Do you want to undermine your competitors and disrupt your sector? Then use digital to enhance the user experience.
Organisations have one of two motivating factors — fear or opportunity.
A young, hungry company’s motivation lies in new opportunities. Opportunities to grab marketshare, disrupt a sector or leap frog the dominant players. Digital gives you those opportunities.
More established companies find their motivation in fear. Fear that their existing business model is being disrupted or that the sector will change in someway. If that is your organisation then watch out because digital is about to do exactly that.
In this post I want to show you the amazing opportunities and worrying threats that digital brings. And I want to do that through four case studies. I am going to avoid the classic stories such as iTunes and music retailing or Blockbusters vs Netflix. I have written about these before. Instead I am going to focus on examples that are in the midst of disrupting their sectors.
For those of you hungry for new opportunities, it will spark some ideas of how you can disrupt your sector. For those of you looking to maintain your market share it should motivate you to change.
Our first story is that of Uber.
Uber and the London cabbies
Uber is disrupting the taxi service and using digital to do it. In particular it is using digital to improve the users experience. In doing so they have ruffled a lot of feathers, not least among London taxi drivers.
The problem is that catching a taxi in London is horrendous. Not only is it expensive, it is also a painful experience.
Hailing a London taxi can be a nightmare at certain times of the day. Most taxis don’t take cards and so you have to go to an ATM first. When you do get the taxi you are reliant on their knowledge of London, because they don’t have a GPS fitted. Finally when you reach the destination you sit there in traffic waiting for your change and receipt.
In contrast Uber makes it easy. You order your driver via their mobile app. Your location gets passed to the nearest driver who comes to pick you up. The app gives you an ETA for the driver and even an estimated fee for the trip.
The driver then takes you to your destination while you follow along on the app, confident he isn’t taking you the long way around.
When you arrive you get out and walk away. Payment is automatically charged to your credit card and a receipt emailed to you.
It is hardly surprising then that Uber is taking off in a big way. They have used digital to create a much better user experience. And the London cabbies do not like that.
They have gone on strike to protest against Uber. Much like the music retailers when Napster appeared they are claiming that Uber is breaking the law. But in truth they don’t like the fact that the landscape has changed. That digital has enabled others to compete. That their knowledge is now obsolete in the world of GPS.
Instead of adapting they are shouting ‘its not fair’. But in truth the better user experience will win out in the end, fair or not.
Another example of a new player disrupting an existing market is FreeAgent. Unlike Uber, FreeAgent has focused on providing self service thereby saving their customers money.
FreeAgent is a book keeping app. It allows small businesses to manage their taxes, invoicing, projects and clients in one place. Where once you would have had to hire a book keeper to manage your accounts, today you can do it yourself.
FreeAgent does away with the need for book keepers. It also makes managing a small business easier. It allows the business owner to focus on doing their job and not managing paperwork.
Dealing with accountants and tax is a pain for most small business owners and so there was an opening to simplify the experience. But until Digital they were a necessary evil. Today all that has changed and you can expect the world of book keeping to change too over the coming years.
It’s not just new players that are making good use of digital to grab market share. Traditional businesses are too. DPD is a parcel delivery company that has been around since 1970. Yet today they are leap frogging their competitors with a superior, digitally driven service.
Consumers have come to love DPD and that has won them major contracts with the likes of Amazon.
So why do consumers like DPD so much? Because they use digital to offer a superior service.
Getting a parcel delivered is a disruptive process. Most companies will give you a day for delivery but that is all. This means you need to be home all day to receive it. You can’t even pop out for a pint of milk for fear of missing them.
DPD realised this and have enhanced the experience. For a start you will receive an email or text the day before with a one hour slot. This is calculated by a complex backend system using previous delivery data.
Next, on the day of the delivery you can go to the DPD website and track your delivery in real time. The GPS coordinates of the driver show on a map, allowing you to judge whether you have 10 minutes to pop to the shops. It even tells you how many deliveries it has to go before reaching you.
By taking digital technology such as GPS, DPD was able to gain a competitive advantage over the competition.
Digital can also be used to carve out a niche in even the most well established of industries. Take Go Henry. They provides bank accounts for children.
If you are a parent you will know pocket money is a pain. Kids want to buy stuff online so you can’t use cash. Or they don’t have their money when you visit a shop so you end up paying on your card. Then there are chores and helping them learn about money management.
Once they are about 10 or 11 you can get them a bank account, but most banks are not setup for kids. Most banks don’t allow children to use their banking apps so they don’t know how much money they have. Also you have no control over what they spend the money in their account on.
Go Henry saw this need and identified a way of using digital to solve the problem. They have taken a neglected part of the banking sector and created a thriving business using digital.
With Go Henry you can give your child a debit card, but set all kinds of limits on it. You can also setup chores for earning extra money and pay pocket money automatically so you don’t need to remember.
The child’s experience is better too. They can see how much money they have and even set up savings goals to get that latest xbox game.
Digital can improve the user experience
What is the unifying factor in these four stories? Is it the disrupting impact of digital? Well, kind of. What each story has in common is that digital creates a better user experience. It is that improved user experience that is disruptive.
Look at your own business. Get to understand the user experience and then look for ways that digital can enhance that experience. Only then will you embrace the new opportunities or stave off the threats of digital.