Over the past 18 months I’ve facilitated six “2020 Visioning Sessions” for a wide array of organisations: the ANZ arm of a global media company, a major international airport, the ANZ arm of a global entertainment company, a 600-store retail chain and a two not-for-profits, one with the Governor General as its patron.
Although all the organisations operate in very different business sectors, there have been four very clear trends and themes that each leadership team distilled out of the full-day session – areas they themselves have seen as crucial to win in if they are to navigate their way through the “digital disruption” that each and every one of them faces. And the “double d” phrase, whilst appearing overused at times, is powerfully common in all their sectors.
Digital disruption is driving volumes in passenger, car, taxi and aircraft traffic at airports, readership in media, viewership in entertainment, foot fall into stores and charitable engagement and giving from work, school, home or in transit.
I was talking with a 60-something-year-old director of a large ASX company who said that five years ago they sat around a boardroom table predicting that “in five years’ time we will drop our employee numbers from 8,000 to 3,000 and our readership will go from 95% print to 50/50 print and digital”.
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And that’s exactly what has happened. She also went on to use a sporting analogy by saying: “This digital disruption is so disorientating that I don’t know if our industry is 20 minutes into the second half or 15 minutes into the third quarter. In fact at times we don’t know what shape the ball is!”
Although all the 82 executives who participated in the sessions are diverse in age, gender, location and nationality, the four key areas they all agreed need to be addressed are:
- Partnering: No one company can now deliver the range of technology, people, service, sourcing, speed, choice or productivity required to operate in our predominantly digital environment;
- Millennial behaviours: Millennials create and then adopt our new digital delivery models, and then lead older shoppers to this faster, easier and cheaper world;
- Innovation and reinvention: Irrespective of the age of a company, employee or owner, without the humility to accept the need to innovate or reinvent, it is simply not possible to survive, let alone thrive, in the new digital world. In each of the sessions the two mind states that allowed this to be accepted was either that of a “burning platform” or a “burning ambition” – burning desire to survive or a burning desire to grow; and
- Technology in all things: Nobody has a technological panacea but all executives accepted that Millennial companies, those that have come of age since 2000, have the most relevant and productive technology models. Those with legacy systems can’t just change them overnight, but need to create the vision of delivery, audit the current and then build out new technologies.
What this means for retail
National Australia Bank’s latest Online Retail Sales Index, published last week, reinforces this view. It showed a total of $20 billion in value of online products and services is being bought by online Australian shoppers. That’s up 13.5% year-on-year.
The most urbanised states have time-poor shoppers who have embraced all things digital with ease, with New South Wales commanding the largest portion at 35%, and Victoria at 23% of total national online sales value.
Buying local in Aussie dollars dominates, with 81% of total online sales in June via Australian sites and businesses. Domestic online sales growth remains almost 20 times faster than international sales growth at 16.9% Australian to 0.9% international, as the low Aussie dollar helps all sizes of local businesses.
It’s not just the big ones. Smaller online retailers, with sales less than $2.5 million a year, made up around a third of all online retail sales in the year to June, which is 20% higher than a year ago.
The core Millennials and XYs, those between 35 and 44, lead our online sales volume, giving confidence to the following 45 to 54 age bracket who were the fastest adopters. This reinforces the observation that good shopping experiences are created by the young and then given to the old.
A line in a table in the NAB report highlighted just how young that 60-something ASX director was in her mind state five years ago. Year-on-year growth in online media consumption grew 23.3% and now accounts for 16.5% of all online sales value.
It’s the Millennials who demand digital disruption, but psychologically young, if chronologically older, directors can deliver it to them.