Disruption, Painpoints and Innovation: Why “Don’t make me think” is the key to reducing Risk
You’ve probably read that Amazon is coming to Australia next year. Amazon now represents 50% of e-commerce sales in the US. What may not be so obvious to us is the how ecommerce has wreaked havoc on American retail. The pace of change has accelerated in the last 12 months, and the “transformation is hollowing out suburban shopping malls, bankrupting longtime brands and leading to staggering job losses.”
Where the US leads, we are likely to follow. This should concern you, whether you are in retail or not. The travails of Sky TV are well known: whatever the outcome of the merger with Vodafone, Millennials are leading the charge away from Sky to Netflix and similar streaming options. The painpoint is not just the price. It is the fact that you have to watch a show when the TV company says you should. In fact, wherever there is a digital alternative to the analogue player, expect disruption.
And there will be digital alternatives to most things, which is why you need to be thinking about what is going to disrupt your business.
People often say to me, “But, Hamish, our industry is different. Our customers will always want the kind of service we provide.” That is confusing the outcome with how it is delivered. Take legal services. Forward thinking law firms are recognising that the painpoint is charging by the hour. Why, say clients, can’t I pay a fixed price for a fixed outcome. And these law firms are looking at reducing cost by outsourcing parts of the job – like research – to places like India, improving outcomes by re-using their existing knowledge more effectively, and creating more certainty by collecting data about past performance so they can offer fixed pricing.
To us at Digile, innovation is addressing customer needs in a fundamentally different way. Innovation without understanding customer need is pointless. Consumers and businesses are increasingly looking for easier, simpler and cheaper ways of doing things – Uber instead of taxis, AirBNB instead of hotels – but the need to travel from A to B, or sleep in accommodation hasn’t changed.
So, when you look at your business’s sustainability, it makes sense to view it through your customer’s eyes and hear them as they say: “Don’t make me think”. By understanding the customer need and meeting it in the lowest friction way, you can reduce risk in your business.
By the way, we still have spaces on our Innovation Workshop, where in one day, you can work through all of these issues and leave with an action plan for your business….