VUCA | Volatility, Uncertainty, Complexity and Ambiguity
VUCA is an acronym used to describe or reflect on the volatility, uncertainty, complexity and ambiguity of general conditions and situations. It was first introduced by the U.S. Army to better prepare for complex situations resulting from the cold war. Later, business leaders found it quintessential to respond to the fast changing and every complex global market situations. Vuca principles are foundational to disruptive innovation tactics and responses.
Blockchain Changes the World
Blockchain broke into global consciousness when Bitcoin spiked to $19,783 on
December 17, 2017. At the time the market capitalization of all crypto currencies
peaked at $853 billion... More from Jim Harris, Blockchain Keynote Speaker
The number of page views from mobile devices (smartphones and tablets) surpassed the page views from desktops globally in August of 2016. And in March 2017 Android surpassed Windows as the most popular operating system worldwide.
As a result, retailers that are mobile first focused are experiencing rapid growth. By contrast sales in physical retail stores has plummeted by more than $100 billion dollars in the US over a decade (from 2006 to 2016) – and are predicted to continue to fall.
Christmas is the biggest sales season of the year for retailers – both for traditional retailers and e-tailers. Amazon's dominance of online retail sales during the weeks running up to Christmas 2016 should terrify traditional retailers. The chart below is for all eCommerce sales. Amazon sold 15 times more than its nearest competitor (45.5% vs. 2.9%)!
And it's not just retailers who are terrified, but investors. In February 2017, Warren Buffet announced that he had sold $3 Billion of stock in Walmart, because, in his opinion, the rise of Amazon was unstoppable. (https://www.businessinsider.com/warren-buffett-drops-walmart-stock-2017-2)
When you look at how the market cap of traditional retailers has fared against Amazon over the last decade, it's staggering:
As of June 2017, Amazon is worth 50% more than Walmart, Target, Best Buy, Macy's, Kohl's, Nordstrom, JC Penney and Sears COMBINED!
When you look at the changes in valuation from 2006 to 2017 for these nine retailers, the results are shocking:
Sears which is teetering on the brink of bankruptcy, it has seen its market value plummet by more than 99% over the period;
JC Penney has fallen 92% in value;
Kohl's value is down by 74%
Macy's by 71%
Target is down 39%
Nordstrom is down by 30%
Only Walmart has held its own, growing by a mere 1% in value over 11 years.
By contrast, Amazon has seen its value explode by more than 2,673% over the same period.
Now Amazon began by selling books. A book is a book is a book. It makes sense to buy books over the web. There's no difference in quality between a book bought at one store and another. So it was a logical place to begin. The impact Amazon has had on bookstores is profound, in fact, Amazon will replace nearly every Barnes & Noble in 2017 alone. (https://qz.com/943870/amazon-amzn-will-replace-nearly-every-bookstore-barnes-noble-bks-closes-in-2017/).
Since Amazon was founded in 1994, there has been a decrease of over 15,000 bookstores in the US.
Statista reports 38,539 bookstores in 2004 falling to an estimated 24,611 in 2017 https://www.statista.com/statistics/249027/number-of-bookstores-in-the-us/. These figures are significantly at odds with US census data reporting 10,200 bookstores in the US as of 2002. http://oedb.org/ilibrarian/12-stats-on-the-state-of-bookstores-in-america-today/
What people don't understand is that you only need to facilitate a small shift in consumer behaviour to radically, profoundly, and completely change the market. Here’s what I mean: my wife reads a book a week. The average in North America is about 4 books a year. All the books she reads today are digital. It's an extreme example of the Pareto principle (the 80/20 rule). (https://www.irisreading.com/how-many-books-does-the-average-person-read/)
Shifting just 2% of market to digital – the heavy book buyers – means moving 25% of the market. And shifting just 5% of the market from physical books to digital ones all of a sudden means that the majority of books purchased are digital – and just like that, physical bookstores go out of business.
By the middle of 2010, Amazon's sale of digital books had already exceeded the sales of physical books. Think about the business advantages this confers: no shipping costs on initial sale, no cost for returns. No overprinting and unsold stock – a problem that used to plague the book business. As recently as 2009, an estimated 30-40% of books were returned by bookstores annually and 65-95% of these are pulped.