[In-Depth Look] Customers Are Changing the Business Map

Dongchul Kim, Ph.D. in Engineering · Advisor at Bespin Global

The advancement of technology has changed the world. This is a fact. Will it continue to do so in the future? No one can guarantee it. However, new discoveries and innovative technologies will continuously emerge, and the world is already accustomed to this trend. Unless continuous development halts for a while or a sudden drastic change occurs, the current wave of change is considered natural.

Thales S. Teixeira, a professor at Harvard Business School and an expert in digital marketing and e-commerce, systematically described new changes in his recent book Decoupling (2019). The customer value chain consists of evaluating, choosing, purchasing, and consuming, which traditionally have been recognized as a single process. However, due to technological advancements and social changes, these four actions are being separated, and it is argued that this separation is triggered not by competitors but by the consumers themselves.

In offline stores, customers browse electronic products, then search for information on price comparison sites, and finally purchase from the lowest-priced e-commerce site. This behavior is called showrooming, where choosing and purchasing are separated. Review sites on social media play a disruptive role by separating evaluating and choosing. Also, ordered items can now be picked up at nearby convenience stores, which is a disruptive role played by existing convenience stores between purchasing and consuming. Various sharing economy activities, such as shared cars, are also results of separating owning and consuming.

If technology and processes change and consumers are armed with collective intelligence, companies must change accordingly or even more to survive. Best Buy, an offline retailer in the U.S., used every means to maintain the status quo to prevent losing customers to Amazon but eventually made a very different decision. They met Samsung and agreed to create a paid exclusive showroom for Samsung products, which wanted to enter and pioneer the U.S. market. Ultimately, Best Buy signed similar contracts with other companies and succeeded in a radical transformation from an offline retailer to a specialized operator of exhibition malls. This will not remain just a case from another country.

What do people do when they want coffee amid their busy schedules? Starbucks increased customer loyalty by allowing customers to choose and order in advance through a mobile app. Not stopping there, they now even provide delivery services to customers’ locations. They are proactively and aggressively defending so that the customer value chain is not broken by competitors.

With the addition of fintech technology and the power of social networks, a synergy transcending time and space has occurred. By adding cake to coffee gift cards, it has become easy to express gratitude to appreciated people. This marketing insight recognizes that people do not hesitate to spend money when giving gifts. Starbucks’ main product, coffee, remains the same in taste, but by improving processes centered on customers, sales continue to increase. This is a vivid example of the power of digital. Mobile and IT attract customers. Protecting customers’ value chains from competitors now requires a higher-level customer-centric mindset beyond product innovation. It is clear that a company’s future depends on the extent to which it utilizes new technology infrastructure and understands its customers.

This content was produced with the assistance of AI translation services.