What is disruptive innovation?

Disruptive brands are innovators who have identified gaps in the market, allowing customers to have what they really want. Companies such as Airbnb and Deliveroo are well-known examples of the success that can follow. An important aspect is that they don’t start by improving existing products, rather offering an entirely different value proposition appealing towards customers who the dominate companies in the industry didn’t value or have ignored. These are brands with such potential that it fulfils unmet market needs.

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New technology enables disruption, allowing companies to take risk in ever growing and developing industries. Disruptors have the ability to move fast, with companies who have been prepared to take a risk. It often solves an issue with sometimes unconventional perspectives.

What is important to remember is that disruption is generally for the benefit of the greater public. It changes integration between companies and the customer and should be embraced.

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A key disruptive factor of Netflix was initially it didn’t go for the core customers of their competitors, like Blockbuster who offered services Netflix didn’t provide. They targeted consumers who were overlooked by competitors and gave an alternative service at a generally lower price.

With the rise of streaming videos, Netflix was able to appeal to Blockbuster’s core customers by proving a larger amount of content, that was more convenient for a lower price. Blockbuster collapsed- allowing Netflix to rise quickly. Another reason for this growth was Blockbuster overlooking them and even refusing to acquire them for just $50 million (2) back in 2000.

 

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In a decade Spotify transitioned from a small Scandinavian start up into a global music streaming service with over a 100 million users and an estimated valuation of $8.5 billion. What set the company apart from its main competitor, Pandora, when it first launched was the fact that it allowed listeners to choose the songs they want to play and create their own playlists. It also gave users the option to use the service for free with ads, and paid subscription being an option. In the final quarter of 2018 Spotify had 96 million premium subscribers (3).

Click here for Marketing Week’s top 100 disruptive brands for 2016 and 2017.

The importance of creating an atmosphere in a retail store

The image a retail company wants to project is clearly projected by the atmosphere they create within the stores. Although you may not be able to define or measure an atmosphere, a customer will be able to feel it. When a store is enticing, not only does it attract customers, but also enhances their experience.

In consumer societies, such as the UK and the US, customers increasingly seek more from retail shopping than just to find specific products as shopping is now an activity in its own right. It has been shown in surveys that less than a quarter of shoppers in malls actually went in there to shop for a specific item, so rather than looking for for ‘that item’ consumers often use shopping to reduce loneliness and boredom, avoid problems and obligations within their lives, seek fulfilment of their fantasies or to simply just entertain themselves. So, if it is this that motivates many consumers, this needs to be take into consideration when the store is designed.

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Retailers such as Hollister, shown in the image above, hire designers and architects to create the ‘right’ atmosphere and spend extortionate amounts of money on things such as decorative lighting, wooden floors and special hangers.There are times when this does work, and equally there are times when is doesn’t. At the time that you get a professional designer to layout your store they will already have an idea of what the store should look like to make it be original- in there eyes. However, this can backfire as it could ironically mean that by trying to look original like every other store means your store looks like all the others trying to do this.

Personally, I think when a company develops the concept of the store that they are looking for, it works best. For an example, if you had a children’s store you could go all out and have a rotating floor in the middle of the store, a slide at the other going from one end of the store all the way to the exit, with excitable music in the background and have children’s characters to play with the customers. Some customers will adore it and others will think it is bizarre- and may even dislike it. But ultimately people will remember your store and it’s true originality.

Stores can just provide entertainment value to customers. Just like how a comical advert entertains people for long enough to process a message through, a store can entertain customers for long enough so that they purchase their goods. For example, I noticed in a Waterstones store there was a section where customers could sit down, play and read. Therefore attracting families so they are able to enjoy their experience and linger in the store.

When you take in mind that customers can easily shop from the comfort of their own home, it is important that the retail store is a special place that is worth the time going to.

Was it ecommerce to blame for Black Friday’s anticlimax this year?

So i’m sure you have all seen the images of people fighting over a flat screen TV or even a pair of trainers in the Black Friday sales, like in the image below, however this year it did not seem to live up to all the hype it has been made out to be and this is proven by sales in the US falling by about 10% from $11.6 billion last year to $10.4 billion in 2015.

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Why is this? I think there are several reasons; a key one being the increase in popularity of Cyber Monday, this year sales in the US sales increased by a surprising 16% from last year in the US. Now there are a host of reasons for this, to start with the obvious, it is a lot more convenient for consumers to do their shopping from the comfort of their own home and not have to face the crowds of people in the sales. Yet there are also a few other reasons such as that many stores had the same offers on for Cyber Monday as they had for Black Friday, delivery methods are now easier than they have ever been- with the addition of services such as Amazon Prime and some stores even have the option to order products online and give them the option to collect it at a local store.

If you take a look at some of the reasons for this occurring- it makes you wonder is it because consumers have more confidence to purchase on their mobile phones, personally think it is. So while ecommerce may not have crushed store sales this year, it has become clear that online shopping has increased  while shopping in stores has decreased.

This doesn’t necessarily mean the end of Black Friday, rather there could be a shift in the way customers experience their shopping to online.