July 20, 2016
Unilever is the latest in a long string of enterprise giants to acquire digital. It acquired the digital-native startup, Dollar Shave Club, for $1 billion. I've been telling the Dollar Shave story lately as a way to describe the disruption possible when a company uses digital technology to establish a direct relationship with a customer. Dollar Shave Club is in its customers' daily shower and conscienciousness. It's a digital disruptor, not because it has a revolutionary product. It's because it has a revolutionary relationship.
What should you take away from this Dollar Shave Club deal?
- Digital disruption starts with a direct customer relationship. Sure, sometimes digital is about new products and services. But it's always about a direct relationship with customers. That's what's so scary to traditional industries with their indirect distribution models. Unilever has sold through distribution for time and memorial. It doesn't know its customers except through the lens of research and somes times purchased sales data. No longer. Now it can know its customers as Under Armour is starting to.
- Digital strategy is about bridging the gap between your core capabilities and what customers want. For large firms, you don't need to reinvent your core capabilities to become digital. You instead need to recognize that digital is the way customers want to buy, engage, and get service, so you must give them the tools they expect. Dollar Shave Club sells razors. It just sells them conveniently at a great price. That puts digital within reach of every company.
There will be a lot more digital direct deals like this. Direct customer relationships are one vector of our digital future.