Digital: the empire strikes back – FrenchWeb.fr

by bold-lichterman

The digital tsunami which has been sweeping since the end of the 2000s has swept everything in its path, yesterday’s leaders have been struck down by challengers or new entrants and those who have survived are trembling for their survival.

I had fun the other day making a list of those companies that in recent years have come to populate the cemetery with pre-digital dinosaurs who have missed their turn or even haven’t seen that there is a turn to take.

The main causes of death by digital technology are …

It is easy to categorize these businesses and the cause of their death.

• Lack of clairvoyance: they saw nothing coming.

• Lack of vision: they saw something happen but underestimated the impact or did not make the right choices.

• Lack of execution: they saw, they decided but did not execute their plan properly.

Note that in the last two cases we can also wonder if digital is the cause of death. Seeing nothing coming and being disrupted is one thing, seeing things coming and reacting badly is another.

Funny thing: these are exactly the same as for any other subject. Digital therefore has nothing really special, it’s just a question of appreciation and strategy. Like always.

• Platform effect: in a sector impacted by the platform economy, there can be only one winner surrounded by one or two challengers and small local players. So if one succeeds in his moult, the others can only die no matter how good their strategy is: they just executed it too slowly.

Digital: a cemetery without coffins

And all that remains is to list the deceased and put them in the right box.

We are talking about companies that have indeed disappeared, not those in the process of being rebuilt sometimes in pain. We know that it is harder to transform (because there is an existing one to run, we cannot turn it on / off overnight) than to start from scratch on a new model and we therefore cannot blame those who are doing it.

And there, O surprise, I had trouble filling my list. But luckily I called my network to the rescue and…. we haven’t made much further progress.

So we start easy. Kodak. But contrary to popular belief, it was not the technological breakthrough that killed Kodak. Kodak was even one of the first to enter the market, had good digital cameras and many patents. What killed them is two things: they underestimated the size of the wave and did not dare to let go in a frank way a known and controlled distribution network to rebuild from scratch according to the evolution of the market. Hey… .they have just launched into cryptocurrency. Not bad for an undead.

Next?

Virgin Megastore. No. If we date the beginning of Virgin’s decline to the early 2000s, it wasn’t e-commerce that hurt them, their problem was already strategic and structural. Maybe digital accelerated things but they were already very sick of their own fault before.

FNAC? I see that she is still there and that she took advantage of the context to get her hands on Darty. There is still a long way to go but I know patients who are doing worse.

Nokia? Yes and no. There is a terrible sin of sufficiency when they refuse Apple’s outstretched hand to make the iPhone, but then they succeed in what is unique to digitally mature companies: the hub. Sale of a moribund telephone division to Microsoft, takeover of Withings, takeover of Alcatel-Lucent activities….

Travel agencies? We are in the middle of the platform effect and only have meaning for those specializing in tailor-made and ultra premium.

Retailers? Of course, there have been a few cases, but it is not because some are closing stores that they should be predicted to end, on the contrary. Online only represents 9% of overall sales so there is still room for stores. On the other hand with a real synergy with the online, an experience worthy of the name etc. On the contrary, when Amazon buys Whole Foods, it is not the death of the retailer but more of a strategy of conquering the e-merchant who realizes that he needs a physical network.

The “old” like Yahoo !, AOL and co? Rather, I see in a number of cases a battle between historical digital and new wave digital and an inevitable movement of concentration that followed.

The magazine press? Ok. RIP newsweek to name just one of the best known. The daily press? She suffers, changes with great difficulty but does not die as quickly as one would have said.

Can you make a good digital soup in an old pot?

Car manufacturers? The 2007 crisis hurt them more than Google, but in the end it is they who are in the forefront of the autonomous car with and not against the giants of the techno which we thought they would replace them.

This case also reminds me of taxi companies. Did they suffer? Certainly? Have they transformed? Yes, for example today’s G7 has nothing to do with the pre-Uber G7 anymore. Better yet, while they updated their customer experience they continued to be more or less profitable as an Uber today continues to dig its grave with abysmal losses and faces growing mistrust of its drivers. and its customers. Who will still be there in 2025? I won’t bet my savings on it.

Hotel chains? Marriott-Starwoods, Hiltons and other IHGs are fine thanks for them. AccorHotels innovates without denying that an Airbnb has kicked it in the behind and is forcing it to be more creative in its offer. It is certain that Airbnb “stole” a few nights from them, but there are categories of trips or customers that Airbnb will never do. With hindsight, we can even say that Airbnb has allowed more people to travel and made the global cake bigger than it stole from other people’s plates. Then some customers will remain Airbnb, others will see their expectations and / or their means evolve and will join the traditional hotel industry (in any case the one that has learned the lesson).

In the end, and very surprisingly, there are few deaths. Buyouts, concentrations yes, but certainly less dry disappearances than the collective imagination would like to believe.

Better, some elders after suffering (it is harder to transform by continuing to run the existing for the necessary time than to arrive from scratch) are well positioned to play a role in the future.

Surprising, isn’t it?

The expert:

bertrand-duperrinBertrand Duperrin is Digital Transformation Practice Leader in Emakina. He was previously Consulting Director at Nextmodernity, a firm in the field of business transformation and management through social business and the use of social technologies.

He regularly deals with social media news on his blog.