Why digital-first business models are the future of retail
Ahead of her Adexus Day 2019 presentation, head of trends Cate Trotter shares why digital-first business models are the future:
Are you the caterpillar of the business world?
Or have you transformed yourself into a butterfly?
The answer to that question depends on how you’re embracing technology. There’s no doubt that this is the single biggest thing impacting businesses today and it’s not going anywhere.
There are two main approaches to incorporating technology into your business – the short-term approach and the long-term one. Both have very different effects.
The first is taking a traditional business and applying technology to it to make what it does cheaper or faster. The second is a far more transformative process that creates a new digital-first business model.
It’s the difference between being a caterpillar who upgrades itself with some fancy new shoes or roller skates, and the caterpillar who completely breaks itself down and rebuilds itself as a butterfly.
We can already see this in action.
Back in the early 90s if you wanted to buy a book you went to a bookshop. Then the internet happened and with it came Amazon – once pitched as Earth’s biggest bookstore in case you’d forgotten. The book buying process had become digital, but otherwise followed much the same pattern of sale and consumption.
But now a digital-first approach is changing the entire model. Readers are taking the characters and worlds that they love and reworking them in their own online fan fictions. In the process, they get feedback from other fans and learn what they want to read. It was from here that we ended up with the phenomenon Fifty Shades of Gray. Technology is enabling readers to be part of the process of shaping their favourite stories, which can then be published to a wider audience with the knowledge that they’re what readers want.
Likewise, deciding whether to try a new restaurant was once a case of reading a review in the paper. Then technology came along and brought with it Yelp, TripAdvisor and a myriad of other review sites where you could read the opinions of others. It was the same process – just digitised and on a wider scale.
Today companies like Deliveroo have used technology to create a brand new digital-first ecosystem. Having seen an opportunity to bring the food they love directly to customers, Deliveroo is now becoming an insights and analysis company. It is selling what it knows about what customers want and their buying habits to restaurants to help them improve.
What’s more Deliveroo is now even helping brands open up dark kitchens where they can prepare food to keep up with demand. It’s a complete shift away from the traditional food prep and sale location that customers can also visit.
As you can see, businesses that put digital first have not only transformed their business models, but also their fortunes.
There are three common changes that can be seen across these new models:
- Moving from passive to active interactions with customers
- Moving from selling product and services to relationships
- Moving from selling from one or two sites to interacting with customers anywhere
All of them are taking the linear product and consumption process and turning it into a more cyclical, engaged process between brand and consumer. These deeper and more involved relationships are the new USP of business. They’re also how you sell more – and what business doesn’t want that?
Are you brave enough to break your business down and rebuild it into a new digital-first model? Are you a butterfly of the business world?
For more insight on these changes and inspiration on what direction your business should take, don’t miss Cate’s full presentation on digital-first businesses at Adexus Day 2019 on August 22nd. Get more info here.