Unlocking the Customer Value Chain: How Decoupling Drives Consumer Disruption

by Thales S. Teixeira

These disruptive companies, and many lesser-known firms that we’ll analyze, all deploy innovative technologies, but they use technology to enable their business models. The business models themselves represent the true innovations.

These customers were engaging in a practice called “showrooming.” And in 2012, Best Buy was hardly the only victim. Apps such as Price Check by Amazon turned the brick-and-mortar stores of Walmart, Bed Bath & Beyond, and Toys “R” Us into showrooms for many shoppers. As Google reported, more than six in ten smartphone owners used their phones in-store to help in shopping.

shoppers reported that their top three reasons for “showrooming” were better online prices, their desire to see products in person before ordering online, and the unavailability of items at retail stores

In the spring of 2013, after another lost holiday shopping season, Best Buy finally made a bold move: it promised to match prices with Amazon and other online retailers.

Price matching stopped the leak of customers, but it ate into profit margins without addressing the root cause of the industry’s disruption.15

Why were executives struggling so much with disruption? Did they know how to respond but just needed more time? Or were they genuinely baffled, regarding disruption as utterly novel and unknown?

For a fee, Birchbox sent customers monthly boxes of beauty products to sample. Yet customers didn’t get to decide what went into their boxes—Birchbox did that for them. In this way, Birchbox made it unnecessary for customers to visit Sephora to test makeup, lipstick, perfume, and skincare products—they could now do this in the convenience of their own homes. Consumers were delighted.

During the early 2000s, TiVo disrupted the market by introducing digital video recorders (DVRs) that allowed viewers to record programs and then fast-forward through commercials. In effect, TiVo decoupled viewing TV programs from watching ads.

Today, Americans eat out more than they eat in: in 2015, sales at U.S. restaurants and bars surpassed those of grocery stores for the first time in history.24 In fact, households with families have given up preparing meals to such an extent that they now have started to miss it. The challenge is that many people no longer know how to prepare more elaborate dishes because their parents did not teach them. They also don’t have time to spend an entire morning making lunch or an afternoon making dinner.