3 forces driving disruption beyond retail

Hindsight is 20/20. But looking back shows the past as linear — we can draw a straight line from where we were to where we are. It’s figuring out where we’re going that can be complicated. Brands already know change is coming. Now they have to know how to imagine it — and that’s where the challenge lies, according to radical Ventures CEO Pascal Finette.

“We’re getting disruption wrong,” Finette said, speaking at NRF’s Shop.org conference in Las Vegas last month. “Disruption is this weird word. Everybody talks about it, nobody understands it and everybody is scared by it.”

“Real disruption is when new things make old things obsolete.”

Pascal Finette
radical Ventures

Innovation is just doing the same thing better, he said. The safety razor was good enough — then brands like Gillette came along, adding more features, more blades, and just like that, the safety razor was obsolete. Then came Dollar Shave Club, offering a two-blade razor — and a subscription service that eliminated the need for customers to remember to buy new razors. “Real disruption is when new things make old things obsolete,” Finette said.

Three forces drive disruption, he said. First, disruption is never one feature. The smartphone isn’t a disruption — it isn’t one thing; it’s a collection of a lot of things: a glass screen, a new kind of processor, a new kind of battery and operating system. “It’s easy to dismiss these things — we only see incremental change when we look at one thing,” he said.

Second, many existing skills and processes must evolve into something new. “This is the most dangerous part,” Finette said, pointing to the car industry: For decades it was focused on the combustible engine, which has hundreds if not thousands of moving parts — meanwhile, the car of the future has something like 80 moving parts.

Meet more disruptors at Retail’s Big Show

Hear from the CEO and co-founder of StockX and more digital disruptors pushing the boundaries of retail at NRF 2019: Retail’s Big Show, January 13-15, 2019.

Finally, disruption almost always reaches the tipping point at the go-to-market stage — when companies use available resources to deliver a unique value proposition to customers. When it was first released, the iPhone wasn’t better than the Nokia. It was just packaged differently — and was cheaper. There’s a “customer need line,” Finette said, a quality that products need to have to be acceptable to consumers. “Sometimes in markets there’s a new cheaper worse product that eventually gets good enough,” he said. “It hits the customer need line.”

The skills of today might not be those that make people — or companies — successful tomorrow. “It’s not complicated,” Finette said. “It’s mostly common sense.” Disruption comes from the classic four Ps of marketing: product, price, place and promotion. It’s the right combination of chaos and order. “You don’t have to be a futurist. All you need to know is how to read the signals.”

To learn more from companies disrupting the retail industry and beyond, check out the agenda and brands speaking at NRF 2019: Retail’s Big Show.


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