How can internet companies improve value capture and grow their market share?

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The barrier of entry to starting an internet-based business is at an all-time low, and combined with the ease of reaching customer globally, it is no wonder over 500,000 new companies are born every month. How can these Internet-based companies differentiate themselves from the rest? How can they retain their competitive advantage with zero barriers to entry? How can they connect more with customers they have never met? Here are three key strategies that fully digital businesses can invest in to grow their market share: 1. Focus on improving end to end customer experience with technology investments throughout the customer journeyWhen buying any product online, Millennials and Gen Z look for brand ‘value’, endorsement from peers and influencers, and immersive experiences. Companies have achieved ~26% higher gross margin than peers with better customer experience. When customers are emotionally engaged in their interactions with brands online, there is 3x more referrals. Today, emerging technology like AI, machine learning, IoT, and AR are more than just buzzwords – they can be a true differentiator. In fact, Millennials and Gen Z are 2X more excited by Augmented / Virtual Reality experiences while shopping. More and more companies are investing in tools and technologies to personalize experiences, predict behaviors and improve engagement. For example, Google Photos provide photo storage with machine learning based photo tagging, text / object search and facial recognition. This technology not only benefits the customer in searching for photos, but gives companies a library of data to “learn” customer habits for targeted advertisements. E-commerce companies have also started investing in augmented reality (AR) to bring their products to life in the customer’s own home and provide product demoes from even thousands of miles away. The use of artificial intelligence as “chat bots” can also improve a customer’s experience even after a sale is completed; providing customer support 24/7 without supervision. 2. Invest in a physical presence for a “creative” and “inspirational” experienceEvery generation values omni-channel options – research shows advertising and branding value generated from flagship “experience” stores outweighs the investments in digital marketing. While digital companies may think brick and mortar defeats the purpose of a low capital investment business, they fail to see the shift in function for a physical store. A physical store is more than just a point of sale, they are “experience hubs” that expand brand visibility exponentially. Previously digital-only giants, like Amazon and Microsoft, are now heavily investing in physical stores as a way to showcase their new products and technologies. It would be near impossible to demo the full experience of their offerings to customers through just an online presence. Additionally, the experience approach significantly improves customer engagement through triggering impulse buys and upsells. Customers can now leave with zero buyer’s remorse having tested and experienced the product in its entirety. Brick and mortar is not going away—it is just evolving. The key is to find the opportune time and channel options to explore. Decision on channel option should be driven by needs and expectations of target customer segment. 3. Digitize backend capabilities to improve delivery performanceAs previously mentioned, emerging technology can vastly improve a customer’s shopping experience, however, it can also completely advance a company’s operations. Many manufacturers are enabling predictive analytics in their production process through cloud-based Internet of Things (IoT) architecture. Implementing IoT sensors across an entire supply chain has proven to improve product quality and production times through automated health monitoring and troubleshooting. End-of-line cobots & digital-enhanced workforce, along with digital simulators can simplify and improve testing and quality control of products.When it comes to sourcing, companies are now utilizing blockchain technology to ensure authenticity and quality of raw material delivered. Digital production capabilities can enable ~1-3% improvement in gross margin impact and an additive 5-10% asset productivity and cycle time improvement.Even beyond production and logistics, digital marketing has seen a large increase in leveraging new technologies. Built-in predictive analytics in e-commerce tools, like Shopify, can help to draw insights from e-commerce data that is collected from their store and utilize the information to make effective marketing strategies, determine recommendations and promotions, improvise business intelligence strategies. Data and analytics can prove to be an effective backbone in improving the overall operational performance of any internet based company.{ "@context": "http://schema.org/", "@type":"QAPage", "mainEntity": { "@type": "Question", "name":"How can internet companies improve value capture and grow their market share?", "text":"How can internet companies improve value capture and grow their market share?", "answerCount":"1", "upvoteCount":"10", "dateCreated":" 2020/03/17", "author": { "@type": "Person", "name": "Ben T. Smith IV" }, "acceptedAnswer": { "@type": "Answer", "text": "The barrier of entry to starting an internet-based business is at an all-time low, and combined with the ease of reaching customer globally, it is no wonder over 500,000 new companies are born every month. How can these Internet-based companies differentiate themselves from the rest? How can they retain their competitive advantage with zero barriers to entry? How can they connect more with customers they have never met? Here are three key strategies that fully digital businesses can invest in to grow their market share: 1. Focus on improving end to end customer experience with technology investments throughout the customer journey When buying any product online, Millennials and Gen Z look for brand ‘value’, endorsement from peers and influencers, and immersive experiences. Companies have achieved ~26% higher gross margin than peers with better customer experience. When customers are emotionally engaged in their interactions with brands online, there is 3x more referrals. Today, emerging technology like AI, machine learning, IoT, and AR are more than just buzzwords – they can be a true differentiator. In fact, Millennials and Gen Z are 2X more excited by Augmented / Virtual Reality experiences while shopping. More and more companies are investing in tools and technologies to personalize experiences, predict behaviors and improve engagement. For example, Google Photos provide photo storage with machine learning based photo tagging, text / object search and facial recognition. This technology not only benefits the customer in searching for photos, but gives companies a library of data to “learn” customer habits for targeted advertisements. E-commerce companies have also started investing in augmented reality (AR) to bring their products to life in the customer’s own home and provide product demoes from even thousands of miles away. The use of artificial intelligence as “chat bots” can also improve a customer’s experience even after a sale is completed; providing customer support 24/7 without supervision. 2. Invest in a physical presence for a “creative” and “inspirational” experience Every generation values omni-channel options – research shows advertising and branding value generated from flagship “experience” stores outweighs the investments in digital marketing. While digital companies may think brick and mortar defeats the purpose of a low capital investment business, they fail to see the shift in function for a physical store. A physical store is more than just a point of sale, they are “experience hubs” that expand brand visibility exponentially. Previously digital-only giants, like Amazon and Microsoft, are now heavily investing in physical stores as a way to showcase their new products and technologies. It would be near impossible to demo the full experience of their offerings to customers through just an online presence. Additionally, the experience approach significantly improves customer engagement through triggering impulse buys and upsells. Customers can now leave with zero buyer’s remorse having tested and experienced the product in its entirety. Brick and mortar is not going away—it is just evolving. The key is to find the opportune time and channel options to explore. Decision on channel option should be driven by needs and expectations of target customer segment. 3. Digitize backend capabilities to improve delivery performance As previously mentioned, emerging technology can vastly improve a customer’s shopping experience, however, it can also completely advance a company’s operations. Many manufacturers are enabling predictive analytics in their production process through cloud-based Internet of Things (IoT) architecture. Implementing IoT sensors across an entire supply chain has proven to improve product quality and production times through automated health monitoring and troubleshooting. End-of-line cobots & digital-enhanced workforce, along with digital simulators can simplify and improve testing and quality control of products. When it comes to sourcing, companies are now utilizing blockchain technology to ensure authenticity and quality of raw material delivered. Digital production capabilities can enable ~1-3% improvement in gross margin impact and an additive 5-10% asset productivity and cycle time improvement. Even beyond production and logistics, digital marketing has seen a large increase in leveraging new technologies. Built-in predictive analytics in e-commerce tools, like Shopify, can help to draw insights from e-commerce data that is collected from their store and utilize the information to make effective marketing strategies, determine recommendations and promotions, improvise business intelligence strategies. Data and analytics can prove to be an effective backbone in improving the overall operational performance of any internet based company..", "dateCreated": "#qaAcceptDate", "upvoteCount": 1, "url": "https://www.kearney.com/web/answers/article/-/insights/how-can-internet-companies-improve-value-capture-and-grow-their-market-share", "author": { "@type": "Person", "name": "Ben T. Smith IV" } } } }