Those of us with an interest in digital business are obsessed with disruption.
We’ve seen Amazon – with its infinite shelves – disrupt book retailers. We’ve seen Wikipedia – with its crowd-sourcing of knowledge – disrupt encyclopedias. More recently, Netflix disrupted the video/DVD rental market. Spotify disrupted the music market. Uber has disrupted the taxi market.
There are so many examples of digital disruption. It is understandable, given how inevitable it seems. And with internet of things, augmented reality and artificial intelligence technologies increasingly entering into our lives this inevitability seems even more certain.
I don’t doubt that digital disruption is broadly inevitable, but I do question how ‘all or nothing’ it is. So I’ve looked into some areas where this inevitability can be questioned.
Sectors with room for both
Digital disruption doesn’t always mean that a new digital business or technology is going to supersede the traditional competitor.
It was certainly the case for Wikipedia vs. Encyclopaedia Britannica and Netflix vs. Blockbuster, but it seems for each example of digital replacements, there are other examples where the disruptor and traditional can co-exist quite successfully.
This is even the case with Amazon. While independent booksellers may be rarer in the digital era, high-street bookshops like Waterstones have largely retained their traditional operations – which, despite the in-store cafes and slight diversification of product offerings such as board games, is a format that is defiantly non-digital.
Digital disruptors can even sometimes be seen to support traditional competitors. The rise of Spotify and audio streaming has, for example, mirrored a renaissance in vinyl records and subsequently seen traditional record stores open rather than close. It is arguably a good promotional tool for deluxe physical formats.
Online learning platforms are another example of this. Freek Vermeulen writes at Eden McCallum, ‘Many have been proclaiming that online learning will render lectures obsolete, that physical colleges will be replaced by online universities, and that MOOCs will be the new norm. However, this is not what seems to be happening.’
Rather than replacing traditional universities and lectures, online learning is rather acting as an accessory to their value.
The traditional elements of the above examples look to the emergence of niche business propositions in the face of digital disruption. If we consider niche businesses as a broader business category, we can also spot other examples of analog pockets which are likely to resist disruption.
For instance, if we look at the CPG market and e-groceries specifically, we can expect increased disruption as IoT devices and digital-only stores make more of an impact. But those who focus in on niche groceries such as luxury, organic, local and ‘home-made’ produce are likely to be able to retain their traditional values and sit alongside the digitally disrupted.
This notion is echoed by Paul Marsden at Digital Intelligence Today, who suggests the move into more niche business offerings as a possible route to navigating an increasingly disruptive world. He points to ‘travel agents focusing on corporate travel’ as well as ‘book sellers and publishers focusing on academia’ as other examples.
Another thing to consider when discussing digital disruption is how urban-centric and Western-centric the conversation often is.
While countries such as the United States and United Kingdom sit comfortably within the Top 5 of the Global Connectivity Index, digital connectivity is still inconsistent and sometimes non-existent for people in certain locations.
This means that while digital disruption can be occurring in a certain market, it won’t always have the same effect elsewhere. Streaming services such as Spotify and Netflix are certainly less disruptive to regions with slower internet connections. Uber is disruptive across numerous global cities, but is perhaps unlikely to cause much change to taxi companies in rural areas.
Technological limitations due to geography are one consideration, but cultural issues such as language, social behaviour and laws all have an impact on how digital evolves from market to market.
Inevitable or not?
Digital disruption is certainly happening, but it is not always a case of ‘new digital things’ arriving and doing the job better than ‘old analog things.’
It is exciting to predict what the next big disruptor might be. But its arrival might just sit alongside its competitor. It might add value to a market. Or stimulate the emergence of niches. It might take hold in New York but skip Nairobi.
The inevitability is that businesses need to be ready to adapt, but the world will always be both digital and analog.