Broadly accessible technologies are changing customer experience and consumer behavior3. June 2021
Data and software driven business models on the rise1. July 2021
Startups have a much higher development velocity and eventually become meaningful market players fast
When we look at examples of startups or new market entrants appearing to gain market share, the reaction of established companies has sometimes been remarkably complacent.
- In 1196, Kodak stated that they expected digital photography to be printed rather than shared over digital platforms. As a cautious side note: Kodak acquired Ofoto in 2001 – a platform with the potential of being the precursor of Instagram, but discontinued the idea. The consequence: bankruptcy in 2012 and a business relaunch in a significantly reduced setting in 2013.
- Blockbuster was approached by Netflix in 2000 to partner with them in order to advertise Netflix in their stores – another opportunity arose in 2008, when Blockbuster could have acquired Netflix, but didn’t take the opportunity. The consequence: bankruptcy then in 2010.
- BlackBerry (RIM) delivered an all-time-high business output in 2007 – the year of the iPhone launch. When the then CEO, Lazaridis debated with his Co-CEO Balsillie about the matter of having a touch-screen and displaying a full web-browser on a phone, the Co-CEO said full of complacency “We’ll be fine” – the consequence: BlackBerry left the HW business in 2017 and is still a restructuring case.
Our conviction: this can happen to any incumbent, who is not prepared to continuously question the status quo and pursue a clear vision of future technology use. In the best case, such a company remains below its market potential; in the worst case it disappears from the landscape. Those who suffer are often employees, who cannot react quickly enough. The velocity with which startups are raising to their maximum potential is even nurtured by the valuation fantasy on capital markets, pushing startups up to 1bn valuations and thus "producing" a unicorn. When looking at what of those startups are doing differently, a commonality can be observed: they usually respond to an unmet need by indisputably putting the customer into the center of their gravity.
The separation of B2C and B2B is blurring with the effect, that buying behavior for investment goods is changing. Ownership, to access in service models, is increasingly becoming the slogan in the B2B sector as well. A brief definition of service provision sheds some light on this pattern of demand: it consists in providing access to a product / component to be used to a certain level of quality and during a specific period of time with predictable payment terms. Outcome and performance are then the valuable deliverables. Emotionally loaded, these services can already be observed in the B2C sector, where consumer goods are being provided as experience use cases – to respond to a shifted expectation, which is equally takes into account ESG, health & safety and other very much human needs - AND their demand for these goods is increasing.
Demand for experience use cases in increasing and new engagement patterns are arising
Information that is permanently available ensures customer remain well-informed and can adapt their requirements accordingly. It is also no longer just about owning things, but about using them during a desired time span and at transparent prices to a defined level of quality. We are not only observing the whole thing in B2C, but also increasingly in the B2B sector. The digital footprint left behind then is what is being used to improve the customer experience with every new use case. This digital footprint is nothing less then valuable data, which however, needs to be exploited in a way that allows new services to be created that exactly match the customer needs. Consequently applied, data is then the scaling factor to achieve what is then called 'flywheel growth' (description of flywheel growth).
Prominent examples can be found that have been motivated by the need for optimal operational maintenance or by being circular by design. Some examples include Philipps with their “light-as-a-service” model, or the “Re-buy” / “Flip4new” and other Redistribution platforms for high tech consumer products.
We’ve prepared other insights and user experience examples to meet changing engagement patterns. Feel free to book a session with us to learn more.