These weeks, I looked many papers about digital economy, and many people also write the blogs about that, today, I will focus on what I learned about the digital economy. maybe it is not very professional, but it is the real thought of me.
The core of digital transformation is using the newest techniques to do what you have done and make the result better [1]. However, what exactly is the digital economy?
It is the economic activities which are produced by billions of online connections between people, companies, data and processes every day. And the digital economy is taking shape and destroying the structure of companies, how companies interact, and how can customers get services, information of products and traditional concepts [1].
Like I saw the blog about Dominos’s, in the past, customers can just went to the Domino’s, if you want to eat there, then you can stay there for eating, if you want to eat at home, then you can take away by yourself. But now, you can just use a mobile phone and use your fingers just click several times, pizza will be sent to the door of your home, which is very convenience. More people will feel well to order online, which will exactly make the Domino’s get more profit.
In addition to these, digital economy can also have influence in many other aspects, like the vehicle sense data of trucks [2], which can combine the map data analysis to reduce the using of fuel and emission, and farmers can use the data of seeds, satellite or sensor to decide what to plant and how to accommodate the changing climate.
I think digital economy will very popular in the future, of course, it is already very popular now, but it is also in developing. Its future is unimaginable. Since, it is not only playing an important role in economy, but also in social, like it applies many positions, have good influence in the daily life of people.
And people can use digital finish many things, even those we cannot imagine, if one day the digital economy matures. I’m looking forward to it bringing us new experiences and lifestyles.
Twenty years ago, we can find almost everyone focused on their newspaper when they were waiting their metro or bus. But today, most people usually focused on their mobile phone [1].
But now the media industry has been killed by digital, particularly in publishing and newspapers, according to The Atlantic [1], the revenue of printing newspaper had a dynamic down from 60 billion dollars to 20 billion dollars.
For this phenomenon, the New York Times immediately implemented the corresponding measures to take the lead in transforming the numbers. Unlike other newspapers, hesitated about the digital transformation and did not take appropriate measures. The New York Times set up a department in 2011 and hired more than 100 technical staff in 2013, adding about 10% of non-news editorial staff. The New York Times’ digital transformation is a multi-faceted strategy. Most of the tasks are to improve the user experience of flagship products in news reports on the Internet, Android and iOS. In addition, they created a new department that launched three applications.
Many people said New York Times is winning at digital [2]. This point can be explained from five aspects.
Leveraging customer data to increase the subscription.
With the development of digital economy, many newspapers have reduced the number of printed papers, but now they are faced with the hope that more customers will subscribe to their electronic news. According to Boutros [2], the New York Times has become a data-oriented company. Based on the channel chosen by customers, the relationship with the times, and the specific situation of customers, the Times will consider what to do next to give customers a more meaningful experience and make them come back more frequently and get closer to subscriptions. At all stages of the customer, it can provide the information needed by the customer to arouse the customer’s resonance. This personalized data-driven sales channel is also very useful for digital businesses such as Google and Amazon. Which gives the NYT a chance to obvious and understand the trend of concern of their customers, which will bring them successed not only in digital, also in any kinds of sales.
2. A new mindset of agile product experimentation
It was mentioned previous, New York Times (NYT) has tried many methods to transform it to digital. so, the organization tried some new mindset to increase their customers. For this, the organization made many experiments around their product development, including new cooking and crosswords applications which have made significant contributions in increasing the customers for the subscription of New York Times. These fresh products emerged from an internal incubator group, named Beta, which has been charged with bringing to market a variety of new products. Although some applications of ideas many never have interest in NYT, but the opinion was so tightly coupled with the core news identity that we discovered that it really didn’t work as a standalone. Which means that, these applications can through many different areas to attract customers, not like traditional business models, this way can subtly influence customers from many aspects which they are interested in, and guide customers to subscribe
3. Intense leadership focus on digital
When the digital economy rises, many companies are putting their energy and money on the traditional business model, or investing in digitalization. However, NYT has taken a bold and future-oriented approach to this conundrum, which seems to be paying off. Although in that time the 2/3 of revenue of NYT was coming from printing subscription. I think NYT chose to transform in the short-term rise of this digital economy because they pay enough attention to this issue. According to Wilson that, the CEO Thompson of NYT formed an executive committee, which spent a lot of time and effort to discuss the company’s development direction from a digital perspective. In this 14-person committee, 13 people first considered digital technology. This approach enables nyt not only to take countermeasures in the face of the digital economy, but also to have the ability to fight against any change, because they can pay attention to every change in a timely manner.
4. Cross-silo collaboration on trust
The successful of transformation is not only because of the high attention in digital was taken by the leadership. If different departments did not collaborate effectively for the digital businesses, so no matter how strong the desire of the leader, this is impossible. According to Boutros and Wilson [2], nothing we can build of come true without the coordinate between different departments. And actually, Newsrooms used to operate independently, with little connection to other parties. But the executive editor Dean, who has brought an enormous cultural change in that regard, he opened up the newsroom to the business side, and allowed easy conversation between them. Which provides a non-negligible role in the transformation of NYT. This gives the organization a good opinion that nothing can exist without others, which is bound to have a great positive impact on the future development of NYT.
5. A complete rebuild of technical stack
In addition to the aspects mentioned above, In order to really deliver a pleasant cross-platform experience for customers, NYT has to do the big system transformation that they are doing right now, and it’s very close to not having so many different technologies. From this, NYT has its own tools that can be based on the digital economy era.
So, actually, the transformation of NYT to digital gives the organization a experience to research, analysis and propose measures to the changes.
Ikea has a long history as a biggest furniture retails of the world. But, how does it respond and grow under this uncertain ecomonic development? let us review the develop history of Ikea [1].
1958: Ikea opens the first brand furniture store in Älmhult
1976: Ikea opens the first store in North America
1980: Ikea launches the koi-pan sofa
1987: In Warrington, the first Ikea British store opens
1998: first Ikea store opens in China
2000: First Ikea store opens in Russia
In these histories, Ikea also experienced many setbacks, but Ikea passed through difficult times by changing the operating model.
Nowadays, with the development of digital economy, Ikea as the biggest furniture retail of the world will also need to modify their operating model to accommodate the development.
In 2013, IKEA increased its sales and market share and was driven by its expanding online shopping. According to the August 2013 financial year [4], online sales increased by 29%, when IKEA UK retail manager Gillian Drakeford said that IKEA will continue to invest in online and physical store shopping channels,”
According to Jesper Brodin [2], the president and chief executive of Ikea Group, in the face of growing urbanization and the digital economy, IKEA needs to develop its business in a more flexible way, and this time the acquisition of TaskRabbit is a major leap in IKEA’s transformation, TaskRabbit has operations in more than 40 cities in the UK and the US, and IKEA can connect customers and merchants through its app, users tag the jobs or tasks they want, and staff can The ratio of choosing to work nearby or choosing to pay is large, depending on the staff member itself.
After that, Ikea has joined companies as John Lewis and Debenhams, which means Ikea see service as a development method.
Brodin said, many digital expertise will be learned from TaskRabbit, and at the same time, the acquisition can provide more methods to get service solutions which with flexible and right price.
This acquisition will take gig economy into Ikea, the staff of TaskRabbit are classified as individual subcontractor. they can according to their willings and rate set to choose work when they want, but they are not necessarily have the right to enjoy the minimum salary or the salary of holidays.
Excepting the method which is mentioned above, the UK boss of Ikea pushed a spin-off chain of kitchen and bedroom showrooms and Ikea Planning Studio, the first one was opened in the center of London, which provide the one to one consultation service for consumers, and this level of service typically will not appear in out-of-town warehouses. And these just parts of transformation of Ikea, and Ikea is still looking for other city center stores, they hope to open more stores like that and other formats of home furnishing accessories and a food offer and it is also representing the changes of business model for appealing to online shoppers [2].
IKEA’s sales growth in 2017 was much lower than the average of 7% in the previous five years [3]. In that year, IKEA’s profit in the UK fell by nearly 40% to 87 million pounds. The reason for this result is considered to be wage increases and the investment in online stores is too large, but Javier Quiñones [3], the national retail manager for the UK and Ireland, insists that the concern for high-street stores does not mean that IKEA wants to change its business model. What IKEA is doing is looking to the future and becoming the way customers want IKEA to be. Although most of the growth in sales is now in online, the sales of physical stores are also growing. According to data from the data firm Retail Economics, nearly 15 billion pounds of furniture and flooring market, the first turbulent meal situation has been reorganized, online sales this year will exceed 30%.
The furniture market and the real estate market are inseparable [3]. The recent real estate market is very bleak, and with the depreciation of the RMB in 2017, after the commercial interest rate has risen sharply, customers are controlling the beginning of life, because they need cash more, so they need cash. Many people go to rent a house instead of buying a house.
Familiar with the information of products, like: price, inventory.
Master the sales of the items, register the goods that are unsalable, balance the sales and inventory, and do the replenishment work.
Keep the hygiene of the ground objects and the placement of the countertops.
All sales staff must cooperate with each other to do the inventory work.
Solving the problems of customs.
The changes of salesperson:
Nowadays, with the development of digital economy, the online shopping platform has appeared and in a rising trend. A growing number of people are willing to shop online, since shopping online is very convenience, which do not need us to go outside in a freezing day or a hot day, we can just stay in home and sit in a chair, click our mouse, then we finished shopping, and the courier will send our products to our home, we just need to open the door, and we get our products. Of course, the salesperson can also help customs online, if they have any problems, such as refund or change products, the salesperson can chat with customs online.
The future trend of salesperson:
However, there are many people who are willing to physical shop because they can touch and check the product. However, in these years, unmanned supermarkets have emerged, although there are still many problems in these unmanned supermarkets. For example, there are few products in the supermarkets which with salespersons. And in the absence of salespersons, the price of goods has not decreased, and in unmanned supermarkets, there is no one person will solve your confusion. However, when these issues are resolved, the sales force industry may be more affected.
BEMM129 Digital Business Models 