Breaking the mould is imperative if companies want to survive and grow in today’s challenging market conditions. Chris Dedicoat, President, EMEAR believes that the ‘Internet of Everything’ offers just that opportunity.
E ven the most cursory look around the business world highlights the importance of innovation for staying one step ahead of the market. The economic crisis is now in its sixth year, forcing businesses of all shapes and sizes to question whether they are doing enough to innovate their way out of this stalemate situation. Once invincible brands are falling because they have failed to accept the need to adapt – or to do this early enough and to the degree required. Any organization that has previously questioned the sense in prioritizing innovation in the current climate must now review their strategy to ensure they are not similarly vulnerable. Recession masks more serious problems.
In February 2013, the Centre for Retail Research published a long list of retailers that have fallen by the wayside between 2010 and 2013. The undoing of these companies is down to much more than simply what has been happening in the economy. Most of these organizations had very strong and long-standing brands, and associated online businesses. Most commonly the issue had been a failure to move fast enough into the digital sphere and to develop a sophisticated, competitive e-commerce proposition. Most had neglected to fundamentally rethink their core business models and question whether the business as it stood was still relevant to today’s consumers. Retailers that do not already have a solid digital strategy are now playing catch-up and the consequences are widely evident. Those seeking to make up for lost time are now trading investments in real estate for strategic spending on advanced technology that will help them leapfrog their rivals.
Staying connected, in all senses of the term, is the only practical way to stay relevant. Remaining in tune with the market and with customers keeps a business aligned with changing trends and transitions in customer preferences and habits. Maintaining flexible connections to technology, meanwhile, and having the facility to switch new capabilities on quickly as needed, gives companies their best chance of keeping pace with the competition.
Nespresso knows everything about its customers through its ‘membership club’. This enables it to keep a record of individual customer purchasing habits, information which it can use to provide service personalization. Its website, boutiques and customer relationship centers blend together creating a bridge linking consumers with the company.
As profound changes are taking place in the retail sector, the world-famous department store chain John Lewis upped the pace of innovation and investment last year. This was at the price of some short-term profit but left the company in a good place leading up to the Christmas period.
Its click-and-collect service, which blends its online and offline channels, drove a 44.3% increase in revenues with overall online sales totalling £684.8 million after the 2012 festive season.
What the Internet of Everything teaches most of all is that business value creation has shifted towards the power of connections and, more specifically, to the ability to create intelligence from those connections. Companies can no longer rely solely on internal core competencies and the knowledge of their employees for their competitive edge and ability to react to a changing market. Rather, they now need to be able to capture intelligence faster from a whole plethora of external sources. A lot is demanded of companies today. Not only must they push through economic inertia to keep the business fresh and braced for new growth, they must also develop responsibly, mindful of their impact on the environment and their need to contribute something positive to society. The consumers of tomorrow, if not today, have grown up with the internet and can’t remember a time without it. They assume digitization and personalization as a starting point when dealing with companies. When an organization steps back and sees itself through its future customers’ eyes, can it honestly say it will be the company they will choose to do business with in five or 10 years’ time? If not, it’s probably time for a serious rethink.