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Is it time to disrupt your industry?

Nobody enjoys a disruption, but it’s a fact of life. Kids ask to be picked up in the middle of a great movie. Meetings are scheduled right when you’re actually being productive. And occasionally competitors or a new technology turn an industry on its ear.

Increasingly competition is coming from outside your industry, or influenced by technology that changes your industry. Think of the iPad and the publishing industry, or the iPod and the music industry.

Grocery shopping is not exactly ripe for innovation. Or is it?

Enter the Tesco Homeplus virtual subway store in South Korea. They were solidly second as far as awareness and market share in the traditional grocery store model. However, they got creative with a campaign that involved growing their market share and sales without building more stores. They installed large poster images that depicted grocery store isles life size in subway transit areas. The idea was that viewers could shop by scanning the item with the displayed QR code on their phone and add it to their shopping cart. The items were processed using online payment and groceries were delivered to their home after they got home. Suddenly wait time had become productive and novel.

In doing this Home-plus disrupted the traditional distribution channel. No store, no clerks, no inventory. They had a warehouse and delivery trucks at less cost. They disrupted both the pricing model as well as the payment system. Payments were through a mobile wallet. They disrupted the product model. Items were not real, but rather virtual images. There was no spoilage, refrigeration, or restocking. And finally, they disrupted the promotions model. The endeavor attracted media coverage and was a natural for shared social media exposure. Earned media helped spread the word. Plus it was a natural for capturing data user insights for further direct marketing efforts.

What I love about this example is how it not only disrupts one of the legs that strategic marketing is built on (product, price, distribution, promotion), it disrupts all four!

Watch the Youtube video of how they did it at: http://bit.ly/krv39i

Of course, South Korea had the perfect conditions for this model: A high penetration of Smart phone users, availability, awareness and trust in a mobile wallet service. And they had the right demographic density in urban transit areas to ensure there were enough users to make it a viable endeavor.

I think this is the kind of innovative thinking we need more of. What are your thoughts?

Mary Charleson

Comments

  1. Talk about “out of the box” thinking! Our world is changing so rapidly that truly innovative thinking is the way forward. It’s an exciting time for Marketing folks. Mobile phones are truly a game-changer, in both the developed and developing worlds.

    • I just love this example because it is such a departure from all conventions we have for the grocery store category. And it’s a great example of challenging every single angle of the marketing mix.

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