by Martin Wild, Chief Digital Officer, MediaMarktSaturn Retail Group, Germany
by Rebecca Homkes, Teaching Fellow, Executive adviser and consultant, Director and Partner, GrowthX Corporate, UK
by Steven van Belleghem, Expert in Customer Focus in a Digital World, Belgium
New technologies are rapidly disrupting the home improvement market, as they have transformed the consumer behavior through the use of mobile devices and other consumption channels. The consumer centricity of the actual business model has elevated data to the highest level of importance. Some analysts say data is the “new oil”. Hence, many global companies are investing large amounts of money to develop virtual reality and artificial intelligence, as a way to get and analyze more data and to forecast new trends. In this session, we will tell you how to start your self-disrupting process.
Globally, eMarketer estimates that online shopping is worth around US$1.9 trillion but the repercussions of the technological revolution have been particularly significant in the US, where e-commerce accounted for less than 12 percent of total retail sales last year, according to Forrester Research. Credit Suisse forecasts that 8,600 bricks and mortar stores will close in America by the end of 2017, more than the number that disappeared in 2008, the first year of the Great Recession. In 2016, nine American retailers filed for bankruptcy; ten did so in the first four months of 2017 alone.
“Millennials have turned the world upside down. Apple, Airbnb or Uber have all been driven by them. Their behaviors, although not homogenous geographically, have certain common threads; being digital native, not going into bricks and mortar, driving online sales, putting a premium on experience and wanting things delivered and done – that’s why they’re known as the Do It For Me generation. Let’s take Airbnb as an example – it started five years ago, just two guys who were looking for a decent place to stay, and now it’s got twice the market cap of Hilton Hotels. There are hundreds of these examples”, says Willy Kruh, Global Chair of Consumer & Retail at KPMG International.
Think like a start-up! Many of the major players have decided that the best way to compete with start-ups is to invest in their own. Many of the big global companies are looking to disrupt themselves and have set up venture arms to help them think and operate differently.
Be a disruptor. Even large, global companies can disrupt markets if they are agile, build the right networks and dare to innovate. You don’t have to be a start-up to think like one.
The view that the best way to survive disruption is to lead it is increasingly being accepted by many established manufacturers and retailers. There is a balance to be struck – executives need to manage today’s business efficiently while positioning themselves to meet tomorrow’s demands – but many companies are changing their strategies, structures, and business models.
Embracing disruption or die? Discover how home improvement companies are disrupting themselves in order to adapt to the new digital consumer.
Companies are still dissatisfied with the speed and efficiency with which they develop, manufacture and deliver products – and that is clearly revealed in this survey. These concerns reflect the fact that too many supply chains remain driven by product – rather than demand – and are not aligned closely enough to the business’s strategic goals.
Yet by moving towards a genuinely demand-driven supply chain, companies can boost sales, cut costs and reduce inventories. This will also make it much easier to embrace the technologies that are already starting to transform the industry and the supply function, especially robotics, virtual reality and artificial intelligence.
“In the future, every part of the supply chain will rely on artificial intelligence, because the network of AI systems will design the supply network”, Erich L. Gampenrieder, KPMG International.
Moreover, with AI, companies can use data analytics to develop actionable insights and anticipate trends. The scale and pace of change in consumer markets rewards businesses that get there first.