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The history of innovation in Digital Transformation

Today (at the time of writing 2020), the business model for providing products and services has changed from that of the past. That is also dramatic.

This time, I will write about Digital Transformation.

  1. Product era
  2. Gap from users in the product era
  3. From product era to user era
  4. user era = digital era
  5. In conclusion

 

1. Product era

Can you imagine what business model was the mainstream decades ago?

It was waterfall model which is designed to obtain profit from sequence of flow such as planning, design, manufacturing and sales.

In order to increase profits, there are some ways such as expanding physical sales shops, cutting manufacturing costs and more.

For manufacturing cost reduction, I could say that building a huge factory and mass produce. Another approach is to build factories overseas where labor costs are low.

The advantages are as follows.

  • – Clear negotiations such as budget.
  • – Easy to manage employees because the whole project can be grasped over a period of time.

In other words, we could expect profit growth by swiftly rotating this cycle of negotiations, making many products and selling.

The times have moved and  some competitors appeared then the above idea would be going to get worse and worse for your business.

In order to satisfy your customers, you need to differentiate from your competitors and keep improving your products.

Here is a question.

What kind of products will customers attract and satisfy with?

 

2. Gap from users in the product era

As mentioned before, the waterfall model involves planning, designing, manufacturing and selling products.

What do you think where the opportunities to engage with the customers in this sequence are? Probably the first (= planning / sales) and last (=selling) flow. Besides, you might not know whether that customers are the end users who actually use.

Of course it depends on the products / services, but I think there are many shops which are distributors and retailers type to sell your products. Which means the reality of the product era was the Product-based business model.

This model aimed to sell as much as possible, by mass production and building a wide channel. Not by pursuing the demands of customers.

 

I ask once again.

What kind of products will customers attract and satisfy with?

It is hard to figure it out, isn’t it?

 

 

3. From product era to user era

Is product-based business model useless?

I could say the answer is no.

The point is our consciousness of products has been changing.

I assume that the way users approach the values of products / services is changing as follows.

  1. 1. It does’t matter in any types. The thing is to fulfill its purpose. Which means the emphasis is on the result, not the desire to own it.
  2. 2. Users don’s look at your brand. Users look at the convenience, quality and approachability of the products.
  3. 3. Expanding products / services options through the internet.

Could you still keep saying that

“We take a pride in our brand! Because it is multifunctional and high quality!”

I am sure that improving your products / services is the one of the best way. However, you should take care of your business planning.

  1. 1. What are the concerns users have now?
  2. 2. What makes users happy with your product / service?
  3. 3. What are user’s opinions and requests for product / service?

I am sure you get started to consider about the above.

This is a paradigm shift from the product era to the user era!

 

 

4. user era = digital data era

The digital data is a  keywords that can applies the above three. Which means the conversion of products to data so then Digital Transformation will become known.

Digital transformation has created a new business model.

For example, Netflix used to be a DVD rental company, but now it is converting to an online streaming distribution service to increase profits. In addition, in order to secure users for a long term and continuously, we analyze the browsing history of each user, provide recommended videos, provide new distributions regularly, and experience UI / UX from the user’s perspective. Working on improvement.

Thus, the new user-based business model is:

  • – The relationship between the product / service provider and the customer is direct and bidirectional
  • – The product / service provider distinguishes each customer and values ​​them. In other words, listen carefully to the requirements of each customer and plan / consider the next action.
  • – Treat each customer as the best business partner

 

Then, do you no longer need a real store?

That’s not true. The bottom line is that real stores are a huge addition to your online experience.

The spread of the Internet has made it easy to approach any product or service.

Customers heading to the real store are likely to have researched the desired products and services in advance.

 

From this customer behavior process, for example, Bonobos (male clothing) does not actually sell anything at Guideshops, and if the customer likes the product in the store, Bonobos will ship it to the customer later. The aim of the store is to allow customers to actually touch the product and get advice.

In other words, we are not just using the store for inventory management and sales, but for gaining customer insight.

Analyzing each customer’s access using online data and maintaining product displays in real stores is a good example of customer insight.

Also, some users say that they only use it occasionally and not buy it. In the user-based era, we don’t abandon them. That’s where the Sharing Economy came in.

 

 

5. In conclusion

In this way, if each user is given a digital ID and can be directly involved, he / she can discover customer insights and enhance customer engagement. It can be more concrete.

There are various data in the world. The data may be very useful to some people.

This data will surely save those people!

Let’s always keep the antenna in view.

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