Innovation is no longer “optional.” What matters is how quickly organizations arrive at accepting shifts in business models, technology, and digital platforms. Some have been slow to adopt—and have suffered the consequences.
In some consumers’ eyes, innovation is responsible for the imbalance. Should it be stymied because of that attitude? And, should technology be reined in because there’s a disparity between visionary business leaders and those who are sluggish to evolve? These issues were recently discussed between Tom Furphy and Kevin Coupe in The Innovation Conversation, which is an exploration of the fast-changing, technology-driven retail landscape and how business and consumers are affected.
Innovation Is Not a Zero-Sum Game
A great example of consumer ambivalence towards technological advancements, illuminated even more by the COVID-19 pandemic, is the “perceived” contrast between Amazon’s record profits and the bankruptcies of well-known retailers like J.C. Penny and J. Crew. Another is the swell of Netflix subscribers versus movie theater closures across the country.
If taken as fact, critics are mistakenly assuming a zero-sum game scenario. The boom of one does not correlate to the collapse of the other.
“The anti-competitive Amazon argument has always irked me. They [Amazon] have just had a better vision for the customer. They had better focus on the customer. They had better realization of where technology is going; that you could build a better business model—and they did. And now they’re getting the benefits,” states Tom Furphy, former Amazon Vice President of Consumables and Amazon Fresh, and current CEO and Managing Director of Consumer Equity Partners as well as CEO of Replenium.
In truth, Amazon’s place in ecommerce retail is still mid-level compared to overall retail. Certainly, Amazon is focusing on continued growth in the retail sphere. But it’s misguided to think the company is in a position of “super dominance” simply because it has successfully leveraged forward-thinking technological strategies.
Why Is Tech the “Bad Guy”?
Consumers have expressed their mistrust of digital technology’s many applications. An increasing number have also come to resent them. The “Big 4,” Google, Facebook, Amazon, and Apple, are routinely called out for abusing their technological prowess—an argument supported, in part, by The Social Dilemma.
A wildly popular pick on Netflix, this documentary revealed insights from influential players in the tech world and extended a thorough explanation of how companies create and use algorithms to their betterment; not necessarily keeping the consumer’s best interests in mind. It’s definitely a warranted discussion, but it’s not as cut and dry as it may appear.
Companies need to do a much better job at explaining to consumers why technology serves everyone. “If you are going to adapt technology to help your business model, it is incumbent on you to explain the consumer benefit,” cautions Kevin Coupe, of Morning News Beat.
It’s also critical to be sensitive to consumers’ resentment and potential annoyance—a common result of misguided retargeting efforts. If you start to overwhelm or inundate consumers with product suggestions, they will rightfully start to feel exploited. And, there’s no rule saying companies can’t be openly transparent about how they use consumer data.
“There definitely has to be some education. It’s really important to get out in front of the customer and provide the customer visibility and control,” notes Furphy.
Limited Broadband Access Fosters Consumer Inequality
Before critics chastise technology’s place within the consumer experience, or the U.S. government’s legitimacy to intervene with regulations like Section 230 of the Communications Decency Act, there needs to be ubiquity among users. In the U.S., 42 million Americans still lack access to broadband. This not only puts those individuals at a competitive disadvantage in terms of education and life opportunities, but it limits the nation’s competitiveness as well.
All things considered, that must be at least be part of the conversation when contemplating the stimulate/stifle innovation argument.
Innovation Can’t Live in a Bubble
Innovation should not exist solely for the sake of innovation. Companies working to advance their capabilities and their potential must also include the value to the consumer in their pursuits. Otherwise, the rising consumer outrage will tip the stimulate/stifle scales deeply in the wrong direction.
Watch for future Innovation Conversations between Kevin Coupe and Tom Furphy by subscribing to the Morning News Beat YouTube Channel.