202. Un-Bundle To Re-Bundle New, Digital Business-Models

Digital Disruption Lessons

As consumers, we benefit from the digital disruption that continues to march through different verticals. (Newspapers, Movies, Music Albums, Travel Agents, Cars, Stock Trading, etc.) But, the unchanging, traditional, players died while we gained.

A common pattern: disruptors first unbundled old models, then they re-bundled, new digital models. By example, Apple let us cherry-pick our favorite songs for 99 cents. Flush the rest of the album’s songs along with the distribution channel for physical records.

Then, digital re-bundlers added more value with reduced “friction” for us. Pandora and Spotify allowed us to pick playlists streamed to all devices. The freemium deal played fewer songs more frequently with ads. The premium subscription model offers: all songs; no ads; and constant fine-tuning of the algorithm underlying our evolving channels.

B2B Distributors: Your Standard, Selling/Service Bundle is Now Under Attack by:

  1. Many millennial, B2B buyers who don’t want to see (or pay) for regular rep calls. They want, instead, a digital buying journey with virtual, people support as needed. Then, on-site, facetime if requested.
  2. Old-School Buyers may still want your existing model. But: a) are they generating enough margin dollars annually and per order to support facetime calls on a net-profitable basis? (Many aren’t!) b) How fast are they retiring? c) And, won’t they shop your prices against digital sellers and offer last-look to match? If you do, then your bundle-costs per order will exceed the margin dollars for a loss.
  3. Big, (consolidating?) customers are trending towards consolidating vendors. They want a lowest, total-cost, replenishment system. To co-create these solutions, do you have the pre-requisite: analytics; team skills; and digital-process tools?
  4. Key suppliers (in response to #1) need to engage end-users (your customers!) with digital content and best omnichannel buying journeys. Their distributors must then fit into a new, seamless, digital, channel model. Do you have the – shared vision; analytics; and collaborative skills – to proactively volunteer to be part of your suppliers’ (and customers’) new needs?
  5. And, selling small-customers, small-orders v Amazon Business is another blog.

Homework?

  1. See the converging, eCommerce factors that are upon you.
  2. Get cost-to-serve analytics to enable the design of new, profitable models.
  3. Rethink your sales force to fit into new models.
  4. How? Skim/dive into and discuss my 12, recorded webinars right here.
  5. Then, experiment and fail/learn forward to ecommerce 2023 models.

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