Last week, I did something I never, ever, do. I bought a pair of pants online. Well, actually, I bought three.
You might wonder why this is noteworthy.
In this month's HBR magazine, Clayton Christensen and I explained how corporate executives and strategists can use a framework to evaluate the speed and scope of disruption. The article, Surviving Disruption, outlines how not all waves of disruption are uniform. If they were, outcomes wouldn't be as varying as the swift destruction of tower records in the face of the iTunes store and the slow strains put on Microsoft Office by Google Documents.
In the article, we explain these differences by highlighting the real differences in a business' customer base. In reality, your customers are simply not all the same. At their very core, they walk in your doors with very different jobs for which they need solutions. Disruptive businesses, like online retailers, are often uniquely positioned to perform a handful of jobs-to-be-done, but poorly positioned to perform others. Knowing the difference is the key to directing your legacy business in the face of disruption.
It's this concept that brings us back to my online shopping experience. Like many Americans, I was quick to embrace online retailers as preferred vendors for many types of products. I buy books from Amazon, buy personal care products from Soap.com, and bought my music from the iTunes Music Store (though now I subscribe to Spotify). But, like many Americans, I never really shifted to buying clothing online. Because of the non-standard styles and sizing across clothing brands, there was always a strong possibility that anything I'd order online would simply need to be returned. Where I could order a new New Balance shoe from Zappos with relative certainty that it would fit, buying jeans was an entirely different story. Walking into a retail location and trying on the clothes minimized the risk that I'd end up with something that didn't look good on me, and by minimizing the risk, it minimized the associated stress, too. Only the types of steep discounts offered at Gilt or Bluefly could convince me to risk shopping online.
According to the framework we offer in "Surviving Disruption," I am the type of person legacy retailers should be vying to protect; the shopper dying for the in-store experience. For shoppers like me, a new ecosystem would need to emerge for me to switch to the disruptive platform — providing legacy retailers an opportunity to get ahead of the curve. Unfortunately for the bricks and mortar retailers that have failed to act, it appears online retailers are now investing in building that ecosystem.
Last week, during an evening stroll in Bethesda, Maryland, I noticed a Bonobos store. Bonobos was one of the first vertically integrated online apparel companies — specializing in men's pants. While I never bought a pair, I'd heard of the company and was intrigued. I walked in to find that store wasn't a sales location — instead, it was simply a showroom. I could try the pants on, but would have to order them online.
I gave it a whirl. I tried everything on — found all the right sizes — discussed the styles with the employees — and ultimately got some great recommendations. I was sold. They explained that in two days, I could get anything I decided to order online from an even larger array of colors and styles. What's more, the store employees sent me an email after I left with all of the right sizes for me — regardless of which products I ordered — to ensure that the right fit was only a Gmail search away.
All I needed to de-stress my buying experience was a showroom partner — much in the same way that Best Buy has effectively become the showroom partner for Amazon's consumer electronics business. In our article, we call this barrier to disruption the ecosystem barrier; or the barrier that emerges when certain customers can't get the job done without the development of new businesses. But once those new businesses emerge around disruptive entrants, expect the impact to be swift.
I found myself writing this story not because it's particularly novel. Online apparel companies like Bonobos, Warby Parker, Quincy, and more have been offering showroom space for years (though mostly near their headquarters in New York). Instead, I am writing this story to urge managers of decades-old businesses to use strong business theories to evaluate threats and maneuver accordingly. As our group likes to say, "Disruption is perfectly predictable." No customer is safe forever, though some are safer than others. Managers of legacy businesses must look to those they can defend and develop a strategy to change with the times. Neglecting to do so will leave them with customers like me... a Bonobos convert for life.
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