Let’s face it, we have all been picturing a sky full of drones automatically delivering everything from books to groceries. Recently I heard that the load-carrying ability of drones doubles every 8 months! Soon, they will be programmed to work together through an app.
For the past few years we have seen major shifts in the evolution of the bricks-and-mortar and clicks-and-mortar models. The two giants of retail, Amazon and Wal-Mart, are playing key roles in influencing how business is done. Importantly, they are reshaping the world of every other business and industry with direct and indirect connections to them.
A recent article in the Economist magazine made interesting comparisons between these worlds.
Below, I have outlined the main things I learned from the article. I have also included some questions that you as business leader can use to design a future-ready business model. These apply regardless of whether you are in retail or not.
Wal-Mart spent $10.5 billion on information technology in 2015, more than any other company in the world.
How will this impact the technology infrastructure of all the suppliers and logistics within the Wal-Mart world?
Amazon competes on price, range of products, and convenience.
How will small, locally-focused business models compete in the face of a growing range of online product types sold at unbeatable prices?
What Wal-Mart did for prices years ago, Amazon is now doing for time: time is becoming a larger influence in decision-making.
How should business models evolve to compensate? This will be especially important as customers’ time continues to diminish.
Product shipping is becoming fast and cheap (ex. Amazon Prime), so customers are moving more of their purchases online.
How can you adapt your revenue channels to ensure ongoing future access to your customer groups? Are there specific groups you just cannot afford to lose? How will you keep them?
Retailers need to move their existing customers to a less profitable revenue channel, namely online sales, to keep their existing business.
Will your future business model allow you to make less profit on sales and still succeed? Are you prepared to invest in technology in order to service your customers?
Amazon offers a staggering 1.8 million items of women’s clothing alone.
Barriers to online shopping are disappearing, making it almost impossible for you to compete on product range. How will your future business model draw customers i nto your world?
Major changes are forcing themselves on existing business models. Trying to adapt quickly may just not be enough in certain businesses and industries. It is important that you find out where your industry is going, and how your business model needs to evolve. How can you do that now?