Really enjoyed reading this; reminded me of when I bought a Fender in middle school and became part of the 90% customer churn rate within a few years lol… Anyway, the biggest shock to me while reading this article was that they didn’t do more after using data to discover that their brick-and-mortar retail experience doesn’t fit the needs of their female customer-base. It’s not hard to imagine why this happens; I remember my local guitar store as a male-dominated shop that probably wouldn’t feel very welcoming to female guitarists. This should change, and especially in an era when musical instrument sales are declining across the board. I am not sure what Fender’s retail approach is (i.e. — company-owned stores vs third part retailers), but they should test out different layouts, employee-hiring practices, sales pitches, and in-store experiences to find ways to attract more female guitarists to boost sales. They could also adapt their product-design process to consider their female customer base. Here is a cool story about how a female designer at EBMM (competitor to Fender) produced a female-friendly guitar that is selling like hot-cakes: http://www.core77.com/posts/47881/Is-This-the-Worlds-First-Female-Friendly-Electric-Guitar
Thanks for covering this interesting story, Gloria! Call me old-fashioned, but I think one of Beepi’s big mistakes was not letting customers “experience” the car before purchasing it through their platform. A car purchase is a big decision: made once only every 3-7 years(ish), potentially tens of thousands of dollars on the line, and your choice will likely effect your quality of life every single day of your life as you transport yourself through life. As a result, many customers still want to trial a car before buying it. This can involve a spectrum of trial-ability, from just “seeing and feeling” the machine, sitting inside and imagining yourself driving, all the way to live test-driving on the road. This would obviously have been an costly feature to add to Beepi’s customer experience, but I think could have helped them succeed.
Thanks for the great post! You hit the nail on the head: digital talent is crucial for the future of consulting firms, but they are struggling to attract, integrate, and retain top digital talent. I completed a summer internship with a top-3 management consulting team, and we had an IT-transformation specialist embedded in our consulting team on-site with the client. His technical skills were superb, and super useful to the client, but I overhead doubts and questions about whether or not he “looked” like a consultant (i.e.– clothing choices, hair style, etc.) and whether or not he “presented himself” like a consultant was excepted to (i.e.– his style of speech, his tone when speaking to the client). I thought these were quintessentially legacy consulting judgment criteria that aren’t as relevant for helping clients achieve digital transformation. These are the types of challenges and resistance consulting firms face to transforming themselves.
Great post, Hans. This is a very interesting example of the data clearly going against the “traditional way” of doing things. I wonder how much of this boils down to basic human psychology… The concept of loss aversion in decision theory tells us that people tend to prefer avoiding losses to acquiring equivalent gains (most people prefer to not lost $5 than to find $5). In the business vocabulary, managers are generally more worried about protecting their downside than seeking an equivalent upside. That being the case, I think data-driven leaders in the NFL will have make an especially powerful and convincing case to convince others to stop punting so much.
Thanks for the great post, Eliza! My fiancé LOVES Sweetgreen, so I get begrudgingly dragged in their Harvard Square location from time to time. I am usually frustrated by the incredibly long line, and your post made me think about how Sweetgreen mobile-app might be a factor. I recently read in the WSJ that some fast food and fast casual restaurants were experiencing increased congestion and other logistical problems due to higher mobile-app ordering (you can find the article here: https://www.wsj.com/articles/mobile-ordering-apps-create-problems-for-restaurants-1508119500). They had to make O20 changes to accommodate the increased traffic flow and impatient mobile-app customers. For example, some chains built a physically separate pick-up area for mobile-app orderers, so they stopped blocking the queue of traditional customers. Also, Starbucks changed its display screens to notify baristas if an order was made by mobile-app or in-person, so that they could notify the mobile-app customers when it’s ready to prevent them from milling around too much. An interesting example of how the push for data-analytics can create unintended consequences!
Thanks for the great post! The rise of AI and data-analytics in the workplace means that managers can keep an infinitely better pulse on workforce productivity, engagement, and performance. However, such increased tracking capabilities comes with serious risks. Namely, with increased ability to surveil and nudge (aka control) their employees, corporate leadership risks overshooting and becoming a “big brother” that uses data to oppress their workforce to the point of stifling creativity, expression, and motivation. Last week, the Economist wrote a leader article on just this topic, explaining the pros and cons and how managers can thoughtfully employ technologies like the ones you described. You can find it here: https://www.economist.com/news/leaders/21739658-artificial-intelligence-pushes-beyond-tech-industry-work-could-become-faireror-more
Very interesting article, thanks James. As your posts highlights, GasBuddy’s current value proposition is clear to both consumers and gas-retailers. However, what happens when we transition to mass adoption of driverless cars and “transport-as-a-servce” solutions that reduce individual ownership? I know this world is still probably 5-10 few years away, but I think it would create serious consequences for GasBuddy’s business model. If there are fewer drivers and individual owners, there will likely be a dramatic reduction in the number of crowdsourced price-reports received by GasBuddy. The core information would still be highly valuable (especially to new corporate fleet owners whose driverless cars will fuel up constantly between picking up and dropping off passengers), but GasBuddy will need to find a new method to crowdsource the inputs.
Very interesting post; Citizen certainly brings up many interesting political, legal, ethical questions for consideration. On the value capture side, I’d like to echo your concerns on their monetization strategy. I think there’s a large risk of disintermediation with that strategy, as users would seek financial compensation or other rewards (fame, airtime, etc) from the news outlets buying up content. Another strategy could be to charge law enforcement agencies some sort of subscription fee for premium services created by Citizen’s unique data. However, this would likely increase the controversy surrounding this company only more.
Thanks for the great post. In terms of Glassdoor’s value creation, I’d also highlight they’re helping to advance pay transparency throughout society. Salary secrecy can lead to pay-gaps based on gender, race, or other superficial factors, which is something that we ought to push back against. With more information on salaries via Glassdoor, candidates under consideration should know what’s fair compensation for the role they’re applying for.
Thanks for the great post, EAP! Two thoughts after reading:
1) I see Walmart as another competitor that will have Wish inside its crosshairs. Prior to the rise of e-commerce, Walmart targeted specifically cost conscious customers by providing low-cost, often unbranded generic items from low-cost manufacturers. With their recent acquisition of Jet.com, they may go head-to-head with Wish in this space.
2) I think it would behoove Wish to invest in a decent due diligence system for the suppliers it allows onto its platform, especially with consumables. All it would take is for the news media to identify one batch of sick kids due to a non-compliant overseas manufacturer’s product, and Wish’s brand would be seriously damaged. I realize this conflicts with the network effect incentive of getting as many suppliers onto the platform as possible, but it’s something Wish should monitor.
Thanks for the interesting post, Ting! As you mentioned, growing inside the massive Chinese domestic market allowed Toutiao to scale quickly and reach a huge user-base. However, I wonder if the Chinese government’s sensitivity over news/information could put Toutiao content germination strategy at risk. For example, what if the AI-driven content delivers news/information to Chinese citizens that is not aligned with the Chinese Government’s viewpoint or preferences? Governments around the world are increasingly worried about “fake news”, but the CCP is notably willing to take action against what it deems as misinformation. I wonder how Toutiao can protect itself from this legal/regulatory risk?
Thanks for the great article, Cyou. I think there is an opportunity for OpenTable to increase revenue through ads. Just like Google, OpenTable could sell sponsored ads to restaurants for their brands to gain prominence in search results and be top-of-mind with consumers. For example, when a user searches for “Italian Food”, the first two or three hits could be specific restaurants that paid OpenTable for sponsored results for those key words. The additional revenue from a service like this could help OpenTable reduce or eliminate the cover fees that you mentioned are pushing restaurants to other platforms.
This would be incredibly convenient. There is an entrepreneur in NYC named Robert Samuel who established SOLD (Same Old Line Dudes), as a professional “line sitting” service. In 2014, he charged $25 for the first hour of waiting in line, and $10 for each additional half-hour. I don’t think he has an app or a network yet, making scalability hard. But he claims to make about $1,000 per week in NYC providing this service, proving there is definitely a use case! Check him out here: http://www.businessinsider.com/professional-line-sitters-2014-7
Great post, MAB — I liked how you used our DIT framework to separate Hotel Tonight’s value creation from value capture. If you are interested in this space, you may want to take a look at a new start up called Overnight (https://techcrunch.com/2016/05/26/overnight/). Instead of dealing in hotel rooms, Overnight positions itself as the “Hotel Tonight of the AirBnB realm” by connecting travelers with a locals who can provide a spare room. Seems like it could provide some competition for Hotel Tonight?
Great job capturing the essence of Amazon’s domination of the retail sector. I agree that standard big-box retail will find it near-impossible to compete with Amazon’s combination of scale, leverage, and convenience. However, I don’t believe Amazon will be able to encroach on the very high-end retail turf. Customers in high-end retail are looking for the “emotional fulfillment” of experiential shopping; the joy of seeing, touching, sniffing, and testing a product before swiping the credit card. True, this is a small sliver of the overall retail sector, but sub-sectors like luxury clothing, confectionary, and novelties provide consumers the high-touch experience that we “social animals” need.
Check out the WSJ essay on the subject of how retailers can thrive in the age of Amazon: https://www.wsj.com/articles/how-retailers-can-thrive-in-the-age-of-amazon-1513382462