An avid yogi, I was excited to hear that Lululemon was morphing some of its stores into part-time yoga studios -- free yoga classes! I then learned that this was, in fact, part of the heritage of the company and the model for its first store. Selling clothes by day and teaching yoga by night -- it makes perfect sense.
If you create a product and then foster a community of enthusiasts around that product in order to create a network of value, everyone wins. Community development, however, is just one pillar in creating a value ecosystem. The ongoing digital disruption is increasing the capacity for a brand to build an exceedingly effective value ecosystem. (I'll be exploring the notion of this digital value ecosystem in detail at the upcoming iMedia Breakthrough Summit).
Brands that fail to develop a community around their products or services are not only missing out on a huge opportunity, but they are also in risk of becoming irrelevant to modern consumers who demand a dynamic network beyond the company's core offering. Major corporations like Coca-Cola and PepsiCo continue to foster brand respect because both have built extensive value networks for consumers on top of their foundations as beverage companies. At their core, they are beverage companies, but consumers crave the culture each has created as much as the drinks.
To understand the importance of creating a digital value ecosystem, let's take a look at one brand that has excelled in this field by augmenting its products with innovative technology and unique partnerships. We'll then take a deep dive into how you can build a digital value ecosystem by stepping outside of your comfort zone to push your brand into new business areas previously thought inaccessible.
Nike's innovative value ecosystem
A popular (almost clichéd) example for our industry, Nike has managed to go beyond its core product offering and has built technology that fuels both sales of its core products (pun intended) and the community surrounding the various activities where Nike products are used. Like Lululemon, Nike has created a value ecosystem through applications like Nike+, Nike Fuelband, and a variety of other applications. Unlike Lululemon, Nike has built this ecosystem by leveraging both community and cutting-edge digital technology.
Nike has expanded its digital value ecosystem to include unexpected but highly relevant partners. Not only has Nike created the Fuelband technology, but it has also extended its digital value ecosystem to include software developers through its partnership with TechStars, an incubator that helps early stage startups. Through this partnership, Nike has fashioned a public developer whose purpose is to co-create Nike products, building additional value for the company's customers more efficiently than ever before. This creates a community among both developers leveraging the platform and end users celebrating the fruits of this unique collaboration.
While this type of collaboration is not new, this innovative approach serves as a force multiplier for Nike's marketing efforts, thereby adding significant value to several areas within its digital marketing value ecosystem simultaneously. Nike's robust, innovative value ecosystem might lead one to ask the question, "What business is Nike really in? Is it a sports apparel brand or a technology firm?" Furthermore, "What role does the marketer play in this new business paradigm?"
Note: While my company, MasterCard, embodies the same values as the ones above, I am saving that insight for the upcoming iMedia Breakthrough Summit.
Whose job is it to define and build the digital value ecosystem?
As digital technology continues to disrupt industries, senior executives must do some soul searching and ask themselves:
- What business are we in?
- What business can we be in?
- What business do we need to enter in order to avoid losing our stronghold on our core center of value?
These are not easy questions to answer. One challenge is deciding who should be working on answering these difficult questions. Can the onus of defining and guiding the course of future products possibly fall on the marketer? Can you ask product developers and managers to help outline the way in which products are presented to the marketplace?
In both cases, yes. Marketers should help guide product development. And product developers and managers should influence the way those products are presented. If you're not thinking this way now, you better reorient yourself -- and fast.
When we talk about the creation of a digital value ecosystem built to support a core center of value, it is imperative that both product-focused individuals and marketers lay down their expired methods and come to the "table of progress" with the desire for change. Given the aforementioned responsibility, you -- the modern marketer -- must make it your job to step out of your comfort zone and wander into new departments and learn new perspectives.
Who is at the center of creating the digital value ecosystem?
At the center of creating the digital value ecosystem sits the almighty user-experience (UX) designer. Often times, I wonder whether or not the term "designer" is a disservice to this professional, as traditional design plays little part in their role. Part researcher, part psychologist, part anthropologist, part cross-functional business strategist, and part technologist, the UX designer's role is one of empathy for your company's users. The UX designer doesn't just look at what is, but rather imagines what can be as well.
When it comes to looking across functions and determining the answers to the above questions regarding opportunities for your brand, I highly recommend having a UX professional by your side. The role of the user-experience designer must be escalated. The UX discipline has evolved. User-experience professionals sit at the crossroads of research, product design, digital and UI design, and business strategy. If you are still relegating the UX designer to the digital design department, you need to do some more research on the depths that a good UX can bring to the party.
In many ways, a seasoned UX designer is the new strategic planner. So please, be nice to them and rely on them heavily.
Putting this information in practice
The digital disruption has shaken up the world of business. But where some see cause for concern, others see opportunity. With low-cost, high-functioning microprocessors with advanced sensors in our grips all day, and social networks nearing global ubiquity, the opportunity to redefine or refine your brand offering has never been more limitless.
Once you've defined your digital value ecosystem and have a UX designer in place (or, at least, understand the position's indispensability), here is a short list of questions you might want to ask yourself:
- What features and functionality can make it easier or more fun to use my products and services? Are there already companies providing these secondary offerings (potentially as their primary offering)? If so, do they pose a threat to my core products or are they potentially a friend?
- How can connecting customers with one another derive greater value for all customers?
- How can I open up my product to allow others to develop and commit code that will enhance my core offering?
- Am I fully aware of the potential of my value ecosystem, and, if not, have I spent ample time mapping it out?
Answering these questions require lateral thought. Don't be afraid to go to places that, on first blush, might sound ridiculous to your colleagues. Push yourself to stretch the realm of opportunity. Go as far out of your comfort zone as possible. If you refuse, I can guarantee you will be far out of your comfort zone when a young nimble startup has disintermediated your brand to the point of irrelevance.
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"Girl hiding" image via Shutterstock.