Friday, 12 November 2021

BUSINESS MODEL INNOVATION: A RETAILER’S SURVIVAL GUIDE

If you're hoping to make your business stand out in a sea of competition, you will need to start innovating. But it's not about merely innovating the product or service you offer, it's also about innovating your business model.

 

What is Business Model Innovation?

Your business model is the outline of how your company plans to generate income with its product and customer base in a specific market. The dependencies include:

  • Who your target market is
  • What are the benefits and values your business offers
  • How you create this value to your target market
  • How your business makes money

Failure to innovate your business model could lead to even bigger failures.

Take Toys R Us for example, a well-known toy store that prides itself with its in-store experiences. When online shopping started picking up, Toys R Us did not believe in it and treated the internet as just another distribution channel. Unfortunately, the company lost to competitors who sold toys at cheaper and better rates on Amazon. Hence, it is vital for businesses to re-look back into their business model.

 

4 Types of Business Model Innovation to Consider

  • Customer Acquisition Innovation

    Customer acquisition innovation requires you to explore the different ways to reach and influence your target market better. You will need to consistently evaluate and update your strategies in acquiring potential customers.

  • Profit Model Innovation

    With profit model innovation, you may consider areas where you can optimise to manage the cost of your products or services without removing the value you offer. Ikea is a great example, as they were able to make their furniture affordable by simply allowing the customers to assemble it themselves.

  • Pricing Innovation

    Pricing innovation essentially means to be flexible in the pricing of your products and services according to the demand. For example, applying premium charges for best seats at the cinema or giving discounts during off-peak hours.

  • User Experience Innovation

    User experience innovation is the natural extension of a customer’s desire towards your products or services. For example, providing your customers the option to connect with you and your services via digital tools like direct messaging and video calls.

 

 

Advice from the Experts

Cyclist Wardrobe

When the first movement control order was enforced during the peak of COVID-19 pandemic, business partners Daniel Yap and Max Ng’s cycling gym Cycology were forced to temporary halt their business operations. However, they overcome this by innovating their business model in terms of customer acquisition. With an affiliate programme, Cyclist Wardrobe used an online platform to promote the products by their associated retailers.

Their advice to businesses is to be nimble and canny. By thinking outside of the box, businesses should be open to new ideas that can benefit them.

The Tuyang Initiative

Co-founder of The Tuyang Initiative, Juvita Wan, looked at innovating the user experience of her business. She utilized virtual meeting tools,such as Zoom, for her practitioners to showcase their art to the viewers from Malaysia and beyond.

“What I would say to them is to not be fearful but to look at these tools as a way to enhance opportunities and collaborations. I think one silver lining of the pandemic is that it made the world become borderless and these tools were responsible for that,”

Juvita Wan, Co-Founder of The Tuyang Initiative

 

4 Tips to help you Get Started with Business Model Innovation

  • Evaluate your current business model

    Assess your current business model and what it currently offers. This will give you an overall look of your business and give you an idea on areas you could possibly innovate.

  • Talk to your customers, observe their needs

    Conduct surveys or ask your customers directly during the sales process to see if there are any issues. Observe them to see if they’re struggling or hesitant with your product or service.

  • Check out your competition

    Keep up with your competitors, especially in terms of digital solutions. Carefully evaluate and make necessary changes into areas that will make you stand out from them.

  • Plan out potential new innovations

    You may collaborate with another company, combine another product with yours, or even cut down costs to make your product more affordable yet attractive.

All of these require planning, so do your research to make it happen!

 

 

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Consult our sales personnel for more information on our range of business solutions, products and services.