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Digital redistribution

(Photo Credit BreS via Flickr)
(Photo credit: BreS via Flickr)

They are dropping like flies.

First Blockbuster and Kodak. Now Comet, Jessops, and HMV in quick succession. Who next?

Businesses are having a hard time adjusting to the new rules of the digital era and today’s economy is unforgiving.

Part of me is nostalgic for these businesses; the job loss stats are frightening and I’m old enough to remember the failed “Use it or lose it” campaign of our village post office in the 80s.  The other part of me knows that these businesses were designed for an era that no longer exists. They’ve served their time. Under better economic conditions they might struggle on but deep down we know they are better off in business heaven.

So the privilege to turn a profit on the distribution of music, film, cameras, and consumer electricals is redistributed to a first wave of businesses designed for the emerging digital age. Spotify, Amazon, iTunes, Lovefilm, Netflix etc haven’t had to convert themselves from analogue; they weren’t anchored to legacy business models, infrastructure and thinking. They had a blank piece of paper, the courage to try something new, and a healthy dose of luck.

(Photo credit: Todd Robinson via Tumblr)
(Drawing credit: Todd Robinson via Tumblr)

To blame the likes of Amazon and Apple for the demise of HMV and Co is to deceive ourselves. We consumers killed these companies through our purchasing choices. By showrooming to handle a camera at Jessops and pick the brain of the sales agent before going home to think about it buy it on Amazon. We’ve all done it. By giving 30% of our money for iTunes songs and apps directly to Apple instead of shopping in HMV. By buying Amazon gift vouchers. There’s no judgement here; that’s just how it is.

The New Year brought some financial housekeeping to the Tatman household. Our bank statements reveal the extent and spread of our digital reliance through subscriptions and online shopping receipts. Specialist sports retailer Wiggle won last month’s battle but Amazon will no doubt reign supreme again this month.

Such specialists have some hope for survival in the digital era. Wiggle can sell me a commodity item like a mass-market bike pedal far cheaper than my local cycle shop. But if I want expert tailored advice on fitting and usage then local specialist wins every time (AthleteService in Henley). Wiggle can’t watch me pedal and give me adjustment guidance via Skype. This service hasn’t been digitised. Yet.

So the music and video incumbents have been displaced as the medium becomes purely digital. What products and services will be next? For other industries the patterns and warnings are there to learn from.

One predictable thing about change is its unpredictability. It’s early days for the digital era so I expect plenty more digital redistribution along the way as business models are tested and today’s winners are disrupted. This cycle of creative disruption, of births and deaths in business is nothing new; it’s survival of the fittest out there and always has been.

Exciting times.

 

Published by

RobTatman

Rob is a consultant, technologist, facilitator and outdoorsman. He lives with his wife in Henley-on-Thames.

2 thoughts on “Digital redistribution”

  1. Thanks for the mention Rob. We couldn’t agree more. Nowadays for small independant shops especially it is all about the service and advice; for us selling 20+ years of knowledge and experience in World class cycling and triathlon competition and training. Anyone can flog kit and there is increasingly little money in it for “proper” shops to try to compete with the large online retailers. As you mention online business is changing how people buy and sell but one must at least hope there are enough consumers such as yourself who value actually having some advice to buy the right product in the first place and keep it working (there is too much of a throw away culture with most items).

    Retailers have to adapt and those shops going bust are generally ones who have been too slow to change. Interestingly on your note about guidance via Skype, we recently had an ex Olympic and World champion rower (a regular who has been in for bike fitting previously) send us a video from his phone from New Zealand asking for our thoughts on his position and pedalling technique, worked pretty well however there still isn’t a substitue for face to face advice…

    1. Hey Rob, many thanks for sharing your business owner perspective on this. Keeps us consultant types honest :)

      The NZ video story is a great example of the value of specialist knowledge and how businesses can experiment with new ways of making that knowledge count for their customers.

      Here’s hoping Shaun White sees it that way when I send him a video of my dodgy snowboarding technique and ask for his thoughts!

      Keep up the great work.

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