Whenever an innovation happens, it pretty much kills a major chunk of a previously thriving industry. Mobile phones eliminated the need for pagers and shrunk the market for a variety of integrated services that earlier used to be stand-alone products (such as calculators, maps, alarm clocks, payphones and even cameras for amateur use). WhatsApp and Skype severely impacted the market of Text Messages and Long-Distance Phone Calls!
While there was a time when it took several hundred or even a thousand years for consumer habits to change, today it is faster than ever before, in some industries, drastic change may happen in less than 5 years!
The biggest risk businesses face today that can destroy them is rapidly changing consumer habits.
There really is no such thing as customer loyalty. The only thing that matters is the perceived value. If your customers feel they get better value elsewhere or their peer group seems to make the change, they too will switch very soon. Here are two proactive decisions you could make to tackle the same:
- You can choose to expand into an industry that has stood the test of time and has shown consistent growth, even if it is slow. This shows that consumer habits in that industry do not shift so rapidly.
Of course, moving into a new industry, even a stable one comes with its own risks, and often involves starting from scratch so it is wise to do a cost/benefit analysis prior to the same.
- You can choose to stay focused in your industry, but you have to always be ahead of the curve, study changing consumer habits and experiment with new products and business models that are in harmony with the changing consumer habits. That way when innovation happens you can embrace it quickly and can continue making money your industry or a related industry.
The final question to ask yourself is whether your business is really going to thrive for the next ten, twenty or thirty years. If not, then what’s your plan when things do change?!