Unlocking the Customer Value Chain: How Decoupling Drives Consumer Disruption - Hardcover

Teixeira, Thales S.; Piechota, Greg

 
9781524763084: Unlocking the Customer Value Chain: How Decoupling Drives Consumer Disruption
Hardcover
ISBN 10: 152476308X ISBN 13: 9781524763084
Verlag: Crown Currency, 2019

Inhaltsangabe

Based on eight years of research visiting dozens of startups, tech companies and incumbents, Harvard Business School professor Thales Teixeira shows how and why consumer industries are disrupted, and what established companies can do about it—while highlighting the specific strategies potential startups use to gain a competitive edge.
 
There is a pattern to digital disruption in an industry, whether the disruptor is Uber, Airbnb, Dollar Shave Club, Pillpack or one of countless other startups that have stolen large portions of market share from industry leaders, often in a matter of a few years.

As Teixeira makes clear, the nature of competition has fundamentally changed. Using innovative new business models, startups are stealing customers by breaking the links in how consumers discover, buy and use products and services. By decoupling the customer value chain, these startups, instead of taking on the Unilevers and Nikes, BMW’s and Sephoras of the world head on, peel away a piece of the consumer purchasing process. Birchbox offered women a new way to sample beauty products from a variety of companies from the convenience of their homes, without having to visit a store. Turo doesn't compete with GM. Instead, it offers people the benefit of driving without having to own a car themselves.

Illustrated with vivid, indepth and exclusive accounts of both startups, and reigning incumbents like Best Buy and Comcast, as they struggle to respond, Unlocking the Customer Value Chain is an essential guide to demystifying how digital disruption takes place – and what companies can do to defend themselves.

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Über die Autorin bzw. den Autor

Thales Teixeira is the Lumry Family Associate Professor of Business Administration at HBS. His work has been published widely in scholarly journals such as Journal of Advertising Research, Journal of Marketing Research, and Marketing Science, as well as in Forbes, the Economist, the New York Times, and Harvard Business Review. Before joining HBS, Teixeira consulted with Microsoft, HP, and Prudential, and he has given stragetic counsel to Nike, Unilever, and countless tech startups.

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Chapter 1

The Discovery Journey

If you’re a big-box retailer, you want your stores jammed with customers. The busier your stores are, the more sales you’ll log. Pretty obvious, right? Well, not always, as it turns out. At the height of the 2012 holiday shopping season, Best Buy, the world’s largest electronics retailer with almost fifteen hundred U.S. locations, saw its stores packed with people. The customers marveled at the glowing displays of forty-two-inch Sharp flat-screen TV sets. They crowded around to test new Samsung laptops with Intel Pentium processors. They browsed through Blu-ray sets of Mad Men seasons. Yet there was one thing that customers weren’t doing as much of as in the past: pulling out their wallets. Best Buy’s sales fell that quarter by almost 4 percent.

Instead of buying, many visitors played with their smartphones as they shopped. Tapping at their screens, they scanned barcodes from TV sets and laptops, or snapped pictures of DVD covers. Within seconds, price comparison apps on their phones searched the inventory of Amazon.com and other online competitors, often locating prices that were 5 to 10 percent lower. With a few clicks, users made purchases online and arranged to have items delivered directly to their doorsteps. Again and again, Best Buy employees watched as would-be customers left the store empty-handed.

These customers were engaging in a practice called “showrooming.” And in 2012, Best Buy was hardly the only victim. Apps such as Price Check by Amazon turned the brick-and-mortar stores of Walmart, Bed Bath & Beyond, and Toys “R” Us into showrooms for many shoppers. As Google reported, more than six in ten smartphone owners used their phones in-store to help in shopping. In surveys, shoppers reported that their top three reasons for “showrooming” were better online prices, their desire to see products in person before ordering online, and the unavailability of items at retail stores (e.g., due to stocking shortages). For the first time, technology presented what former Best Buy chief marketing officer Barry Judge called “an opportunity [for a competitor] to steal a sale right when someone is in the throes of making a decision.”

Showrooming, while seemingly a physical retailer problem on the surface, is a prime example of the digital disruption that has unsettled so many industries, from media to telecommunication, finance to transportation. In Best Buy’s case, disruption exacted a steep toll. After the 2012 holiday shopping season, the company reported a $1.7 billion quarterly loss. Sales continued to decline for the next year and a half, and Best Buy’s stock price plunged to a twelve-year low. “Are We Witnessing the Death of the Big-Box Store?” one newspaper headline wondered. Inside the company, management floundered. The company’s veteran CEO resigned, and his successors differed on how to respond. Although the interim chief executive wanted to tackle showrooming head-on and put an end to the practice, the board’s final appointee initially doubted whether the practice even posed a problem. Academics, analysts, and journalists also articulated conflicting views. Some argued that Best Buy should follow Amazon’s lead, expanding its differentiated offer and selling cheaper online. Others believed Best Buy should model itself after Apple, stocking fewer products and focusing on high-end stores. The outlook for Best Buy seemed so dire that the company’s founder came out of retirement with a bid to buy out the company.

Best Buy wound up deploying an array of tactics to prevent customers from showrooming and to entice them to buy at the store. It tailored its in-store barcodes to prevent customers from attempting to showroom using mobile apps. It refrained from placing barcodes on some products inside stores and used in-store exclusive barcodes to prevent shoppers from finding lower prices through price-comparison apps on their phones. It renovated stores, retrained staff, relaunched its online store, and offered exclusive products only available at Best Buy, such as special editions of Blu-ray movies. The company also went on the attack, creating its own shopping app. None of these tactics seemed to deter consumers from showrooming.

In the spring of 2013, after another lost holiday shopping season, Best Buy finally made a bold move: it promised to match prices with Amazon and other online retailers. The decline in sales flattened, and by the end of the year, CEO Hubert Joly announced: “Best Buy has killed showrooming.” But had it? Was the strategy sustainable in the long term? Unlike its online competitors, Best Buy still employed retail staff, maintained stores, and carried inventory across numerous locations. As a result, its costs were fundamentally higher than those of online retailers with centralized warehouses and no retail staff. Price matching stopped the leak of customers, but it ate into profit margins without addressing the root cause of the industry’s disruption.

You might think Best Buy had little choice but to experiment wildly with one-off tactics. After all, the threat it faced—showrooming—was unprecedented. As a result, Best Buy executives had little ­science to call upon, and no general frameworks or theories to deploy. They also had no cases in other industries to study for guidance, inspiration, or best practices. What did disruptive phenomena in other industries have to do with what they were facing? Feeling besieged by a threat that seemed to come out of nowhere, all they could do was retreat into their industries and take tentative stabs in the dark. Of course, the executives at Best Buy were hardly alone in their powerlessness: their peers at other large companies, including Comcast (facing disruption from Netflix) or AT&T (under threat from Skype), also hunkered down, focused on what they knew, and waged a series of indiscriminate campaigns against their digital challengers.

Today, executives at incumbents fare little better. They remain stymied by disruption, uncertain of what to do. But what if disruption is actually the same across industries? What if the threat posed by Amazon to Best Buy bears a structural similarity to disruptive threats in a range of other industries? What if just a single dynamic has unsettled markets in recent years, a hidden pattern of attack by upstart competitors? That would change everything for leaders of incumbent firms. If you could understand this hidden pattern, then you wouldn’t be blindly feeling your way any longer. Even if disruption is rearing its head in your industry for the first time, you’d be able to respond in a methodical way by deploying a generalized framework. Threats that seemed uniquely yours and existential in nature would become more comprehensible, predictable, and thus manageable. Disruptors would no longer be so, well, disruptive after all.

Puzzled by Disruption

It turns out that individual instances of disruption aren’t nearly as unique as most executives assume. A pattern does exist—one that I uncovered almost by accident. In 2010, a year after I began teaching at Harvard Business School, I sat down to write my first case study. I had chosen to focus on how online streaming services such as Netflix had challenged Globo, Brazil’s biggest media company. As a conglomerate of television and radio stations, newspapers, websites, and other media properties, Globo captured 70 percent of all TV advertising revenue at the time. But their most successful product—telenovelas (soap operas), popular in Latin America since the 1960s—wasn’t doing so well.

I visited Globo’s headquarters and interviewed about a dozen of its executives, including...

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Verlag
Crown Currency
Erscheinungsdatum
2019
Sprache
Englisch
ISBN 10 
152476308X
ISBN 13 
9781524763084
Einband
Gebundene Ausgabe
Anzahl der Seiten
352
Kontakt zum Hersteller
preigu GmbH & Co. KG
mail@preigu.de

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