Disruptive Innovation in Retail Markets

by David Sealey on April 1, 2013 in Business with No comments
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There is a theory established by Clayton Christiansen that demonstrates how disruptive innovations not only enter markets but how they can topple or seriously wound incumbent businesses. Disrupters achieve this by creating new markets or by creating new low cost options targeted at consumer’s with low requirements.

Disruptive Innovation Framework

Christensen’ model of Disruptive Innovation taken from Seeing What’s Next (Click for full size version)

Importantly this affects UK retailers. Consider HMV who have been toppled by disruptive innovations from Netflix, Spotify and iTunes. Established retailers need to understand a) how to identify disruptive innovations before they hit top line sales and b) how to innovate before the competition.

My MBA dissertation will apply Christiansen’s work to UK retailers in the post-digital era. Firstly I will prove the model and identify how disruptive innovations have affected the market. Secondly I will attempt to identify through research what areas of disruptive innovation are opening up for retailers.

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Reading list:

SXSW Day Four: Would I go again?

by David Sealey on March 12, 2013 in Digital Marketing with No comments

SXSW is difficult to summarise. It is equally brilliant and frustrating. On the one hand you can learn about cloud architecture from Amazon’s CTO or open web standards from Tim Berners-Lee. On the other, you can queue with 300 people to stroke grumpy cat (seriously this happened).

What made the event for me was the content and the people. Everyone was so open for networking and it was great to spend time chatting with digital experts from Forrester, Lego, the US Air Force and Walmart. It was also great to make friends and socialise with those from start ups like the amazing Kashoo who provide cloud based accounting software.

There are a whole host of cool tech companies I now need to pick up discussions with, but for now their names are between me and Capgemini.

Same time next year guys?

SXSW Day Three: Intent and Affinity

by David Sealey on March 11, 2013 in Digital Marketing with No comments

Nate Elliott of Forrester gave an engaging presentation today on the differences between user intent and affinity. Marketers can start to tap into this data of intent and affinity as it becomes available from Google and Facebook. However the key point was made that these sites don’t hold all the data yet.

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Nate explains the concept better himself at his blog.

Google’s Art, Copy & Code project was also fascinating today. You can see their future of advertising talks at http://www.artcopycode.com/.

SXSW Day Two: Sir Tim Berners-Lee

by David Sealey on March 10, 2013 in Digital Marketing with No comments

It was an absolute pleasure to hear from Sir Tim Berners-Lee today. His passion for the web and depth of knowledge were staggering. In the introduction the point was made that he could have privatised the web for personal gain when he created it. He didn’t. He gave it to the world for free and I certainly owe him my career for that.

His challenge to the audience was to build platforms that can extend far beyond what we expect them to be. This was true of IP and TCP. It was also true of HTTP and the modern Web. TBL built a platform that others have used for good (and some bad). Platforms can be knowledge or ideas as well as technology.

For all the good content being absorbed at SXSW, the question remains what platform will you create for others to use?

SXSW Day One: Gamification, Enterprise Mobility and Nice People

by David Sealey on March 9, 2013 in Digital Marketing with No comments

SXSW started today and as a first timer I found the day somewhat frustrating and confusing. Everything was too busy. I couldn’t get into presentations and the weather was abysmal. That all turned around when the afternoon started. I managed to get into some amazing sessions and went for a meal with some great people I’d only just met.

Here’s a run down of today’s highlights:

Apps for the Enterprise

The enterprise is becoming consumerised. BYOD is creating a need for organisations to provide secure enterprise ready apps for smart phones and tablets that employees can use to improve their performance. Ultimately this could improve the top line but on the whole serves primarily to improve the bottom line profitability through efficiency gains.

The view of the panelists was very much that if big businesses don’t provide the apps, employees and the private sector will circumvent policy and find a way round it.

Stat of the session: The average Fortune 500 employee has 3.5 devices.

Gamification and Big Data

A very sensible discussion on Gamification and Big Data. Whilst the title was very buzz word oriented, the content was superb. Key points:

  • Gamification should improve lifetime value. Lifetime by constantly engaging the customer. Value through the reinforcement of desired behaviours
  • A strong value proposition should be at the core of Gamification. What do user/customers want?
  • Identifying situations where Gamification shouldn’t or couldn’t be used is impossible. Military ranks and medals are the earliest example of applied Gamification

Shout outs

It’s been awesome to meet and spend time talking tech, marketing and business with some great people:

  • The team from Kashoo
  • M2O’s CEO Bradley
  • CEO of Tracx Eran
  • Walmart Canada’s Social Media Manager

Why the single biggest threat to content marketing is content marketing [presentation]

by David Sealey on March 4, 2013 in Digital Marketing with No comments

As marketers latch on to the concept that content is king, we will see an increasing deluge of poorly researched and written content. Content’s popularity will be its downfall.

I attended a London based technology and marketing trade show last week and listened to a number of keynotes over the course of the two days. What struck me was the level of ambiguity and poor research presented in an attempt to get marketers to buy the latest CRM, email marketing solution or CMS. Content was there. Quality of information was not.

The Slideshare presentation below made me smile and was a great reminder to be a Great Content Brand:

Further reading

Lessons in unbundling the IT function

by David Sealey on February 27, 2013 in Business with 1 Comment
bezier-wakefield

Businesses can achieve great success by transforming successful cost centres into profitable business operations.

Having spent two great years at the retail marketing solutions business Bezier, I was gutted to hear that the administrators had been called in. Rather than dwell on how or why it all went wrong, I reflected on the lessons I learned as part of the growing IT team at Bezier.

Unbundling IT and transforming it from a cost centre to a profitable operation

When I joined Bezier, technology was a value add. It was seen as a sweetner to not only win new business but to lock it in to our processes and systems. Our work in the IT development team was paid for from the margins of the print work. In my humble opinion, we were good at we did and I was fortunate to work with some talented and hardworking people.

The Group Technical Director had a greater vision for the IT function and developed a print technology proposition that we would execute over the next two years. We were branded as b3 and a suite of tools was designed (although at the time most of it was vapourware or heavily customised for a specific customer). This proposition allowed us to approach existing smaller accounts and to begin selling IT solutions on top of the print work. Leveraging existing relationships was a quick way to get to market and enabled us to continue investing in the team.

The next stage came as we can pitching for work where technology was the primary purchase and printing was a bolt-on. A major international hotel group liked what we could offer and following a robust tender process selected b3 (or Bezier) to develop an international print personalisation and ordering system.

Amazon Web Services are another excellent example of unbundling. Amazon ran servers (lots of servers) and used their expertise to develop the Amazon Web Services offering which is now one of the most popular scalable computing models in the market.

Unbundling; how to do it

  1. Analyse the business function and identify what services from it other businesses could consume
  2. Develop a go to market proposition that the market will understand
  3. Leverage existing client and supplier relationships to begin selling in your expertise
  4. With the support of your existing sales and account teams, begin approaching new potential clients and start tendering for work

There’s a lot I’d do differently now but the core model works.

Further reading

The book Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers contains sections on unbundling business models and contains exercises that will help solidify the process.

Lego: The building blocks of next generation high street retail

by David Sealey on January 25, 2013 in Multichannel with No comments
legostore

Lego can only win in the new multichannel world. They have a great core product that remains as popular with kids and big kids as it did 10 years ago.

To support this great brand, they’ve started opening retail stores and it was my pleasure to spend some time recently in their Sheffield store. I went in with my daughter and we looked around, she played with a tub of bricks that was free for people to build things with. The experience became amazing though when one of the staff approached us and offered my daughter a small lego set. “Would you like to build this with me?” he asked. For 10 minutes or so David helped her build a small igloo set and then packed it up in a bag to take home.

It was an experience we enjoyed and now my daughter wants a Lego set for her birthday.

Lego will continue to win in the retail space for the following reasons:

  1. They have engaged staff who love the product and who are empowered to create retail experiences through free mini Lego sets
  2. They are insusceptible to showrooming: Regardless of where I buy a Lego set, Lego will make a margin
  3. They have great core products that have been loved by generations
  4. They continue to innovate their product offering

Apple did it successfully and now Lego have. The question is whether the transformation of the high street will continue towards manufacturer-brand showrooms as opposed to buyer-retailer stores.

Further reading:

Sad but predictable: The demise of HMV

by David Sealey on January 15, 2013 in Marketing, Multichannel with No comments
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Tight aisles. Stacks of DVDs and CDs. Permanent discounts. When I think of HMV, this is what comes to mind. It is a retail experience I dread as an adult. As a teenage I loved it though, we would go in between lectures and browse the newly released singles that we’d heard on Radio 1.

Sadly the world moved on. Supermarkets begain stocking the latest releases and were able to undercut on price. iPods and iTunes made ot easier to access and purchase music track by track. Spotify (Music as a Service) provided free access to nearly every track ever recorded. Just as the traditional music store was on the ropes, the death blow came with Video as a Service (Lovefilm, Netflix, iTunes and so on).

HMV and music stores in general became irrelevant.

Whilst more could have been done with multichannel or digital. The essential and missing part of the marketing mix was relevance. Why would a customer buy from HMV? Would you make them look cool like Apple? Would you make it super easy to buy like Amazon? Would you make it cheaper than anywhere else like a pound store? Would you make it experiential like Disney? Or would you offer an exclusive product that could not be obtained anywhere else?

Unfortunately for HMV they can’t compete on price effectively against the global buying power of Apple or Amazon. Also HMV’s cost base of big stores in prime retail space wouldn’t compete against purely online retailers. Transacting in a retail environment is never going to be as simple as an online transaction where the product is shipped digitally directly into my phone’s music or video library.

This leaves two routes, exclusive products and experience. Perhaps HMV should have got behind indie music in the UK – becoming a record label. A CD Baby of the high street. Experiences could have been created by bringing live music into store. Alternatively experiences could have been created by helping customers find new music with in-store experts, DJs and a social network.

Consider it my opinion, but for retailers to survive they need to understand why they’re relevant and then innovate to get there. It’s risky but not as risky as doing nothing.

dilbert-skewers-microsoft

Further reading

Photo Credit: Beverly & Pack via Compfight cc

2013 and beyond – two academic frameworks for seeing what’s next in Digital Marketing

by David Sealey on December 31, 2012 in Digital Marketing, Web Technology with No comments
delorean

As we bid farewell to 2012 and all the amazing things that happened, we also welcome in a new year and wonder what it will hold.

“Take time to deliberate; but when the time for action arrives, stop thinking and go in”
- Napoleon Bonaparte

Whilst reading and gathering articles, tweets and posts from thought leaders may appear like a worthwhile activity, I’ve become cynical about the value it really provide. Not all advice will be applicable to your unique personal or business situation, some of it may be valuable. In fact a large portion may be downright dangerous to your success.

“The only thing to do with good advice is to pass it on. It is never of any use to oneself”
- Oscar Wilde

Consider this a teach a man to fish post summarising two academic articles on foresight (i.e. the precognition of future trends and events). Rather than telling you what I think is going to occur with marketing and technology in 2013, let me share some academic articles on how to visualise what will happen next.

“May you have the hindsight to know where you’ve been, The foresight to know where you are going, And the insight to know when you have gone too far”

Pocket Primer of Comparative and Combined Foresight Methods

Science and technology foresight baker’s dozen: a pocket primer of comparative and combined foresight methods by Jack Smith and Ozcan Saritas was written to provide a set of foresight methods that can be used in practice. Smith and Saritas also provide guidance on how to choose the right tool for certain situations. The framework of methods is as follows:

foresight-model

The five stage process takes the consultant/user from the point of having lots of information through to prioritisation and action. There are some key points to consider:

  1. Good foresight requires a wide range of perspectives. Therefore consider what sources you get insight from; ask what the cleaner thinks of your business, read something random (like this), bring in one of your customers (especially if they’re unhappy)
  2. “Good foresight is fundamentally collaborative”. Smith and Saritas champion the use of the Delphi method for prioritisation allowing your group of stakeholders to determine what to deal with first.
  3. “Foresight is more about conversations and rich stories about varied dimensions of life experience than just analytics or data – after all there is no real data on the future, just projections, assumptions and implications from present data”

Due to copyright I can’t share the PDF of the article here but it’s well worth the price if you plan of using it: http://www.emeraldinsight.com/journals.htm?articleid=1917014&show=abstract

You can read more about this (for free) or Ozcan Saritas’ website at http://www.systemicforesight.com/sfm.htm

Entrepreneurial Foresight

The second paper is The art of entrepreneurial foresight by Emilio Fontela, Joaquín Guzmán, Marybel Pérez, and Francisco Javier Santos.

If you’ve ever said “I wish I’d thought of that” then this provides an insight on the “boosters” that entrepreneurs possess and links them with the creative processes required to have anticipate what will be next.

An entrepreneur is made up of three spheres; the managerial, the financial and then the important “booster”. The identified “boosters” that are necessary to facilitate entrepreneurial drive are:

  • Motivation;
  • Ambition;
  • Innovation;
  • Cooperation; and
  • Proactiveness.

Creative, insight and forecasting endeavours sit hand-in-hand with the spheres as a major factor of entrepreneurial success. Importantly the authors note that whilst these attributes may appear unobtainable (“I cannot draw therefore I am not creative”), they can be achieved:

“We tend to regard creativity as something brought about by chance, or as the by-product of an ego-seeking temperament, or as a mysterious magic gift which some people have and others do not. Creativity is all these things, but only because we have made no attempt to introduce discontinuity into our thinking in any other way.”

This is an important element to add to Smith and Saritas work and a reminder that those who can see the future have a foot in the arts (think Leonardo DaVinvi, Arthur C Clarke or Steve Jobs).

Once again I can’t share the PDF of the article but it can be obtained from http://www.emeraldinsight.com/journals.htm?articleid=1579321&show=abstract

Conclusion

Foresight is a function of Creativity and Process. Too creative and you design something that nobody needs or wants. This is the realm of wacky professors and failed – yet hilarious – Dragons Den pitches.

Too much process and you’re a Microsoft or General Motors; unable to innovate and disrupt.

The skill is in the blending of the disciplines, not in mastering either one.

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“Innovation is not the product of logical thought, although the result is tied to logical structure.”
- Albert Einstein

Further reading:

Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers
59 Seconds: Think a little, change a lot
Gamestorming: A Playbook for Innovators, Rulebreakers, and Changemakers
The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators

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