Page 150 - MYM 2015

Digital Distribution:
A New Framework for the Digital Age
Ira Kaufman PhD Chris Horton
Abstract: Digital is transforming business and society. Throughout the world, digitally enabled consumers are turning to the Internet as the principle means of information discovery and purchase decision. According to research rm Gartner, by 2020, consumers will manage 85% of their relationships without talking to a human. In this new paradigm, the consumer ultimately determines how, where, and when they will purchase products and services. To stay competitive, companies must anticipate the changes digital technology brings and be agile enough to adjust their business models to re ect new digital channels. This article highlights three companies that have embraced digital transformation initiatives and adopted digital distribution models to increase operational ef ciency and customer-centricity.”
Digital is transforming business and society. Each new day reveals the many ways
in which the global digital revolution is profoundly impacting individuals and enterprises alike. Throughout the world,
digitally enabled consumers are turning to the Internet as the principle means of information discovery
and purchase decision. Recent data from network equipment provider Cisco Systems suggests this trend will continue in coming years, as Internet traf c, chie y from mobile devices, realizes exponential growth:
• Global Internet traffic in 2018 will be equivalent to 64 times the volume of the entire global Internet in 2005. Globally, Internet traffic will reach 14 gigabytes (GB) per capita by 2018, up from 5 GB per capita in 2013.
• Internet traffic from wireless and mobile devices will exceed traffic from wired devices by 2018. Wired devices will account for only 39% of Internet traffic by 2018, while Wi-Fi and mobile devices will account for 61%. In 2013, wired devices accounted for the majority of IP traffic, at 56%.
• The number of devices connected to IP networks will be nearly twice as high as the global
population in 2018. There will be nearly three networked devices per capita by 2018, up from nearly two networked devices per capita in 2013.
A New Framework
For businesses, this digital revolution via Internet and mobile devices is not just about the latest social network to allow brands new ways to communicate and interact with their target markets. More importantly, digital is empowering consumers to have greater input and expectations in a fast-changing marketplace that is upsetting long-held paradigms. Consumers can now search, review, and purchase products and services without interfacing with a salesperson or intermediary. According to research firm Gartner, by 2020, consumers will manage 85% of their relationships without talking to a human.
Today’s digital distribution frameworks give consumers control over how they access, interact with, purchase, and share content. Moreover, in this new paradigm, the consumer ultimately determines how, where, and when they will purchase products and services.
Is your company’s business model exible enough to address these changes in distribution and the resultant shrinking of margins? Digital distribution
150 I October 2015