When we placed our first digital candidate in 2001, so confident were we that we took all of our fees in equity! None of the companies that we consulted for then survived the dotcom bubble. At that point, nearly two decades ago, Mark Zuckerberg was still in high school – he hadn’t yet come across the ‘face book’ at Harvard that would lead him to create an empire worth over US$300bn – and the research project of two PhD students at Stanford University, which now goes by the name of Google, was only five years old.
We all know that since then the world has changed considerably: sole brick-and-mortar traders have become omni-channel businesses, social media pages have taken over from magazines as the main purveyors of advertising space and content, and we don’t buy CDs anymore – instead we have the choice of Apple Music, Tidal or Spotify. We at The MBS Group have placed some of the most exciting candidates in the consumer-facing world who have turned businesses into exciting omni-channel and pureplay propositions that have kept pace with the ever-innovating digital world.
On the 14th May 2007, well into the development of ecommerce as a global standard, we held an event on the future of digital called ‘Virtually Yours: Living Life Online’, a panel discussion which I chaired featuring a number of digital experts, including Dennis Woodside, current COO of Dropbox; Nancy Cruickshank, now founder and CEO of Myshowcase.com; David Fischer, now at Crossover Capital; and Tom Savigar, trends director of The Future Laboratory. Looking back on our write up of the event it’s fascinating to see where we were up to and where we are today.
Here follows the write up of the event:
“By 2012, one of the main criteria to land a job as a FTSE 100 CEO will be online experience,” says Moira Benigson with a twinkle in her eye, as she warns all the CEOs in the audience to get a move on before they are left behind. Since the advent of the Internet, the dotcom bubble has grown, burst and grown massively again. The aim of this evening’s discussion is to hear from four experts at the forefront of the digital/online industry about what has happened since the dotcom bubble burst in 2000, why things are different now and what the future holds. The panel comprises Dennis Woodside, European Managing Director, Google; Nancy Cruickshank, CEO, Heart Digital; David Fischer, UK Managing Director, MySpace; and Tom Savigar, Trends Director of the Future Laboratory.
“When Bill Clinton became President of the United States in 1993, there were 50 registered websites in existence; 14 years on, there are over 100 million worldwide.”
It is clear that the Internet has taken on an importance that was unimaginable even a few years ago. Last year in the UK alone, consumers spent over £30bn online, a 57% increase on 2005. UK online advertising revenue now stands at more than £2bn per annum, which eclipses that spent by companies offline. In addition to transactional and informational web pages, the youth of today is using the web for blogging and community and social networking.
The first question to the panel: “What’s changed since 2000 and why are digital businesses now as successful as they are?” From the answers, it is clear that a lot is different – it is now a liquid, money-rich market, where businesses are, in the main, profitable with significant turnovers. The proliferation of broadband has enabled the population at large to participate and the hype and buzz around the Internet in the late twentieth century has been replaced with the figure of 1bn people online globally. When you have that large a community, communication is simpler, people can interact more easily, and that creates opportunities for all kinds of businesses. Crucially, the cost of creating a business has fallen to $2,000 for a set of servers and a good idea – a far cry from the millions of dollars spent by Boo.com.
Despite the fact that 38 out of the top 100 retailers in the UK still do not have transactional websites, ‘cross channelling,’ i.e. switching between on and offline channels in the buying process is of particular interest to the retail CEOs in the audience. Shoppers now try on a jacket but buy it online; you go into Borders to browse a book but buy it on Amazon. This offers multi-channel retailers the potential to target consumers more often by offering them multiple touchpoints.
“I want a MySpace; let’s just go and Google it’ – that kind of language is something you can’t manufacture, it only comes through a period of trial and error.”
Indira Thambiah, Head of Home Retail Group’s online business, in the audience, says that Argos, for example, no long distinguishes between on and offline stores, because for them they are the same thing: “We believe that customers want different things and make different journeys and the same customer will make a different journey and behave differently depending on what time of day it is and what they’re buying. So for us there isn’t this huge distinction between online and high street business. The customer has always been the same.”
Despite the proliferation of price comparison sites, which poses a challenge to price-led retailers, price can be less of a determining factor online as range, experience and convenience (Net-A-Porter delivering a pair of Jimmy Choos to your desk in under four hours) take over.
So how can brick and mortar companies compete with online players? Dennis responds by asking why cinemas still exist, as they offer a product you definitely don’t need to leave the house to experience. The point he makes is that retailers’ and leisure operators’ future lies firmly in building in points of difference into an offering and not in competing on the same terms. He cites the Paul Smith boutique on Albermarle Street, which sells exclusive product not available online in a one-off atmosphere, as a counterpoint to the designer’s transactional website – the antidote to globalisation.
So what about women’s involvement online? Nancy states that women do not just look at the Internet as a time-saving mechanism: “It’s absolutely about being inspired, advised and entertained – it’s a part of life. Key verticals – parenting, pregnancy, health and weddings – are so important to women online and they really get involved. In the ‘You and Your Wedding’ chat rooms, women who got married eight months ago are still giving out advice to brides-to-be!”
“It’s no longer about simply speaking to younger consumers, it’s about engaging them and making them feel part of the brand in ways that our age we probably don’t naturally think of.”
As for the future? One prediction is that mobile will arrive in a big way. Soon we will be having the same kind of conversation as we are having about the Internet about interesting, mobile-specific applications that we couldn’t even dream of for a landline-based Internet connection and the consumer experience offered via that medium. Nancy predicts that digital will be accepted far more as part of the mainstream: “I think just as if you talk about the youth of today as ‘digital natives’ – which we do all the time – they would say ‘What does that mean? What the hell is the digital thing?’ They are used to multi-tasking and doing eight things at once.” Tom predicts that there will be a reaction against technology, so that rather than seeking out wireless hot spots, people will seek out cold spots! David predicts the advent of Internet Protocol Television (IPTV) and the ubiquity of entertainment streaming. And for CEOs and rising stars in the world of business?…
Now in 2016, digital innovation continues to move forward at a nearly alarming pace for many companies. Those that drop off the map do so now because they struggle to keep up with technological advances that have become a daily part of the lives of consumers – and the ease of creating a company makes that number that much higher. Investments in digital marketing, ecommerce and partnerships with pureplayers are all ways that have proven useful to companies looking to stay ahead.
So back to the prediction that by 2012 FTSE 100 CEOs would have to have online experience? That’s not an absolute requirement quite yet. But what those CEOs do have behind them are strong leadership teams with agile and creative minds and experience in digital innovation – and in my experience, the best teams can make up for what a CEO lacks. I’m looking forward to looking back again in ten years – who knows what those brilliant minds will come up with by then?