This blog post (‘post’), will reflect on instances where I have found the work of other students to be particularly valuable in relation to the module content. The reflective structure employed will be underpinned by the ‘Experiential Learning Model’, as depicted below in figure one (Abrahams & Singh, 2010, p.384, citing Kolb, 1984, p.21). My reflection will be presented in two forms – a written piece will introduce three relevant reflective experiences and a video will detail the activity that has been stimulated by these reflective experiences.
One student’s post on physical and digital locations discussed Amazon’s persuit of smart city capabilities. For me, this clarified that those who enable smart city activity can be commercially based. Before my understanding had been that those enablers were organisations with a sole environmental or societal focus. This revelation prompted me to list other commercial industries that may benefit from smart city activity, for example travel, tourism and communications. Naturally, better understanding the commercial relevance of smart cities, enhanced my overall understanding of module content.
Similarly, a student’s post on digital business models (with rather sophisticated infographics) solidified my understanding of artificial intelligence (‘AI’) – an area I conceptually understood but struggled to apply to practical marketing scenarios. In applying AI to a well-known brand, then illustrating what the consumer sees at the digital touch-point (in the form of a screenshot), I was able to appreciate AI’s potential value to engaging and effective marketing activity. Moreover, I was able to recognise the AI digital touchpoints I have used before (e.g. a service which determined the best dog food for my dog).
Another student’s post on digital business models discussed the same case study as mine (Netflix). Interestingly, I had framed account sharing behaviour (i.e. multiple people using one Netflix account), as commercially negative – decreasing users and revenue. In contrast, this post framed such behaviour as an example of the sharing economy. Considering this alternate perspective not only reinforced my conceptual knowledge of the sharing economy, but also provided me with an opportunity to apply this concept to my personal consumption. Furthermore, I was prompted to ask for the student’s opinion on Netflix’s future technological approach – their response highlighted the importance of innovation, which enabled me to make another valuable link to module content and reinforced an argument made in my post.
In today’s world, digital business models (‘DBMs’) surround consumers. Reflecting on my typical routine, DBM’s bring me undoubted value – in particular I rely on social media for communication, apps for food delivery and e-commerce for fashionable and affordable clothing. Netflix employ a clear DBM to provide an ‘internet entertainment service’ to 139 million members across the globe (Netflix, no date A). The infographic below, summarises some of Netflix’s key milestones. As the membership figures and milestones suggest, Netflix have experienced significant financial success, with a reported income of $1.21 billion in 2018 (Statista, 2018). But to what extent has Netflix’s DBM afforded them such an impressive financial performance?
Netflix (no date A)
Netflix’s DBM entails capitalising digital technologies, to offer a virtual entertainment platform with convenience and accessibility for the consumer (Netflix, no date A). According to Wilson (2016), Netflix have fundamentally changed how certain forms of entertainment are consumed. Thus, Netflix’s DBM appears transformative in nature, defined as ‘digital technologies [enabling] entirely new ways of conducting business that replace the established models’ (Canvas, 2019). As a self-professed Netflix binger, I can vouch for Netflix’s convenience and accessibility. My monthly membership plan costs less than the price of a cinema ticket, offers me unlimited access to a wealth of entertainment and is accessible on a range of my digital devices. Having afforded Netflix with such an obvious appeal, its DBM has clearly contributed to its financial success.
However, the performance of a DBM hinges on the activity of new market entrants (Vendrell-Herrero, Parry, Bustinza& Gomes, 2018). Netflix’s surging popularity has attracted the attention of organisations with the resources and competencies to replicate its offering. An example competitor, Prime Video, employs a similar DBM – offering members unlimited access to its digital entertainment library, across a range of devices (Amazon, no date). Such competition questions the transformative nature and sustainability of Netflix’s DBM. According to recent numbers, Netflix is no longer achieving its subscription targets (Sweeny, 2018), thus reinforcing sustainability concerns. This places a natural emphasis on continual innovation and/or the maintenance of points of differentiation. My preference of Netflix (over Prime Video) stems from its user-friendly site and positioning within the realm of pop culture. Although Netflix’s DBM fundamentally afforded these points of differentiation, it may not protect them from imitation in its competitive surroundings.
Netflix is well known for its monthly subscription service. Currently, Netflix offer three plans which cost £5.99 (basic), £7.99 (standard) or £9.99 (premium) per month (Netflix, no date B). The video below details Netflix’s typical offering, with varying quality and simultaneous screen ability.
Source: Netflix (2014)
On the one hand, this subscription model encourages a routinised source of income for Netflix, naturally contributing to its financial success. Although cancelling a subscription is relatively easy, users may consider this an inconvenience, or quite simply forget. On the other hand, this subscription model allows non-members to access member’s accounts (via account sharing behaviour). This potentially presents a considerable loss of income for Netflix, which is difficult to police. From an alternate stance, subscription models facilitate ‘long-term, profitable relationships with customers’ (Baxter, 2016, p.3). In the case of Netflix, nurturing customer relationships with greater depth and meaning, may enhance financial success (via loyalty, plan upgrade and brand advocation) and present considerable barriers to entry.
Netflix’s DBM has also allowed its original content creation to flourish. Rumble (2018) highlights the success of Netflix original content such as House of Cards, Stranger Things and Orange is the New Black. The popularity of these series is certainty true within my own social group, many of the conversations with my friends start with ‘what episode of Stranger Things have you got to?’. Thus, Netflix’s content creation competencies present further barriers to entry. However, despite the continual (and seemingly successful) release of Netflix’s original content, reports have emerged that Netflix is facing subscription difficulties (Sweeny, 2018). This suggests that Netflix’s original content increases usage, but not users. Given that existing Netflix users can only increase their subscription value by £4 per month (i.e. from basic to premium) (Netflix, no date B), Netflix’s financial progression may largely depend on increasing numbers of users. Therefore, Netflix original content may be limited in relation to its financial success.
Netflix’s DBM appears to have underpinned its vast financial success. However, financial performance is not the sole measure of success. Netflix may also consider success in less tangible terms (e.g. brand value or consumer perceptions). Moreover, Netflix’s popularity has stimulated fierce competition. This paired with declining subscription figures and economic uncertainty, may present considerable challenges for Netflix in the foreseeable future.
Vendrell-Herrero. F., Parry, G., Bustinza, O. F., & Gomes, E. (2018). Digital business models: Taxonomy and future research avenues. Strategic Change,27(2), 87–90. doi: 10.1002/jsc.2183
I have shopped at Topshop ever since I was little. Topshop’s recipe for fashionable, affordable and quality clothing, entices me back time and time again. It appears I am not alone here – Topshop’s inherently stylish image, innovative approach and unique offering, has fuelled its monumental financial success (Campaign, 2005). Arcadia (no date) boasts 620 Topshop stores worldwide and Topshop’s vast digital presence, with 4.5 million (on average) visitors a week. Thus, strength in numbers theory presents Topshop as an organisation able to effectively manage both physical and digital locations.
An effective shopping experience enhances the commercial ability to satisfy consumer need and acquire competitive advantage (Cachero-Martinez and Vázquez-Casillas, 2018). Furthermore, physical stores offer ‘ambience, gratification, experience of touch and feel’ to consumers (Misra, Baranwal & Jha, 2017, p.133) – all of which contribute to shopping experience. Topshop’s Oxford Circus (‘TOC’) location (pictured below) is a prime example of a unique shopping experience, which is ‘more than just a store’ (Topshop, no date, A). Spread over 100,000 square feet, TOC welcomes 400,000 visitors a week (Arcadia, no date). On my recent visit, I was in awe of the store’s size, sophisticated layout, lively atmosphere (e.g. in store DJ) and offering (e.g. clothing, accessories, cupcakes and personal shopping.). Assuming that TOC’s popularity, translates to organisational goals, Topshop appear to capitalise a valuable physical location opportunity. Naturally, my local store did not compare to TOC. Regardless its layout, atmosphere and offering still made for a pleasant experience.
However, Topshop’s physical stores likely generate considerable waste. The environmental scrutiny of fast fashion retailers from academia (e.g. Joung, 2014) (of which Topshop is arguably one), places waste as an increasingly relevant issue for Topshop. In addition, Topshop’s scale of physical operation infers significant cost – potentially worsened by the recent retail wage increase (Morrison, 2018). Justifying said cost may be challenging, given the deterioration of high street shopping, in favour of fashion e-commerce which is rife with competition (Cartner-Morley, 2019). One particular trend, known as ‘showrooming’, sees customers going to physical stores to attain product knowledge, afterwards purchasing products for less online (Kuksov & Liao, 2018). In contrast, the e-commerce route presents opportunities for widespread cost reduction (e.g. human resource) (Kikovska-Georgievska (2013). Assuming Topshop’s online store (‘www.topshop.com’) has afforded similar cost reductions, the value of this digital location can be clearly argued. However, cost reductions may be lessened or offset by the increasing cost of its physical locations, digital personnel and digital infrastructure.
Primarily, e-commerce provides consumers with convenience – convenience relating to time, stress, price comparison and the international accessibility of products (Sethi & Sethi, 2016), which in turn, increases organisational reach. www.topshop.com offers a vast selection of products (with delivery), customer service options, general product information and ‘about [Topshop]’ information (Topshop, no date, B). Having ordered from www.topshop.com before, I found the website easy to follow, the product offering immense (if not overwhelming) and the next day delivery convenient. Naturally, www.topshop.com is unable to offer the aforementioned benefits of physical presence (e.g. touch) or physical experience. Nonetheless, in my opinion, it offers an alternate unique experience, comprised of store navigation, purchase process and engaging content (e.g. the ‘inspiration’ page (Topshop, no date, C)).
The use of digital media, in conjunction with traditional media, has enabled organisations ‘to drive sales and build brands in ways never before possible’ (Keller, 2016, p.286). Topshop communicate via a wealth of digital media platforms, for example the Topshop App, Instagram, Facebook, Twitter, Pinterest and Youtube. Its digital success is highlighted by Stevens (2017) who claims that ‘Topshop has the biggest social media presence in the UK’. The video below showcases a style and tone used on Topshop’s Youtube page (Topshop, 2018).
Source: Topshop/Youtube (2018)
However, digital media necessitates careful brand management (Quinton, 2013). In particular, having encouraged an ‘extremity bias’, user generated content (‘UGC’) presents potential challenges to brands (Bigley & Leonhardt, 2018, p.125). Topshop appear to have mitigated the treat of negative UGC, via their means of digital customer service and customer interaction, for example their ‘Topshop Help’ Twitter page (Topshop Help, 2018). Furthermore, the informative value of UGC should not be overlooked (Kwark, Chen & Raghunathan, 2018). Given that Topshop have 9.6 million followers and over 6, 000 posts on Instagram alone (Topshop, no date D), it appears to have plentiful source of UGC.
Ultimately, Topshop appear to benefit from a hybrid of physical and digital locations – capitalising the opportunities and mitigating the threats of both. In this sense, it seems only natural that Topshop show signs of digital and physical integration, for example the ‘collect from store’ service (Topshop, no date, E).
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After my third year of university, I was delighted to accept the part-time role of ‘Project Trainee’ at a local marketing firm – involving administration, content creation and digital platform management. Naturally, the role required a wealth of digital activity. The digital economy (‘TDE’) is ‘based on digital network technology: the internet, computer and software programmes’ (Petkovska, Petkovka Mirchevska & Angelova, 2018, p.84). TDE is responsible for the creation and transformation of entire industries and is of great economic value (approximately worth $2.9 trillion) (Gada, 2018).
After careful consideration, I could identify three key areas in which I believe TDE had impacted the role. Firstly, digital technology underpinned and simplified vital internal and external processes in the role (e.g. creation, communication and storage). Without said technology, I believe the role would have had an intense administrative focus. Secondly, ‘digital media platforms have revolutionised marketing’ (Lamberton & Stephen, 2016, p.146). In particular, websites and social media created valuable opportunities for content creation and platform management in the role. I can only assume that before TDE, I would have relied on traditional methods of communication, challenging reach, cost effectiveness and creativity. Finally, analytics can gauge ‘digital marketing performance’ (Järvinen & Karjaluoto, 2015, p.117). This allowed for greater accuracy when determining effectiveness of my work. In the absence of this insight, I believe I would have struggled to identify issues, hindering effectiveness.
Overall, I concluded that without TDE, the role would cease to exist in its current state. However, I also concluded that the purpose of the role both pre digital economy and post digital economy, could be applied to the definition of marketing offered by the American Marketing Association (2013) – a fundamental similarity.
But how will TDE impact the role in the future? Given the historically rapid emergence and development of technology, the role will likely need to adapt to new technologies. For example, Tanser (2018) predicts the marketing significance of artificial intelligence, chatbots and live video. Alternatively, Odell and Lubek (2019) note the increase of video, messenger and in-app advertisements. Both of these sources highlight the potential for the role to change and or require different skill sets. Although I agree with this notion, I also note the potential inapplicability of these technologies to a role in a local marketing firm. Moreover, in times of economic and political turmoil, uncertainty surrounds TDE.
Järvinen, J., & Karjaluoto, H. (2015). The use of Web analytics for digital marketing performance measurement. Industrial Marketing Management, 50, 117–127. doi: 10.1016/j.indmarman.2015.04.009
Lamberton, C., & Stephen, A. T. (2016). A Thematic Exploration of Digital, Social Media, and Mobile Marketing: Research Evolution from 2000 to 2015 and an Agenda for Future Inquiry. Journal of Marketing, 80(6), 146–172. doi: 10.1509/jm.15.0415
Marketing Thoughts 