We are in the midst of a major technology revolution. Digital now dominates every sector of the economy: it is reshaping industries, disrupting businesses and introducing new operating models. It is also opening up new opportunities to create jobs and boost economic growth. Innovation is important for a company to stay relevant and thriving; successful companies are continuously improving and innovating so that they future-proof their business and continue to profit.
Many businesses today are reluctant to take bold steps in the face of innovation, new trends or challenges. Soon, these businesses will be vulnerable to more forward-thinking and innovative competitors. Those who embrace innovation are most likely to ride the wave of digital disruption, and they may even have the opportunity to lead in their industries.
In recent years Blockbuster has become so synonymous with a failure to adapt that it’s easy to forget how successful this household name once was. The video rental chain survived the transition from VHS to DVD just fine but then failed to adapt to the next big change – digital.
Blockbuster’s profits were disproportionately based on charging their customers late fees and this proved to be the fatal flaw in their business model. This way of operating was fine when they had a monopoly on the video rental service; their customers just had to put up with it. But when more forgiving alternatives came along, namely home-delivery rental services such as Lovefilm and Netflix, customers jumped at the chance to avoid being constantly penalised.
By failing to innovate digitally, the business with its high rental retail outlets and overheads started to lose ground to the DVD postal services and early stage streaming services that were coming to market. This was then compounded when they famously turned down the chance to buy the fledgling company Netflix for just $50 million in 2000. By refusing to acknowledge that on-demand streaming would replace video rental, Blockbuster tied themselves to a sinking ship. Blockbuster went bankrupt in 2010 and Netflix is now a $28 billion dollar company.
The lesson is clear: innovation is the key to survival and ignore a market disrupting technology at your peril. Whether it’s disruptors such as Netflix applying old technology in a new way, or a company turning an industry completely on its head with never-seen-before technology, companies that recognise the power of now and take new technology on board are more likely to see longevity and success.
Property, much like finance, is an industry not exactly known for its agility but the tide is beginning to turn, namely due to innovations in PropTech. Virtually every part of the industry is set for change as PropTech gains momentum. Approximately US $6 billion in venture capital has been invested globally in PropTech since 2011, and about 70 percent was in the last two years. The volume of Proptech financing globally has been on a steady increase, rising 36% year on year.
Consumers today expect instant access to information online and customer support, but the property world has so far been slow to adapt to new technologies providing such access and product visibility. A recent HSBC study found that 93% of UK home buyers are using online channels to research their property search, ahead of the global average of 83%, indicating that consumers are more than ready for modernisation of the industry.
While companies that are now optimising PropTech must be commended, there’s still a long way to go in terms of the property industry effectively communicating developments off-plan to home buyers. Likewise, producing engaging collateral that helps sales teams sell the actual product is another area that requires progression and this is the driving force behind Pixel’s development of its Selector Systems.