Can Your Business Survive In The Digital Economy?

Businesses in all areas of the economy have to find new ways to get customers in a world driven by digital. But there are rich rewards for those who make the right choices.

Disappearing boundaries

The boundaries between business sectors are disappearing as technology allows new competitors to enter old industries. Technology companies collect and dissect people’s personal data to compete in different markets. Traditional non-competing segments of industry are now in direct competition as they chase the same customers. And the disruption causes a rethink of business models, as companies search for new ways to sell to digitally savvy buyers.

In previous eras, firms merged with other firms in similar sectors to grow and add value for shareholders. Good things happened when it worked and those at the top paid the price when it went wrong. Mergers were announced with great optimism until the first rounds of cost cutting began. Bringing different cultures together was always the biggest challenge. Once the complexity of getting people to work together was fully appreciated more modest alliances were sought. Less ambitious growth plans over longer periods of time were adopted. Rather than attempt to get into new industries other parts of the supply chain were explored as a better way to gain new customers.

In recent years however a new era has begun which is very different, as technology allows businesses to think the unthinkable and enter unrelated industries. Every business is now vulnerable to attack from new technology, as the currency of competition lies in the capacity to collect and manage data. Such advances accelerate the pace of change as businesses scramble to avoid obsolescence.

Disappearing customers

Against this background, there are many reasons why businesses need to embrace the digital economy. They include:

  • customers in all categories are choosing smartphones and other mobile devices to purchase goods and services
  • businesses need access to mobile customers as online sales increase and traditional retailers suffer
  • shops and other outlets suffer from high costs as customers buy from the comfort of home while enjoying fast deliveries
  • old ways of buying and selling goods are dwindling as the next generation of digital natives shape the economy
  • new ways of advertising and the use of social media platforms challenge customer and brand loyalty
  • the idea of selling to customers based on what they need is enabled by technology that micro-targets individuals and customises offerings
  • access to the internet and superfast broadband is changing the shopping experience as access and availability are decentralised
  • the reality of the always-on, always-connected customer means businesses must be flexible and respond quickly

So, the economy thrives on change but the shift to a digital economy is causing major and disruptive change and every business must engage to survive.