Close your eyes.
Let’s take a trip back in time.
The year is 2008. Nokia dominates the phone market. Movies come from Blockbuster, Video Ezy or United Video. If you want to pop down the road, you fork out a small fortune and pay a taxi. Amazon is for buying physical books, and holiday accommodation is a choice between the Four Seasons or the Ritz-Carlton.
Now, tune back in to the present day. How much of this has changed?
Nokia is non-existent, bought out by a tech firm (Microsoft), with its market share taken by another (Apple). The go-to for anything movie related is Netflix—renting a DVD from Blockbuster isn’t even an option. You shoot down the road in a cheap, convenient Uber, but only when you decide not to do your entire week’s shopping online on Amazon. Instead of choosing between hotel chains for your upcoming holiday, you can now scroll through thousands of stranger’s houses on AirBnB, and select the one right for you.
Spoiler alert: It’s going to happen to you too!
What’s happened over the last ten years is called disruption, and it’s set to put four of the top ten organisations in every industry out of business.
What this means is no one’s safe—disruption is coming, and it’s unavoidable. What is avoidable however, is being one of the four organisations getting displaced.
We can see disruption occurring in the retail space already. Amazon is steadily entering retail markets around the globe, entirely changing industries with each step. You can now shop for all of your needs online in one go, with the assistance of an AI bot, and then have everything delivered to your doorstep within 24 hours. Other online behemoths such as Aliexpress are continuing to undercut local retailers on price and provide free shipping, making it harder and harder to compete locally. All of this has increased convenience, along with a significant decrease in cost.
Adding to this, we see the role of technology altering the way that consumers interact with brick and mortar stores. Chances are, before purchasing one of your products, a customer will have done a quick Google search to compare prices. Along the way, they will be presented with several quick, easy alternative products through Google Shopping, as well as a bunch of online reviews of your product and store.
Competition on price and convenience is tougher than it’s ever been in the retail space. If you don’t adapt your business now, you risk finding yourself on the wrong side of disruption.
What you’ve done in the past, won’t work in the future
This is the age of entrepreneurship. It’s unavoidable that new technology and crazy innovations are going to continue entering and disrupting the retail industry. The only way your business will survive is if you continue to deliver value on the other side of this disruption.
Assuming disruption continues down the current line, generating greater convenience and cost-savings to consumers, your current point of difference absolutely cannot be the fact that your business is cheap and just around the corner. Rely on this as you may have in the past, and your business is doomed. Going toe-to-toe with the likes of Amazon over price and convenience is only going to end one way.
This all may sound very doom and gloom, and if disruption brings up images of a gloomy post-apocalyptic world, never fear. As with any good zombie movie, there’s always a group of good guys doing something differently to save the human race!
What are the survivors doing?
When it comes to disruption in the retail industry, those who are surviving and winning are the ones focusing on customer experience.
If your point of difference is customer experience, rather than purely cost or convenience, you’ll be well placed to survive any disruption. Focus on creating something truly special—a genuine feeling of enjoyment—that your customers can only access through your business. Create this, and it doesn’t matter if other companies come in and do things faster, easier, cheaper. Your customers will be your customers because they like the unique experience you deliver, and they’ll continue to come to you for that and that alone.
To achieve this, we need to be connecting with our customers now more than ever. We need to be asking them what they like and don’t like about our current experience, and working to enhance that even more. With our customers at the centre, we need to have an open, agile mindset towards the future, and continually adapt to survive.
