Disintermediate, Disintermediate

February 22nd, 2005

We all remember Dr Who right? And his never-ending batttle with those darstardly Daleks – hell bent on ruling the world. The Daleks would whizz around screaming at high pitch, "exterminate exterminate" – but for todays businesses the word is, disintermediate – then comes extinction.

For example, The Financial Times reported 7th February 2000 that Amazon, Tesco, MSN and Channel 4 have all entered the online DVD rental business which has grown from nothing to 10% of the total rental market in a very short space of time.
Implications – will Blockbuster lose its real estate to a virtual world of unlimited capacity? Probably. It is all about convenience for customers and creating added value. Living our complicated lives as customers we will always thank someone for making it feel at least a little simpler. Why go down the shops when I can get it on the internet, with more choice, and its cheaper?
Why would I want to go into a retail store which I don't really enjoy because its not a great experience, when I could go online do my shopping in half the time to have more time for the kids, my yoga class or whatever?
To that point internet sales overall were up 20% this Christmas, whilst British Retailers recorded a very bad trading year.

And though cost cutting may bring some solace it will not create the differentiation that is required.
Quite often we see technology moving into obsolesence very quickly, whilst business models remain unaffected. This is no longer true, we have arrived a moment where many business models are ripe for innovation or disintermediation depending on which choices businesses decide to make.

Bookmarks: