'Disruption' is one of those phrases, isn't it? An annoying buzzword that's already entered into cliché. A word that makes you want to switch off. But however grating the term, the big digital disruptors of the day are transforming how we live and work.
Shaking it all up
These 'new kids on the block' are shaking everything up. The world's largest taxi firm (Uber) owns no cars, the world's most popular media owner (Facebook) creates no content and the world's largest accommodation provider (AirBnB) owns no properties.
Simply put, these companies have taken a different view on how to do things and have used new technologies to turn their industries upside down.
Take Brolly, a personal insurance concierge that uses AI to automate the advice a customer would traditionally receive from an insurance broker. By removing the broker from the process, Brolly has completely transformed the business model for insurance - one that is now founded on protecting the customer rather than the traditional transaction model of assumed 'shared risk'.
What people want
In one sense, disruptors don't do anything markedly different to other businesses. They find out what their customers want and they give it to them. But disruptors are strongly characterised by what they offer and the way they offer it. Instead of offering tangible assets (clothes, cars, breakfast cereals), they have shifted towards intangible asset value.
Fitbit's range of wearable fitness trackers, for example, may be tangible but the true value of (wellbeing, simplification, the motivation to do another 30 minutes when your body's telling you to lie in a darkened room) is not.
In other words, the essential principles of knowing a customer and keeping them at the heart of a business model have not changed. What has changed is how quickly customer demands grow and shift, the pace of technological advancement, the complexity of the customer journey and the speed at which new, disruptive brands can swoop in to respond.
How to disrupt
Amaze conducted a study of some of the most well known and well established digital disrupters including Airbnb and Netflix.
To find out how they disrupted things so successfully, we reviewed each company's operational timeline, looking at data trends (in terms of search interest, paid and organic search visibility, upstream and downstream traffic and social media) surrounding key milestones such as website launches, relaunches, major investment announcements, acquisitions and partnerships. This is what we found:
Doing things differently
• Disruptors remove friction: We found a strong correlation between the company events of Netflix and Airbnb and search interest (brand awareness) over time. More specifically, events or actions that centred on the removal of friction - such as acquisitions to support expansion of services, improving the consistency of experiences, app launches and investments in digital experiences - led to the greatest spikes in search interest.
• Disruptors respond to negativity/adversity by the well-timed offering of something new: Our study showed that removing friction alone was not enough to guarantee success for the disruptor. The timing of actions was a key element. The most successful organisations were those that reacted to negative events with the launch of new products, services or initiatives that would remove friction for customers in the future.
• Disruptors save their customers time: Of the 30 elements of value identified by HBR mentioned above, time was one of the basic elements at the foot of the hierarchy. It's notable that, whatever else they deliver, the enhancements our disruptors make save their customers time.
Spotting the opportunity
Our findings reveal that:
• Uber attacked wasted time by reducing effort getting in and out of a taxi
• Netflix saved customers time by moving from a DVD postal service to a streaming model
• Amazon saved customers time with unlimited next day delivery. As a result, Prime captured 40% of the US consumer market
• And Google's business model is centred around time, delivering search results in milliseconds, not seconds.
It's simple really
How do these characteristics manifest themselves? Take Carwow, an automotive disruptor flipping the new car buying process on its head. Founded in 2013, Carwow's 'dating website for car dealers' connects dealers and buyers and removes any complexity from the customer's search for a new car.
"Buying a car was a painful process and they [consumers] never knew if they were getting a good deal or not...people don't like to argue over money and they've simply got no idea where to start or whether the price they end up with is the best price they could have achieved" claims James Hind, Carwow's founder.
This really sums things up and based on our research we've distilled the characteristics of disruptors into a simple value equation: reducing time by removing value friction leads to an increase in value, in other words:
For those brands that truly understand what their customers want and make getting it simple, the reward is high. In 2013, 41% of consumers stated that they were willing to pay more for simpler experiences. In 2016, this figure rose to 64% of consumers (source: Global Simplicity Index, 2016).
As with so many things, Apple leads the way here. First with music, then apps and games, now with health, wellbeing and payments, Apple is engineering experiences that are embedded across customers' everyday lives.
The challenge for everyone else is to do likewise.
To find out more about digital disruptors read our new white paper 'Survival of the slickest'.