- 1129 workers die in a clothing factory collapse in Bangladesh
- A 25 year old student uses a 3d home printer to create and successfully fire a gun
- Staples starts selling 3d printers
- US government debates a proposal to tax all internet sales
- Tesla Model S gets near-perfect score from Consumer Reports
- A whistleblower leaks existence of a US government electronic surveillance program
- Value of a bitcoin jumps 10 fold from Jan-Apr 2013
You have likely seen most of these recent headlines. While seemingly unrelated on the surface, I think there are some common themes here that retailers should pay attention to. The five observations below are not new, but they are worth rehashing as the implications of forgetting could be consequential.
- Regulations Will Save You (NOT) – Ethical and moral compass as well as business sense need to guide decision making. It took US government two decades to seriously consider legislation to level the playing field for online commerce. US lawmakers cannot agree upon what checks, if any, are required before someone can purchase a firearm – but technology has moved on where people can “print” their guns at home. It took a couple of tragedies for Bangladeshi government to consider laws safeguarding worker safety and rights. Retailers who were sucked into Bangladesh in their quest for speed and cheap labor turned a blind eye to the risk and are now rushing to protect their image by committing to safety audits and improvements. Done proactively, countless lives and brand reputations could have been saved.
- A Disruption around every corner – Disruptive innovations – such as Tesla Model S – are often discounted as niche or fad by incumbents but suddenly they surprise everyone by not just being good enough but by being better and going main stream. Is bitcoin the next ‘tulip mania’ or will your customers be soon asking if you will accept bitcoins as payment? Would you be comfortable accepting it – as some businesses already are – without any legal or financial authorities backing the financial instrument? Will democratization of manufacturing via 3d-printing remain a niche market or are parts of your business at risk?
- Can You Find the Opportunity?– Charging stations for electric cars may just be the way to get that consumer to spend a couple of hours in your store. Sometime in the not so distant future, is there an opportunity for your business model to evolve so that you are shipping your products as bits instead of as atoms? Could you be selling design and prototypes for 3-d printing instead of finished goods? For example, could you be selling infinitely customizable “digital” Barbies which consumers can “print” at their home, without incurring the costs of stocking all the customizations? Wouldn’t it be great if you do not have to stock replacement parts for older products and just let customers “print” them as and when they need it?
- Pace of technology innovation is accelerating – Given today’s pace of innovation it seems amazing to me that 20 years after the launch of Amazon, eCommerce is not much larger than what it is today. That it took this long to get on the top of business and legislative agendas. But don’t count on next wave of technology disruption to take decades. I am certain retailers do not have 20 years to figure out what do they want to do with mobile or social or with data that is deluging their operations. If not dealt with utmost priority and urgency, these and many other forces will overwhelm and threaten your business.
- Privacy is a thing of the past – What surprised me about the “leak” of NSA surveillance program was not that “Big Brother” was doing “Big Data” but that there was so little real uproar once people found out about it. Sure there are news reports, talk shows, newspaper stories expressing shock – but to me it seemed that most common folks tended to accept it as sign of the times. Consumer expectation of privacy of information is decreasing and they are increasingly willing to trade information and privacy for a benefit. Retailers with capabilities to analyze and benefit from this data deluge will have a huge advantage.
The accelerating pace of change, fueled by technology, is impacting retail at unprecedented speed and in unanticipated ways. To keep up and to take advantage of arising opportunities, retailers need to increase their own pace of technology investments. Historically retail has lagged other industries in technology investments, let alone consider cutting-edge software. While that is starting to change, the current pace is not likely to be enough. The next Amazon will not take 20 years before it will eat your lunch!