Digital Disruption
Digital disruption is the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services. The rapid increase in the use of mobile devices for personal use and work, a shift sometimes referred to as the computerization of IT, has increased the potential for digital disruption across many industries.
Examples of digital disruption
A few examples of digital disruption include:
- The digital camera business disrupted the industry of film photography and photo processing.
- The subscription economy business model, as used by companies like Amazon, Hulu and Netflix, caused a disruption within the media and entertainment industries by changing how content is accessed by customers and monetized by advertisers.
- Freemium products, such as Spotify, Linkedin or Dropbox, that allow users to sample a basic product with the option to pay for the full offer, put more emphasis on developing a well-known brand behind a product or service.
- On-demand services, like Uber, have disrupted more traditional services like taxis.
- The rise of electronic reading has redefined the print and publication industry.
Importance of digital disruption
It is important for organizations to embrace digital disruption in order to gain a competitive advantage. When an industry experiences digital disruption, it typically signals that consumer needs are shifting. Therefore, understanding the disruption allows companies to keep existing customers happy as well as create opportunities for new customers. It also gives companies a better idea of human behavior and how trends may occur over time. A few best practices to follow that ensure digital disruptions are more of an opportunity than a threat are:
- Pursue initiatives that might cause a disruption, do not be afraid to be the disruptor.
- Consolidate data assets and use them to make decisions.
- Brainstorm ideas for entirely unique products, services or channels.
- Employ customer data in new, innovative ways.