THE NEW FACE OF TECHNOLOGY AND BUSINESSES THAT WILL STAND TALL.
Social Media, Electronic Commerce, Online payments are some phrases in every technology driven group or company. The other day, I was discussing technology with my friends at Co-Creation Hub an Incubation Center in Yaba, the technology hub of Lagos Nigeria. During our discussion, we x-rayed technology businesses that thrived in the last decade and where they are now. Remember PDA’s? Remember that trusty stylus? The once-awesome Palm Pilot had no chance with the advent of the Blackberry, and then, of course, the touch-screen smartphones.
The last thing you want to forget is Movie Rental Stores. The massive popularity of Netflix and Video-On-Demand has made it virtually unnecessary to go to an actual store to rent movies. Blockbuster one of America’s largest home movie and video game rental services felt it and today they only have 51 stores in the US out of over 2000 in the early 1980’s.
I remember always joining my dad to a phone booth in Aba, Abia state Nigeria to call my uncle who stays in Lagos. How about those who make calls and charge ₦20 for one minute? Obviously. even homeless people have cell phones today and those businesses are gone. More to it are those who sell recharge cards. Right from my phone I can recharge by dialing *901*AMT#, *909*AMT# or *894*AMT# or use tools such as quickteller for quick recharge.
Having highlighted big time businesses that went extinct due to Technological Advancement, the big question is, what strategies have your business put in place for the technological shift of the next decade? Because the more we think technology has exhausted its limit the more new and amazing things come up.
Let’s explore what’s in for some big players of the economy as technology grows.
Fast Moving Consumer Goods companies such as Unilever, Procter & Gamble and GSK, create and distribute products that are typically bought by consumers frequently (essentially they move from a retailer’s shelves to the consumer very quickly).With the current widespread and acceptance of E-commerce especially in Sub-Saharan Africa, imagine a situation where all the consumers have moved online and no longer buy from the retailers. More disturbing is the fact that the distributors, wholesalers and retailers of these FMCG companies have refused to go online because they still make their money in volumes as at today. On the side of the FMCG’s they have tried to drag their supply Chain team online, however there is bad news for them. Take for instance a Procter and Gamble with an online store that sells directly to consumers have only succeeded in blacklisting their supply chain (Distributors, Wholesalers, Retailers) which will invariably cause chaos and someone might be out of business soon. I hope they are not trying to blacklist their supply chain with the popular online store at P&G STORE. With this in mind, Procter and Gamble must come up with an Online Mall Solution that accommodates her supply chain.
Facebook , the world’s largest and most popular social media network in March 2015, unveiled a payment service through its messenger function. It allows Facebook users to send and receive money between friends in a secure way. Currently in the pilot phase with access offered only to a limited number of users, the service is expected to be available to all US-based users in coming months. Who said it will not penetrate all markets? Especially Sub Saharan Africa having lots of Emerging Markets.
Effectively, this new payment service from Facebook is similar to the ones available from existing service providers such as SnapCash, Google Wallet, Apple Pay and Venmo. These firms need to attract new users for the single, specific service they offer: automated payment.
The big game-changer is that Facebook already has a much larger, highly engaged, active user base according the report stated earlier. A group of friends out on a trip taking selfies and uploading to Facebook can now instantly share the cost of tickets/hotel accommodations/food without having to leave Facebook, or starting any other payment- specific app on their mobile phones.
This payment service will also promote more user engagement, as users won’t need to exit Facebook for any payment or purchase. This suggests that most businesses today that sell products or services on their websites will no longer thrive as much as they do today.
In July 2014, Facebook started testing the “BUY” button which allows users to directly purchase products available in their news feed. Last year, the social media giant also added a personal assistant called “M” to the standalone app, opened the app up to developers and added tools for chatting with businesses, peer-to-peer payments and voice and video-calling. Now, Messenger can also be used to get a ride #Uberfacebook. This means local businesses like Easy Taxi and Taxipixi have to be on their toes technology wise else they will soon be out of business with the penetration and wide spread of Uber.
The game changes completely when users have their card information stored on Facebook records. Temptation to buy will be higher when the transaction can be completed with just one tap/click, with the stored card in Facebook records. More importantly, upon stumbling on a “Buy ₦5,500 David Wej Shoe” in the news feed, a user will be substantially more confident about making the purchase through Facebook, if he has successfully sent ₦1,000 to a friend in the recent past. According to SproutSocial, an Average user Spends 40 minutes on Facebook.
Does this mean that Local payment processing businesses like Interswitch, Remita, Paga, PayWithCapture will run out of business in the nearest future? How about E-commerce giants like E-bay, Amazon, Aliexpress, Jumia, Konga ? Will they also be gasping for breath in the E-commerce space?
I was impressed in October last year when TechCabal reported that Interswitch, Africa’s leading digital payments and commerce provider, announced an integration of its Quickteller services with BlackBerry’s BBM. That was a move in the right direction and other local Payment Processing companies should learn from that.
Finally, in other not to run out of business due to technological advancements;
1. Existing Businesses should embrace online solutions and web business especially technology driven businesses and invest more in R&D, because that is the only way your company can generate an idea like Integrating Uber on Facebook messenger.
2. Create Platform Business Models not Pipes that only pushes out stuff. TV Channels work on Pipe Model but YouTube works on a platform model. Classrooms still work on Pipe model but Udemy, Skillshare and Coursera are turning on the Platform model for education.
3. Adopt a business model that is diversified. If Facebook with its advances in E-commerce Hijacks/dominates that space (E-commerce) today, giants like Amazon will not go out of business because Amazon Web Services (AWS) now accounts for around half of all cloud computing platform sales across the industry, according to RBC Capital Markets analysts.
4. E-commerce firms can adopt Gamification to increase user engagement. Naturally online users like to play games. I really admire the concept adopted by Google (The T-Rex Dinosaur game). When a user’s internet connection is lost while on the Chrome Browser. The T-Rex Dinosaur Game will run and your mission is to prevent it from bumping into the saguaros. Personally, that game has kept me glued to Google Chrome. You can implement the same concept on your website today and have users glued to your site. The longer they stay on your website the higher the probability of conversion. I am not saying that every web business should now build games, but I am saying that we should implement something special that will have users stay longer on our websites.
5. Examine whatever business you are doing currently and see if you have avoided doing new things probably because it wasn’t part of your. 100 page Business Plan which you wrote based assumed numbers. Mark Zuckerberg never thought he would be worth 35.7 billion USD as a result of all Facebook’s businesses including Facebook Ad’s when advertising agents on Bill Boards, magazines and News papers were all over the place.
I wish you the best of luck in your businesses and the courage to solve the chicken and egg problems with your business models. Wondering what chicken and egg problem is? Stay tuned on my wall, I will discuss the chicken and egg problem and discuss how it can be handled practically in another article. I will also discuss Platform Models, Pipes and Products.
