Who Turned The Lights On?
Over the past ten years, the business world has exploded with the creation of companies that utilize an incredibly wide array of innovative, world changing ideas. These companies soared to the top of market capitalization value faster than businesses in the United States had ever grown, and their growth is only just beginning.
They have redefined business models, business practices, as well as asset and personnel utilization. A veritable business and social revolution has occurred.
On-line retailers, like Amazon.com, have changed how America goes shopping. Anything and everything a person would want is now available on-line and offered by thousands of retailers, who either didn’t exist ten years ago, or only sold through storefronts. Many use their own websites, while others sell through the larger e-commerce site. Regardless, their impact on the retail market has been profound.
The Census Bureau of the Department of Commerce reported that U.S. retail e-commerce sales has increased from 2.8% all U.S. retail sales in January, 2006 to 7.4% for the third quarter 2015. E-commerce now affords anyone with something to sell an innovative platform to offer their product or service to the world. Sellers can display their wares to anyone with an internet connection; a vastly larger audience than foot traffic in a conventional storefront. And the shoppers who do prefer visiting retail stores now have the opportunity to price shop specific products before they leave their homes.
Business to business (B-to-b e-commerce sales) sales in the U.S. will grow from $780 billion in 2015 to an estimated $1.1 trillion in 2020, according to Forrester Research’s “U.S. B2B E-Commerce Forecast: 2015 to 2020″ report released earlier this year. Consumers purchasing more products and services online, in addition to improved e-commerce technology, will drive this growth. The two industries leading b-to-b e-commerce purchasing, in terms of revenue, are petroleum and pharmaceutical, according to Forrester. And e-commerce will make up 12.1% of all business to business sales in the U.S. in the next five years, up from 9.3% in 2015.
Social media companies didn’t even exist a dozen years ago, yet today over a billion and a half people are connected through these social networks. Businesses are rapidly learning how to take advantage of this incredible, relatively inexpensive format. New platforms are constantly being created, each designed for a different audience with unique attributes.
For example, “Facebook is a great arena for business to consumer sales,” says Colleen Francis, a sales expert and president of Engage Selling. “LinkedIn is the appropriate platform for sales of business-to-business products and services, and Twitter can be employed for all kinds of sales.” And you needn’t limit yourself to the three big social networking sites; blogs, live chats and comment sections on websites are also great places to generate leads.
“It’s also important for brands to consider tools like Instagram and Pinterest, along with their Facebook strategy, to increase visibility and sales,” adds Janet Fouts, a social media coach and chief executive of Tatu Digital Media. “Several of my clients are getting great results from Instagram. But like any site, you can’t simply post products. It’s all about engaging with the community, presenting products in fun and interesting ways, and offering a collection of images and posts that appeal to the lifestyle of your end-user.” She says you can really find prospects any place online where a relevant conversation is happening—so you need to find out where your market is having conversations, and then go there.
A third revolutionary business platform is the on-demand, or sharing, economy. Companies such as Airbnb and Uber have grown from simple ideas into mammoth enterprises almost overnight. Their idea was to connect people with available accommodations (lodging in the case of Airbed, and car service for Uber) through mobile apps.
Airbnb, founded in August 2008 is a website for people to list, find, and rent lodging. Today it has over 1,500,000 listings in 34,000 cities and 190 countries. None of the lodging accommodations listed on the apps are actually owned by Airbnb, but are offered by their owners, with complete descriptions and pricing terms.
Uber Technologies Inc. (stylized as U B E R), an American international transportation network company, is headquartered in San Francisco, California. Uber’s first app was released in June, 2010 in San Francisco. The company develops, markets and operates the Uber mobile app, which allows consumers with smartphones to submit a trip request, which is then routed to Uber drivers who use their own cars. As of May 28, 2015, the service was available in 58 countries and 300 cities worldwide. And by late-2015, Uber was estimated to be worth $62.5B.
According to a 3,000-person survey conducted in November by think tank, The Aspen Institute PR firm Burson-Marsteller and media company Time, 86.5 million people in the US have used at least one service in the sharing economy, and 42.3 million people in the US have worked in the on-demand economy.
These are remarkable changes in how the world is conducting business. These changes haven’t wrecked havoc with the traditional business models of the past century, but they have put the world on notice that ‘business as usual’ just won’t cut it in the coming months and years. Every business owner must take a very introspective look at how it is positioning itself in its marketplace.
Could it be that 2016 will be the most innovative and transformative year of our lives? New internet and digital technologies have certainly afforded us with new tools, as significantly advanced as the introduction of metal was to our ancient ancestors. Combining the disciplines we already know about business principles with these opportunities just might make the future as exciting and rewarding as our wildest dreams!