Thinking digital is the best bet for business
Food companies are exploring subscription-based shopping solutions for busy young professionals. Even government is offering subscription-based services delivery.
There is no dearth of opinions on industries threatened by technology induced creative disruptions. However, if you are thinking that digital transformation will wipe out traditional industries en masse, think again. Companies are not throwing in the proverbial towel just yet. They are fighting obsolescence by injecting digital technologies into their traditional business. Research dollars are being put to use to find new relevance for these companies in a digital era. This will allow a digital renaissance of sorts for these industries, many of which have their roots in the late 19th century and early 20th century.
The textile industry is reinventing itself by weaving technology into the fabric. This will eventually lead to a digital transformation of our wardrobe. While the fashion industry may strut around in clothes that listen and sense our body's movements and energy levels, smart fabric has more critical relevance in other industries such as fire-resistant upholstery for homes and airplanes, or non-invasive health monitors for serious patients. We could certainly do with noise absorbent curtains in apartments in busy areas. New parents will no doubt appreciate diapers that unequivocally assert the imminent need to be changed.
Many traditional businesses realised that they need to join hands with new age digital companies to build entirely new revenue streams. But many are simply transforming into technology companies. Nike has been pumping technology into its business for years, with its NikeFuel band that eventually rather humbly made way for the Apple Watch. Nike chose to stick to basics. It has embedded technology in what it does best, shoes. This year, it introduced what it calls FitAdapt Tech in its basketball shoes. The shoes have an advanced power-lacing system that has evolved over the years. The shoes adjust to your feet by sensing tension, while the companion app allows the athlete to put on the shoes and change colours. When Nike promised firmware updates for the shoes, they began to sound like a smartphone maker.
Many traditional companies will move into the growing sensor-based economy. Companies that manufacture all sorts of things are turning them into Internet of Things. Now that they are linked to the Internet, possibilities for their reinvention are limited only by our imagination. Lighting companies are providing intelligent control systems for better lighting experience and optimised energy usage. Businesses ranging from waste water filtration system to power grids are using sensors to move from a product centric business to a services-oriented business through a platform.
GE for example is offering a Digital Twin platform for power transformers to manage asset performance. Digital Twins will bridge the physical and digital world for optimising manufacturing plants and repairing them.
Product companies that were originally rivetted to the physical realm are exploring the fuzzy world where the real and the virtual coalesce to create a whole new reality. Product and service brochures are likely to be transformed by Virtual Reality (VR) and Augmented Reality (AR) experiences. Japan Airlines offers a virtual reality experience to upgrade seats at the airport. Pepsico is exploring VR and 360-degree videos for brand advocacy. Coca-Cola asked its brand managers who are great at building ad campaigns to become experience makers.
Newspapers, magazines and the publishing industry will use AR and VR as an added immersive dimension. More than a 100 years old company National Geographic is experimenting with AR to tell a story in an experiential way. Sometimes transformation is as simple a new distribution or business model. Newspapers and magazines are still around after realising that an online subscription model would be the best way to preserve good quality content. Food companies are exploring subscription-based shopping solutions for busy young professionals. Even government is offering subscription-based services delivery.
Businesses and consumption habits are often cyclical. They do remain relevant though in a slightly different avatar. Radio did not entirely die because we started to watch TV, neither did cars kill cycles. According to the Darwinian survival manual, many animals like giraffes underwent drastic physiological changes to adapt to changing global conditions. Let us not be in a hurry to dismiss old industries. If you are looking for digital revival stories, look for businesses that fulfil basic human needs like food, clothing, housing, transportation, and energy.
It is never an easy task for century old companies to challenge their basic tenets to embrace the unknown. They have chosen to disrupt their own business models and product offerings even at the risk of cannibalisation of their cash cow. This process often starts with an enlightened CEO who is able to tell a compelling story about the company's future. It is not enough to do a digital whitewashing of the traditional business. The leadership must be able to think and act like a digital company to remain relevant in the new economic order. Many of them are flying below the radar, so they do not necessarily make headlines. But they are chipping away at their own present to secure a place for themselves in the future.
Shalini Verma is CEO of PIVOT technologies