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BirdsEye View

My friend Larry West recommended that I read this book, The Mobile Wave. I read it and I have some things to share, impressions and facts that should be heeded by us all.

I'm not big on change. Nor am I one of the early adopters who cry wolf enough times to eventually be right. But I do recognize change when I see it. And change is here.

As usual, I start with the facts:

• As of 2011, more than 5.3 billion people (70% of the earth population) possess cell phones.
• In 2010, 42% of Americas surveyed said they "can't live" without their cell phones, and 2/3 slept with their phone next to their beds (as do I, I confess).

It's too overwhelming to consider the ramifications, but patterns are beginning to emerge. Consider the following:

• The music industry. What started as a physical product that one had to obtain by going somewhere, buying the thing (vinyl, cassette, CD etc.) and bringing it home is now largely virtual. iTunes changed the world with its digital revolution. More than 2,700 record stores were closed between 2003-2007...
• Publishing. I wrote about this phenomenon before. Books and publishing are turning into software, as evidenced by the explosion of Kindle, Kindle Jr., Nook etc.
• News. Dick used to bring me up-to-date on the news. I had little interest in reading the paper or watching news on TV. Today, between the Financial Times app and the USA Today app, both on the iPhone, I get updated while waiting for a flight or in line in the grocery store. And, in this case, I AM statistically significant!
• Payments. The traditional model is under attack by software-based innovators such as PayPal, Square, Intuit, Google wallet etc.

What all these industries have in common, as I wrote in the past, is one critical thing: Those that didn't change died. Tower Records died. Borders Book stores died. Newspapers are closing left and right. And we, if we don't move along with the times, will create our own obsolescence as well.

The mobile revolution will compel every company that touches consumers to establish a direct link to its customers through smart phone apps. This is revolutionary and has profound implications not only on how we do business but also on how we market, sell and interact with our customers. The good news is, the direct application should shorten the value chain from manufacturer to consumer and reduce the costs of retaining, distribution and service.

Sounds like science fiction? Consider this (which isn't uncommon): a compelling personalized mobile app allows any company to interact with its customers 1:1 and influence buying decisions that are already underway, taking place in a competitor's store. Case in point: Dick likes books. We went to a book store. He found a book he liked. Before we purchased it I suggested we click on Amazon to see what their book price was. It was 50% cheaper. We bought the book right there and then and left the store with the book purchase, but not from the store. The book was at our house before we got there two days later.

What does this have to do with banking? Let's say your customer was attracted by a special offer from a competitor. While at their branch, they could check on your rates before making the final decision. You have an opportunity, customer-initiated, to win this transaction. Michael Saylor predicts, and I concur, that "there will be a scramble as companies try to figure out how to offer special deals, discounts, loyalty programs, virtual sales assistance, product advice and other services directly through their apps on their customers' mobile devices&First movers will take and hold a disproportionate share of a consumer app usage...The winners will be those companies whose icons appear on the first two pages of people's phone screens".

Additional disruptions are coming fast and furious at us:

• The destruction of paper. Paper has been the most common container of information for centuries, but it is being quickly replaced by magic paper on the mobile screens. It weighs the same whether we have one book or a hundred books in it. Even SCB Forums stopped putting our traditional books filled with information on the meeting room table. Instead we email it all in advance and folks come with their iPads (and occasionally printed out materials) to the sessions.
• Instant entertainment. The days of the DVD are gone, as the demise of Blockbuster can attest
• Global shopping. No longer do you have to go to South Africa to get their delicious rusks. You can buy them right here in the comfort on your home, and, more often than not, through Amazon.
• Social networks explosion. People spend far more time on social networking sites than any other internet destination, and mobile availability amplifies this trend.
• E-wallets. Money and credit are fast becoming apps on our phone. Our country lags behind other parts of the world, but this shift can't be stopped. Even here we pay our kids' allowance through the phone app or transfer money to their account as they stand in line to enter Disneyworld. Digital cash knows who owns it, who should have it and can even alert the authorities if either of those is suspect.

We are certainly aware of these shifts, but we are having a difficult time figuring out what to do about them. All these topics, most notably the destruction of paper, social networking and e-wallets, are being discussed at our forums. But few are resolute in what they mean or what their strategy to capture this wave and ride it should be. I can't think of a more important strategic question we should ask ourselves today. I know the vendors are far behind, but even that fact tells us something. Can we afford to wait? And, equally importantly, can we afford to be on the bleeding edge?

The one thing I'm sure of is that we can't afford to be a fast follower. We have proved that all too often we become a slow follower regardless to our commitment to be a fast one. This time we must be ready to pull the trigger on very short notice. And this is what strategy is all about!