Friday, 14 November 2014

Apples, Oranges and Disruption


Let's say that you sell oranges.


You've built your business through hard graft over twenty years, and become the market leader..... 


You are the Orange King of (insert your city's name here)

Then one day, someone sets up a shop selling apples but not just any apples - these apples come on sticks and they're toffee coated. 

For a while, you pass off your drop in sales as a bad day or bad month, you blame the upcoming election or a big sporting event for taking away your customers (the excuses that retailers use are many and varied) but then you start to notice that more and more people are walking around eating apples on sticks.

So you drop the price of your oranges, you offer two for one deals and all the while you tell yourself that what you are doing is innovative because you've never discounted before and you're oranges are the cheapest they've been in twenty years but no matter how cheap your oranges, the customer isn't buying them and you are still losing customers to the toffee apple seller. 

In an attempt to save your business, you ask the government to step in and ban the sale of toffee apples or add an extra tax on the grounds that toffee apples aren't healthy and that serving apples on sticks is dangerous but when the government defends the free market, the same free market that made you the Orange King, you scream 'foul' and blame the toffee apple seller for not playing fair.

In reality, you're blaming them for having a better idea or  maybe even just the right idea at the right time - you're blaming them for disrupting your business and stealing away your customers with a product or service they didn't know they wanted.

And that is where bricks and mortar retail is at the moment.

Over the years, many retailers have been lulled into a sense of security by the discretionary spending power of the Baby Boomer generation. Far too many retailers have kept the same business model they opened with, they've sold or served the same thing for years because that's what their customers wanted. 

But what was right for the Baby Boomers is not right for Gen X or Gen Y and the generations after them will want something different again. 

Many bricks and mortar retailers have stopped innovating in an industry that demands newness and in the future we will see more disruption not less.

It might be time to start making orange juice.