Digital Winners
What makes digital disruption both exciting and frightening is how it creates winners and losers across industries, often at terrifying speeds. Well-known brands that defined and led industries have floundered. Think of HMV, Woolworths, Kodak, Nokia, Debenhams or Top Shop. Creative destruction is fine as an economic theory; but it’s brutal when it destroys jobs and livelihoods. But innovation is also a force for good. It improves our lives, makes the impossible possible, and digital is doing just that across every industry. Many successes have emerged. Not just in technology (think Google, Apple or Microsoft), but in capital-intensive industries such as hospitality (Airbnb), logistics (Deliveroo), retail (Amazon) automotive (Tesla) and transportation (Uber). New entrants arrive every day. But equally, household-name brands from Disney and Vodafone to HSBC and BP are embracing digital, and setting out on ambitious transformation journeys. The speed of change and potential value creation stories are inspiring to follow, and to be part of. Here are just a few notable examples:
Entertainment
We all know the story of how Netflix turned the entertainment sector on its head in just a few years. But in late 2019, a long-established entertainment brand took Netflix on at its own game. Less than a year later, the Disney+ streaming service had almost 74 million subscribers, surpassing its five-year goal in just 11 months.15
FMCG
As consumers flocked to on-line retail, investors spent $1 billion buying up small merchants on Amazon, looking to become the digital answer to Unilever and P&G.16 How will the consumer products giants respond? Reckitt Benckiser announced plans to double-down on its ongoing digital transformation, by investing in ecommerce and direct-to-consumer channels, and forming partnerships to launch new ‘rocket brands’.
Financial Services
Much has been written about the fortunes of fintech firms. For every high-profile launch (Starling, Monzo, Lemonade), many start-ups have fizzled and faded. But look a little deeper, and you’ll find an industry being disrupted at scale. Companies like Stripe, Klarna, Apple Pay, Transferwise, Square and Xero are introducing new business models, stealing market share and generating serious returns. As they try to respond, high-street banks are finding their history and scale both a blessing and a curse. Their brand equity is strong, and their core assets are a huge advantage. But their agility frequently limited, as legacy cultures and infrastructures hold them back. Digitisation offers them much potential, but the path to get there isn’t an easy one.
Retail
There are obvious winners in retail, from Amazon to Shopify, BooHoo to Klarna. But there are many other success stories. Online supermarket Ocado reinvented itself as a technology business, with such striking success that it had to turn customers away during the pandemic. Its market value soared by 95% during 2020.
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