We find ourselves at the beginning of a digital revolution: technology has turned the world upside down, new products have emerged and the old way of doing business just doesn’t work anymore. The biggest changes are still ahead with the foreseeable future development of big data, connected cars, connected homes, e-health and so on. Sure, it is a bit frightening; we don’t know what to expect and we seem to be overtaken by the speed of innovation. But it also opens the door to a whole new world of exciting possibilities!
Instead of standing back, it is time to take actions and to adjust to the new environment. Now is the time to “adapt or die”, and in the struggle for life the ones to survive will be those who recognize early on that they have to change their strategies, processes and product portfolios. The key is to take creative risks; they can turn out to be a huge success.
From analogue to digital
Technological progress has introduced digital substitutes for a range of classic products and services that have therefore become obsolete. It is important for companies to realize early on that some of their products are no longer profitable in order to resurrect themselves in more lucrative products. We have noticed, however, a high early adoption potential for products and services offered online. What’s more, customers even seem willing to use their smartphones and tablets for services that are not even available online yet.
Everybody is concerned
Technology Media and Telecommunication is, of course, the first industry that needs to take notice of the changes ahead, but ultimately every single company is involved. The boundaries between industries are blurred, which means that new rivals are to be expected that would not have been a threat in the past. Conversely of course, it also opens doors for companies to expand in other sectors themselves. Furthermore, the old value chains are broken; producers can be closer to their customers thanks to technology solutions and innovative R&D teams can develop new ideas that reduce the amount of manufacturing required. The overlapping of industries also reveals new opportunities in terms of multi-sector partnerships.
As we said, new rivals need to be identified, as well as possibilities for expansion. It is important, however, to be aware that an inaccurate assessment of the competition might turn out to be very dangerous for the sustainability of companies. If they try to fight the wrong rivals or to tackle the wrong opportunities, they will lose valuable resources; if they don’t identify future rivals and opportunities, they will use misguided strategies.
The same goes for identifying what the customer wants. A poor analysis of the customer can be costly. But correctly identifying the success factors of an advertising strategy or a new product launch, for example, can give a competitive advantage. Because ultimately, it’s the customer who makes a business successful and sustainable, we have identified the key trends in terms of customer behavior.
First of all, and this is especially true for the younger generation, the customer is always connected, always online, where he or she has access to an incredible amount of knowledge. This decreases his need for vendor advice since he can easily find more objective information about the product that he wants to buy, the opinion of other customers, the different prices available and so on, on the Internet. If this means that a brand cannot count on building customer loyalty and market strength as much as before, it also opens new opportunities in terms of communication and advertising. Offering an online catalogue is a start, but it’s not enough: innovative strategies need to be found that take advantage of the constant use of tablets and smartphones by customers.
Secondly, and this might be the trend with the highest potential to radically change the relationship between companies and their customers, there is a growing interest for tailor-made products. Customers are more and more eager to have an impact on the end-product and customize it, making it a unique prototype. As a consequence the entire added value chain may be turned upside down: while before, production came first and marketing second, in the future production may only come after marketing, configuration and ordering. We are witnessing the increasing importance of mass customization, which was until now reserved to specific industries only, such as the automobile industry. Technology makes it possible to switch to a “make to order” process where details can be tailor-made once the client has ordered a product, and the end-product can still be delivered in time. Companies need to change their business model from offering a standardized product that already exists to offering a personalized solution to a problem that the customer has. Only then will they be able to think differently about the strategies to use in order to survive the digital revolution and to capitalize on the changes ahead.
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