One way for retailers to beat the current malaise on the High Street is to join forces, both with other retailers and with technology partners, to form ecosystems. Only in this way can retailers grow in today’s technology driven environment.
So says new research from Accenture, which finds that 78% of UK business leaders agree that building ecosystems – joining forces with other companies to share customer insights, technology and industry knowledge – is critical to their strategy.
The ‘Cornerstone of Future Growth: Ecosystems’ study by Accenture Strategy surveyed 100 UK C-level executives from different industries to understand how companies are creating competitive advantage through agile business models. The study found that 76% of UK businesses believe their organisation will generate more than half of its revenues from ecosystems in the next five years.
“UK business leaders are quickly realising that they can achieve higher levels of growth by partnering with other companies in ecosystems over going it alone,” explains Peter Lacy, senior managing director and UK & Ireland lead, Accenture Strategy. “Each player brings something unique to the table, which can help them innovate, create new propositions, expand their customer base or enter new markets. The beauty of ecosystems is that no single company owns or operates all components of the solution, making the value generated much larger than what could be achieved alone, and the risk is distributed equally.”
Enabled by digital platforms, ecosystems could unlock £75 trillion of value for business and society over the next decade. To capitalise on the opportunity, the research suggests UK companies are forming ecosystems to make major innovation plays (66%), increase revenue growth (60%), access new markets (55%) and gain new customers (53%). Nearly half (48%) of UK business leaders are actively seeking partners today.
“Due to increasing market pressure, we’re likely to see more UK companies – particularly those that have traditionally been competitors – join forces as they look to create new growth and achieve competitive agility. ‘Coopetition’ will continue to grow and exciting partnerships will form as a result, some of which have already remade markets and industries around the world,” says Oliver Wright, managing director and global Consumer Goods lead, Accenture Strategy. “Customers will benefit from the new products and services that will be created, and organisations will pursue new business models to capitalise on market shifts.”
Business leaders say that some of the biggest challenges they experience when building ecosystems include getting comfortable with ceding control – 45% of UK leaders are concerned about sharing company assets and secrets with other organisations – and 41% say it’s challenging to balance the responsibilities of the current business while exploring the new.
UK businesses pursuing disruptive growth by building ecosystems should consider:
• Setting the vision: For ecosystems to deliver growth, it’s important to consider what the strategic intent and innovation goals are upfront. When ecosystem players combine their functional, technology and industry strengths and capabilities, they can deliver exciting new customer propositions and open new markets.
• Identifying the right partners: Selecting the right partners is critical to ecosystem success. Leaders should look for partners with complementary capabilities, a collaborative mindset, industry experience, customer relationships and data to set themselves up for success. They must also clearly define how data will be shared and how success will be measured. Proper governance frameworks can ease fears and reduce friction among participants.
• Orchestrating the ecosystem: Once leading companies with distinct capabilities join together with a shared vision and necessary outcomes, they can launch and operate their ecosystem. The process involves planning and testing the ecosystem design and piloting the market play. Successful ecosystems enable companies to drive new value beyond what they’re able to do in isolation.