What is digital disruption?
Digital disruption refers to changes enabled by digital technologies that occur at a pace and magnitude that disrupt established ways of value creation, social interactions, doing business and more generally our thinking. 1
In today’s digital world, it has become increasingly easy for a small idea to disrupt traditional industry. Digital-native entrepreneurs are (and have been for some time) pinpointing service or product areas that can be significantly improved by using digital technology. These “digital disruptors” are instigating change that “interrupt[s] established ways of value creation, social interactions, doing business, and…our thinking” . 1 Users, who are now much more technologically adept than they were a few years ago, are quick and willing to adopt new ways to do things—and are benefiting the most from this age of “digital disruption.” This is especially true for measuring and predicting trade promotion optimization and management. As a result, CPG companies must not only adapt internally with technological changes, but also acknowledge how those technologies affect your business model.
Think about your own life as a consumer. What is the first thing you reach for in the morning? Today, people are more comfortable than ever with user-friendly digital interfaces on a multiplicity of devices. In addition, their desire to make tedious, encumbered tasks easier (and cheaper) drive many tech-savvy consumers to continually look out for new ways to do them. As a result, new web and app-based businesses such as Uber, Netflix, and Venmo are becoming increasingly popular which a new generation that is constantly connected and on-the-move.
According to a survey by Social Times in 2013, 79% of people between the ages of 18 and 44 have their smartphones with them 22 hours a day, with 80% of the same people saying that the first thing they do in the morning is check their cell-phones. 1
So why are most CPG organizations falling behind when it comes to embracing disruptive technologies? The popularity of new digitally-based businesses has presented a significant threat to larger, more traditional organizations which are entrenched in their usual routine of providing a particular product or service. Traditional businesses need to be able to think like a digital start-up if they want to remain competitive in the economic environment to come. Although most of these larger corporations are far from being digital-natives, they should aspire to be a digital disruptor themselves, by founding their new business model “on the premise of improving or simplifying the lives of end users” (13). Within many industries, organizations that did not make the switch fast enough became obsolete and perished.
According to Ray Wang, the Principal Analyst at Constellation Research, “since 2000, 52% of companies in the Fortune 500 have either gone bankrupt, been acquired, ceased to exist, or dropped out of the Fortune 500”. 1
You wouldn’t use or embrace archaic technology in your personal life. We keep pace with the latest technology whether it be tablet, smart phone or soon to be universally embraced smart watch that is all geared to provide us with real time information necessary to managing our day to day lives. Why have we accepted far less regarding the technological advancements available to us today in our business lives? If you are like most CPG manufacturers you are burdened with multiple disparate data intelligent silos that need to be manually compiled to spreadsheets to manage your business. This process is anything but real-time or real accurate. The cloud has provided us with unlimited data flexibility and storage in real-time. The spreadsheet is equivalent to running our personal lives with a land line, a pay phone and a fax machine. So now it’s time to make the change in business. You can take the first step by evaluating and choosing the right software platform (see our previous blog (Asking the Right Questions When Choosing a TPM/TPO Platform).
T-Pro Analytics clients who implemented our trade promotion optimization software have seen immediate success. T-Pro is positioned as a leader in trade promotion optimization software, disrupting the status quo, and seeing real results based on real-time insights and predictable capabilities. Contact us today for more information and to schedule a demo.
(1) SiteCore, “Digital Disruption: Have You Been Disrupted Yet?” (2015)
What to read next: Fear of disruption limits CPG abilities to stay competitive - PART 1 of 2