Everyone is wondering (and few are worrying!) about digital disruption taking place across industries. This is bringing the most impact on business. It is actually the change brought forth by new digital technologies along with strong business models, which threaten the value proposition of the existing incumbents. Innovation and disruption are constant in this dynamic world. Any business which is successful today, would have been a disruptor during their early stage. However, in future, same successful business may get disrupted, if they failed to study: Who are all their potential competitors? What are they doing to disrupt their business model, and how can they stay ahead of them?
Digital disruption has already making noise in banking sector, retail industry, media platform (face book, twitter), travel and other industries, and technologies like Big data, Predictive analytics, NLP, IoT and Blockchain are becoming big threat to the traditional systems in relevant industry. These disrupting technologies are transforming marketing agency to digital marketing agency, retail to e-retail, physical wallet to digital wallet, currency to crypto currency and so on.
Reason for the rise of Disruptors
"Digital technologies encourage newbies and existing players to try out disruptive business model"
Technologies reduce the capital investment, and even if the model fails, the loss is minimal. For Instance, Alibaba - a successful ecommerce platform has started its retail sales operation by neither having a physical shop nor owning any inventory. It just facilitates the exchange of goods for money and fortunately became a successful model. Similarly, Uber app, offering taxi service in 200 cities across 55 countries has neither appointed a taxi driver nor owns any fleet. These companies don’t put in huge investments, rather, they are backed with sound technology and make profit out of it.
"Attitude towards business"
Lack of Money doesn’t matter but lack of Idea matters. Even if a business requires huge investment, investors are ready to support them if their idea is excellent. For example, grocery and veggie e-retailer Bigbasket, grabbed $33 million from Helion Ventures, Ascent Capital, Zodius Capital and Lionrock Capital in September 2014.
"Rapidly evolving consumer ecosystem and consumerization of technologies"
Digital disruption can change the way of doing business or improvise product offering but can never disrupt customer needs. A messenger app "Whats-app" has disrupted the Short Message Service provided by telecom companies, not consumer’s needs for easy and effective communication. An e-commerce (Amazon) and video rental (Netflix) player have disrupted the entertainment industry by innovative offering of content to viewers and monetizing from advertisements.
Enabler for Digital Disruption…
Effective ways to stay safe from digital disruption are:
1. Stay aligned with your customer and understand changing needs of your customers
2. Gain insight about your market and competitor moves
3. Understand your customer’s needs and wants, along with their preferences, and make it available to them. Grocery can be a need for customer, but just providing it, will not work. Incorporate customer’s wishes (may be mobile site, DIY workshops in physical shop etc.) while shopping and make shopping as a special experience
4. Gain and sustain competitive advantage to stay successful in Market
5. If you have never tried digital platform, it’s time to Go Digital!
Every business leader should always expect disruption in terms of rivalry, new entrants and markets. Living in a digital era and worrying about digital disruption seems ridiculous, rather, strengthen the immune system of your business. Do your research, find out facts from reputable sources, and plan for the future. Digital disruption requires rethinking the entire business, not just one’s technology portfolio. It is a need of the hour for business leaders to think proactively on how to face Digital disruption, because you might not get a chance to react!