Lately, I have been “heads down” more than ever working with companies on redefining their strategies. In these conversations, I am often asked what surprises me the most. Here are a few observations.
The biggest surprise to me has been the pace at which whole industries have begun to disappear. As fast as one charts the list, another one needs to be added. The postal service, newspaper and magazine publishing, television, and retail stores are just a few.
Last week, I went into a high end department store to buy a present for a newly engaged couple. I went to the registry and met with the manager. She told me that 80% of the gifts for a couple is now purchased on line. This is good news for the retailer because it can pay less commission, as there is no sales rep involved in the purchasing transaction.
What was shocking to me was that manager told me that when an item is returned to the store, it gets applied as a negative sale to her commission. She is running harder just to stay in place. And the store is comfortable making her role obsolete.
Another recent trend that I find fascinating is the increasing need to create engines as opposed to creating businesses. Zappos is a great illustration of this process done well.
Zappos had become an Internet business legend, so to speak, for its ability to sell footwear. Its use of social media to promote and service its business is very well known.
In July, Amazon announced its intention to purchase Zappos. The deal closed in November.
Today, less than two months later, Zappos has transformed itself into a clothing site. The engine that it has designed and the practices that it has implemented are being used to allow it to enter a whole other segment of the clothing industry.
What does all this mean to you?
For starters, if you have been doing business in a traditional way, start rethinking your business model because your next competitor can come from anywhere.
Strategy Insight 