And by the way: If you were born before 1970 a "Kodak moment" is s photo opportunity. For millennials, it is the moment Kodak's business fell straight out of the sky. Whenever other business models fall straight out of the sky.