In a rapidly changing world, businesses in any field are also shifting promptly towards digitalization. If a traditional business owner is stubborn and refuses to try the digital potential of his business, the business is going to decline, while digitalized solutions promote companies in the market, which is well illustrated by Amazon.
Let me take a clothing store as an example. As long as the store remains offline, there is a limited number of potential customers (only the local ones). If the same shop launches an online store while keeping the physical one, the potential customers would be the whole country and even the whole world.
A digital business model uses modern technology and the Internet to improve the overall results of the business by changing the way they operate (from the product to customer relationship). The most popular companies in the world have a digital business model (Amazon, Facebook, Ebay, Alibaba, Netflix, Aribnb, etc). There is still place to grow because, surprisingly, there are only three online businesses in the top 50 companies in the world (Fortune).
Amazon
My all-time favorite company with a digital business model is Amazon. Amazon started as a bookstore 27 years ago and became the largest marketplace on earth (Cuofano). Amazon’s digital business model is based on the company’s online store. They expanded to physical stores also and put a great deal of time and money into services area but over 60% form overall revenue still comes from the online store.
Amazon is the perfect example of how a company can use digital technology to maximize the potential of the company due to their customer-oriented approach. Jeff Bezos’s vision since he founded the company was to do everything humanly possible to improve customer service. After only five years of existence they had over 3000 employees and over 4 million square feet of distribution service and distribution centers all over the country for the products to reach the customer as soon as possible (CNBC) Bezos wanted to sell everything to everyone, and he did it. In the first 30 days of their existence, Amazon sold books in over 40 countries (this is how you start a company).
Amazon never stopes trying new things and new technologies. I will give you two examples to illustrate that:
- Block View
Amazon launched a search engine called A9 back in 2004. The search engine team started a project called Block View, where they would introduce photographs of stores and restaurants from 20 major cities into their A9 search engine. The project was yet unsuccessful and, one year later, Google launched street view (Stone).
- Prime Air
In 2014, Jeff Bezos stated that Amazon will deliver with drones. Back then people might laugh at him but now this is a reality. Prime Air delivers products using drones (Hartmans).
These are only two examples in order to demonstrate Amazon’s success recipe. They use digital technology (and not only) to be ahead of time. In addition, they are never satisfied and they are constantly looking for new ways to get customer satisfaction to a whole new level.
Examples of shifting to a digital business model
I can’t think of any type of business where you can’t use digital technology to help grow and improve the enterprise. Let me provide some examples of what you can do in a traditional business in order to switch to a digital business model:
Car repair shop
- build a professional website where you explain everything you do and market your services
- get a blog where you write about the most usual and unusual car problems that you handled
- start a YouTube channel where you post videos with explanations of different cars being repaired
Clothing store
- have an expert design an online store that will perfectly reflect what your business is about
- start a blog where you talk about fashion and suggest clothing combinations from your online store
- use Instagram to take some awesome pictures of your clothes and promote the business to the younger segments of the customers
Watch repair service
- get Instagram account and put some effort into marketing your services there (an Instagram account with pictures and short videos of watches and their mechanism would go viral in an instant)
- start a YouTube channel where you explain how to solve the most common problems with watches
- start a blog where you rank watches by their quality, durability, etc. with proper explanations
All businesses need to go online and have a digital business model. We have seen how Amazon used digital technology to continuously improve their business and how you can switch to a digital business model from a traditional one by their incredible example.
You need to think big and, in our times, the sky is not the limit anymore. When starting a company, one needs to think on a global scale form the day one. There are thousands of new opportunities every day, you just have to take one and make it your lifetime experience.
Reference
CNBC. Jeff Bezos in 1999 On Amazon’s Plans Before the Dotcom Crash. YouTube, CNBC, 8 Feb. 2019, http://www.youtube.com/watch?v=GltlJO56S1g. Accessed 4 Mar. 2020.
Cuofano, Gennaro. “How Amazon Makes Money: Amazon Business Model in a Nutshell.” FourWeekMBA, 28 Nov. 2019, fourweekmba.com/amazon-business-model/. Accessed 4 Mar. 2020.
“Fortune 500.” Fortune, 3 Mar. 2020, fortune.com/fortune500/.
Hartmans, Avery. “15 Fascinating Facts You Probably Didn’t Know about Amazon.” Business Insider, 17 June 2019, http://www.businessinsider.com/jeff-bezos-amazon-history-facts-2017-4. Accessed 4 Mar. 2020.
Stone, Brad. The Everything Store: Jeff Bezos and the Age of Amazon. Brown and Company, 2018.
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