The future of digital landscape in Indonesia
Many said that technology will disrupt most of the industries in the world within the next few years. Even in one of the interview, Daimler Benz, CEO of Mercedes Benz mentioned how technology can disrupt most of all industries from transport, medical, even law.
But is it true? does that mean technology industry will rule over everything? or is it technology is not actually a stand-alone industry whereas it can be immersed to other industries?
“Apparently, many company failure is caused by not adapting to the latest technological landscape, whereas they fail to transform their company digitally.”
Digital Transformation
Within these past few years, the term of “Digital Transformation” has been overused by many companies. They mentioned that they want to digitally transform their company by creating a mobile app or website.
But only few, who really did digitally transform. The bigger picture of digital transformation itself is to follow what is customers’ needs. And many of the local players in Indonesia, created their mobile app and website, hence, the impact is not that significant. Why is that so?
Because they have failed to read the behavioral shift from customers, they fail to innovate
7 Eleven has failed in Indonesia
7 Eleven in Indonesia is such an interesting case. Its industries seems fine, even nowadays with the existence of GO-JEK and other on-demand services, it should be helping them to grow even bigger.
But that’s not it. In a nutshell, there are few reasonable aspects that causing 7 eleven’s failure, hence, the biggest reason is due to failure on getting investment from Charoen Pokphand.
Either it’s due political situation or other thing, nonetheless as the investor itself, It is also not wise to invest on 7 Eleven indonesia.
Looking at the figure, it shown that from 2014, 7 Eleven Indonesia suffers continuous revenue decrease from 2014 until 2016. And of course, decrease in revenue is not good, moreover, the cost remains the same.
Then comes to next questions;
“What makes 7 Eleven’s revenue going down steadily from 2014 to 2016?”
They failed to read the product life cycle
The fact that its revenue is decreasing down is caused by few reasons. The simple economic math in regards to revenue is;
Revenue = Units sold * Price per unit
The decrease or increase in revenue, most likely is an effect from increase or decrease from numbers of units sold or price per unit. Logically, price per unit is never been an issue since they have never reduced their price significantly.
Then the issue falls under numbers of units sold.
Looking at the graph, on the customer life cycle part, it explains how many customers or units sold within the time frame. Normally, when a product reach its top, they will eventually go down.
That’s why, Marketing focus needs to be able to capture that moment. When a product has penetrated into mass market, they need to innovate to tap in new customer demographic or geographic.
The case of 7 Eleven is they had failed to capture that moment, yes coming in into Indonesia by serving different type of convenience store is great. But if they didn’t innovate within few years, then customer will get bored and eventually will leave it anyway.
Then, what is ‘Customers needs’ ?
According to APJII’s report on 2014, in Indonesia alone, we had 34.9% internet penetration with 88.1 Millions Internet users out of 252.4 Millions citizens. And it increased into 132,7 Millions internet users in 2016.
Due to the rise of Internet era and its exponential penetration within past few years, what customers needs becoming more specific and customer pain point is changing as well, customer becomes more spoilt.
“Customer need any service or goods that is relatively cheap, reliable, accessible and convenient”
These four elements are what customers in digital era are looking for.
Relatively cheap
The concept of ‘premium’ or ‘luxury’ is not really important anymore for the avid digital users.
The reason why GO-JEK has a pretty huge growth is also due to its pricing strategy. For those who used GO-JEK and based in Jakarta circa June to July 2015, you do remember about “Ceban Ramadhan”, right? GO-JEK’s promo of Rp10,000 anywhere within 25km using GO-RIDE.
The reason why services like GO-JEK, Uber, Airbnb or any other big digital company can be cheaper than its incumbents competitor like Taxis or hotels is because of technological advancement.
Where they don’t really need to own an asset, running business with relatively low operational and capital expenditure, to give customers relatively cheaper price as well.
Technology should help companies to reduce unnecessary cost.
Reliable
Nowadays, digital footprint can be used for security and reliability too. By storing any activities safely on cloud, it can be used for extra layer of security for the user as well.
True that some user might consider their data is being violated and to be sold in a way by these digital companies. But why does that matter?
These data can help you to make a better buying decision, can give you more relevant insights and interest that is specifically crafted for you. And it can also help you should you have an emergency situations.
Accessible
No doubt that the best service or goods is that is accessible within few seconds reach from your hand. Which is anything should be accessible from any handled device, be it smartphone or any kind of IoT (Internet of Things).
The idea of having 3d printer is to be able to be used for anyone, too. Imagine to live in an era where you don’t need to get out and wait to get a shoes that you want. You can just buy the blueprint and design, and then print it on your own.
Actually, Shoetopia had started it.
If you want to conquer the market, make sure that your product or service is easily accessible anytime, anywhere.
Convenient
When the world is moving faster and faster each day, users expectation is also becoming higher.
Remember that day when people only use postcard to communicate overseas? Then come telegram, pages, landline phone, and handphone.
During postcard era, people don’t mind to wait few weeks for its response, but now? when you need an immediate response, whatsapp and gmail is your best allies.
It is important for every business to be responsive, most of the services now needs to be an on-demand service like transportation, food, and soon medical needs to be on-demand too.
Reading this article for quite a while now, leads us all ends into one big questions, right?
How to innovate according customers’ needs?
In the end, each companies, organizations, or any kind of entity, needs to be adaptable digitally. Because now we’re living in an era where digital rules almost everything.
We need to be adaptable and able to provide a services or goods that is relatively cheap, reliable, accessible and convenient for the customers.
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