Established brick and mortar business CEOs are entering uncharted waters with the digital marketing age and must decide how to approach the challenges involved. There are significant trends that redefine competition that CEOs must recognize and respond to quickly in order to stay relevant not only to potential customers and clients, but to business peers as well.
CEOs must make choices about how they will promote their product and services, how they will use the talent to grow their business, and how they can integrate their established business with the digital world that consumers increasingly use to make their buying decisions. CEOs must evaluate the options and make their decisions quickly in order to hit the ground running in a new, fast moving business world.
Let’s look at some of the decisions CEOs are dealing with to get a better understanding of how digital trends are changing the older, established business models.
Websites that compare prices change the way businesses sell.
Comparison websites allow online shoppers to review prices among competitors so they can find the price they are willing to pay for the product and services they need. Businesses must weigh their prices for various comparable price points in order to be competitive.
One simple example would be a sight for insurance that compares product packages and prices among several insurance companies, which allows potential customers to buy more products for less. The challenge of the business is to decide how much they can bring down their prices or how much product they can provide at certain price points in order to satisfy their profit margins.
Businesses must rearrange their strategy to compete with newer digital companies.
Smaller online companies have lower overhead costs that allow them to pay for the best digital talent. They can also focus or target their business on niche markets. Established brick and mortar businesses must figure out how to cut traditional jobs within the company and replace those jobs with digital talent. This is a touchy area because lay-offs or staff reductions can result in bad press or bad social media backlash.
The second choice is to decide which jobs to replace and how to get the best talent for the ones the keep. While some jobs can be done quite well by computers, there are still jobs that must be performed by humans. Most of those jobs are creative thinking jobs whose talent tends to be attracted to non-traditional business models. The CEO must deal with social reaction and internal business conditions in order to survive and ultimately succeed in a new digital business world.
Businesses must recognize changing shopping behaviors.
CEOs must think about how shoppers actually look for the products they want or need. Before the Internet, people simply opened up a phone book and “let their fingers do the walking” as they searched for something they needed nearby. Now, they use the Internet and type in a search term or search string and see what pops up. Shoppers are no longer limited to what they can get in a short drive across town. They can now shop, discuss and decide to buy what they need anywhere in the world.
Even businesses that started out online have had to rethink their business model in recognition of how shoppers behave. In recent years, shoppers have developed a strategy of “showcasing” at stores to see, touch, and experience a product before they go online to buy. Online businesses are recognizing this new behavior and reacting by establishing kiosks and small “sample” stores so that buyers would “showcase” with them and then go online to make their purchase with them. This is one way to keep customers throughout their process of making a purchasing decision.
Global shopping has change the international business model.
Without national borders that once limited how people shopped, CEOs must also decide how to market to different countries, and how to distribute and ultimately accept payments. Should they integrate with an established payment portal or own their own means to accept payments internationally? Should they have warehouses in other countries to handle distribution or is it less expensive to have a central distribution point and sent out purchases internationally.
These are just a few examples of how CEOs must rethink how they do business. The Internet has changed local marketing into a global market that changes how businesses relate to their customers. Each seemingly small choice can affect larger aspects of a business that can result in success or failure.