They’re generating true disruption. Consumers are already spending less on food, entertainment and clothing as platform business models create deflationary pressures on prices for commoditized goods. Traditional businesses are seeing the trouble ahead: 93% percent say that they expect their industry to be disrupted within the next five years, but 80% also say that they aren’t prepared.
And with COVID-19 upending assumptions around footfall and customer behavior in 2020, companies are having to change their business models on the fly and in totally new ways. Look at Pret a Manger. It’s launched a drinks subscription service for £20 a month (YourPret Barista). Want up to five drinks a day? That’s your reason to visit. And while you’re there, you’ll probably buy lunch, or a muffin with your coffee, and remember your old buying habits as you transition back to the office. It’s a creative way to generate new footfall. And it may just work, with Forbes reporting a similar US model attracting more than 800,000 sign-ups so far.
When data is fuel, you can use it to drive entirely new business models.
And cross-selling for network economics
Traditional companies should look to augment their product/service business towards one enhanced by network economics. It’s not easy, as it requires thinking like a data business at all levels. This is both a practical issue of using data, but also a cultural one of how to embrace it.
However, once businesses start to put data and connections at their core, they will be able to find the products and service propositions that cater best to their customers.
For example, one financial service business suggests cheaper flight options to its customers when they’re booking a trip. They serve their customers by connecting to other services. They are not a travel agent or a price comparison site, but they are in the business of creating a great experience. And it supports their brand promise of helping customers save and spend better.
A network business model in a nutshell: how is it different?