The digital tsunami that’s been around for the last ten years has disrupted lots of industries. Yesterday’s leaders have been disrupted by challengers or new comers and those who survived still fear for their lives.
I recently has the idea of listing the companies that passed away and crowded the “pre-digital dinosaurs cemetery”, those who missed the turn or did not even realize they had to make a turn.
The main causes of “death by digital” are….
It’s easy to list companies by the cause of their death.
• Lack of awareness : they did not see anything coming.
• Lack of vision : they saw something coming but underestimated its impact or did not make the right choices.
• Lack of execution : they saw, they made decisions, but poorly delivered on their plan.
Please not that in the two last cases we can wonder if digital is the real cause of their death. Seeing nothing coming and being disrupted is one thing, seeing something coming and react irrelevantly is another.
There’s also something fun : these are exactly the same causes as for any matter. Digital has nothing peculiar, it’s just a matter of judgement and strategy. As usual.
• Platform effect : in an industry impacted by the platforms economy there can only be one winner with one or two smaller challengers and maybe small regional players. So if one manages to adapt, the other will eventually die, no matter how good is their strategy. It’s only about speed.
Digital is a cemetery without coffins
So the only thing I had to do was to list the deceased and put them in the right column.
Once again, my focus is businesses that really disappeared, not those reinventing themselves. We know that’s its harder to transform (you have to run the current business while building the future) that to start from scratch so we can’t blame those spending time doing it.
And then I realised that building the list was not that easy. So I asked my network for help…and we did not progress that much.
Let’s start with the easy ones. Kodak. But, contrary to what many people think, Kodak was not killed by technology disruptions. They even were about the first to offer digital cameras, had many patents… Kodak was killed by two things : they underestimated the size of the wave and did not have the courage to get rid of their legacy network to build a new one to match how the market was moving. That said they recently made a move to cryptocurrencies and blockchain. Not bad for a walking dead.
Next ?
Virgin Megastore. No. If we consider that their decline started in the early 2000s, it was not caused by e-commerce. Their problem was strategic and structural. Maybe digital speeded their decline in the last years but they were already dead sick by their own fault.
FNAC (a french large tech retailer ) ? They’re still there and they even bought one of their biggest competitors. They still have to lot to do but I know lots of businesses that are doing worse than them.
Nokia ? Yeas and no. Huge sin of pride when they refused to work with Apple on the iPhone but then they succeeded at doing what’s peculiar to digitally mature businesses : pivot. They sold their dying phone division to Microsoft, bought Withings and a part of Alcatel-Lucent…
Travel agencies ? Yes ! The perfect victims of the platform effect and they’re only relevant for tailor-made premium travels.
Retailers ? Of course we have some cases but that’s not because they may be closing shops that they are dying. It’s even the contrary. Online only accounts for 9% of commerce transactions so there’s still a room for stores. What matter is synergies between stores and online, an experience worth the name etc. When Amazon buys Whole Foods it’s not the death of the retailer but an offensive strategy of the e-merchant that needs a physical network.
The ‘old’ like Yahoo!, AOL and likes ? I rather see a battle between historical digital players and new comers with a logic concentration move.
Press ? Ok for magazines. RIP Newsweek only to mention the most famous one. Daily presse ? It’s suffering, painfully transforming but does not die as fast as predicted.
Can old players become digital leaders ?
Car makers ? The 2007 crisis did more harm to them than Google did, they are at the leading edge of autonomous cars with and not against the tech giants that did not manage to replace them.
This makes me think of taxi companies.Did they suffer ? Yes. Did they transform ? Yes. For instance in France, G7 has nothing to do with what is was before Uber. More, while they were updating their customer experience they still were profitable while Uber is still loosing a lot of money and disappoints its clients and drivers. Who will still be alive in 2025 ? I have no idea but I’m sure that Uber is not invincible.
Hotels ? Marriott-Starwood, Hilton and IHG are doing well. Accorhotels admits that Airbnb kicked its backside and forced them to be more creative in terms of offering. It’s sure that Airbnb stole them some stays but there will always be people and trips for which Airbnb wil be irrelevant. I even think that Airbnb helped more people to travel and instead of stealing a part of the cake made the cake bigger and that some people who started to travel thanks to Airbnb will eventually use traditional hotels later.
In the end and surprisingly, the digital tsunami caused fewer deaths than we usually think. Takeovers, concentrations but very little net loss.
Even better : if some old businesses did suffer a lot (once again transforming is harder than starting from scratch) some are even close to play a major role in the future.
Surprising isn’t it ?
