I think this is a great example of how the digital transformation is impacting unexpected industries!
One very important point that you touched on, is employees fear that they will get displaced by “smart machines”, noting that Rio Tinto has assured workers that no jobs will be lost, rather reassigned to “knowledge-based roles”. My big concern here is that existing blue-collar labor may not have the capabilities required for these new roles, and thus I wonder if Rio Tinto plans to re-educate all blue-collar employees and bear the cost of that education. I also am very skeptical of the idea that two laborers who did the same job in the mine would be retained for “knowledge roles” given their knowledge is likely to be identical, and thus inefficient to duplicate. I think to your point Rio Tinto needs to be extremely careful around their message to employees as the pushback on the union front can not be understated.
I appreciated the insight into TaskRabbit given that I have never used the app myself. While I think the business model is interesting I have several concerns that make me less enthusiastic about their future. One, the business/operating model seems easy to replicate. Is there a unique mechanism in place to keep both users and providers of the service on the app exclusively? For example, on average do providers of a service make more money listing on task rabbit vs. another app? Two, I am skeptical about the quality of the service providers. While TaskRabbit may do a background check, do they guarantee that the service provider is good at performing a given “task”. Is there an opportunity to make such a guarantee (i.e. TaskRabbit will redo a given task if the provider you booked does a terrible job?). Lastly, similar to the comment above, I think the success of this model heavily depends on local network effects (which can be difficult to build if you don’t have substantial capital to market aggressively / undercut your competition) and can not be leveraged when expanding to new markets.
I did love your suggestion to have them expand into Ikea furniture! I do think however that if that service takes off Ikea will notice and likely offer its own installation in a more competitive price.
This is a great example of the digital revolution, more specifically how much societal good can come out of it. Often we only hear of privacy/security concerns, but this underscores the potential to leverage digital technology to change lives. To your point, I think there are some substantial hurdles to overcome before printed organs can become the standard. I have no idea how we get potential patients even comfortable with the idea of a printed organ, but I guess when its life or death the barrier to trial is low. Given the existing need for organs, I wonder what can be done now to push different stakeholders in order to accelerate the technological development, regulatory approval and general adoption.
Great article Molly! I only wish there was a similar concept for women who do not find shopping enjoyable and are also just looking for good fitting clothes (admittedly they are probably in the minority and not profitable to serve).
The thing that struck me the most was the fact Bonobos offered over 3,000 SKU’s across fit/color/size, which I could only imagine is a nightmare to manage. I was wondering if you had any insight into their inventory management practices. Do they maintain a minimum inventory quantity on hand of each SKU in their distribution center or produce more just in time (doubt it)? If its the former, isn’t it super expensive to keep that many SKUs stocked, and requires fantastic demand forecasting to ensure there are no stock outs?
Much to the point Sebastien made in the comment above, I would love to see Bonobos (or any retailer) invest in technology that would allowed us to see how the clothes they are selling look on our actual bodies. This could go a long way in making brick/mortar completely obsolete as well as reduce the number of returns.
This is a great example of how the digital transformation is touching on every aspect of our lives, including mundane tasks like buying groceries. While I conceptually love the idea of Instacart (especially because it requires a small change in consumer behavior which is key in new product diffusion), I have concerns about the operating model. Given that the operating model is extremely human capital intensive (picking out groceries, taking them through checkout, storing & delivering) I am concerned about its ability to scale in a cost effective manner- will prices increase and will service times decrease? On a separate note, I did love your idea about creating a curated recipe list based on historic data collected on the consumer. I think this nicely taps into another trend we are seeing, customization, which in this context could add a ton of value to the end consumer.
I think Memphis Meats offers one of the most innovative solutions to mitigate the environmental harm we have experienced as a result of the livestock industry. While I love how the company addresses multiple issues simultaneously (increased demand for food, animal welfare practices, and environmental sustainability), I think their product is antithetical to a major trend we are seeing in today’s market. Ask any professional in the consumer products industry, and they will tell you that consumer demand for natural / non-artificial products has skyrocketed and unlike other trends we have seen in the past, this one is here to stay for the long run. Given this I think Memphis Meats is going to have an extremely difficult time gaining a large enough consumer base to actually have a tangible impact on reducing the carbon footprint of the livestock industry. I believe at best this will be a niche product as the barriers to trial are massive in light of consumers changing preferences towards natural products. I think it’s far more more likely that we will see consumers shift towards plant based diets, which is more consistent with health craze we are seeing.
In one way Coca Cola is extremely fortunate in that their main raw ingredient is water. I say this because unlike other CPG companies who source multiple key ingredients from agriculture suppliers and thus must act on the environmental impact on their entire value chain, Coca Cola primarily has to look inwards at its own operations. Thus it is no surprise that these initiatives are focused on their own plants – which inevitably gives a perception of corporate green washing – since there is no incentive to implement water saving programs in another capacity.
I personally take no issue with the accusations of green washing, since in the end we all benefit from Coca Cola’s decreased use of water. I also wonder if there is any opportunity for Coca Cola to become an advocate of water conservation with its own consumers given their own conservation policy, which would give them credibility to spread the message.
To your point I think Nike has enough brand leverage where it can influence both the upstream and downstream in their water usage habits. I agree that working with the farmers at the start of the supply chain is extremely critical. I wonder if in addition to your suggestion of partnering with farmers to improve water techniques, Nike should force down certain standards of improvements to motivate its supplies (i.e. must reduce water usage by 10% if you wish to be our supplier). Of course I think action like this would only be more successful if key apparel players demanded it uniformly, thus reducing the risk that a supplier would just go and supply to someone else. With that said, should Nike take on the leadership role in the apparel industry of coordinating such collaboration? Along the same lines I was curious if Nike shared the color dry process with its competitors. I can see how it could be a competitive cost advantage for them, but I also think they benefit tremendously from a global reducing in water usage and thus might have an incentive to share the process with other apparel providers.
I think Tokyo is a fascinating example of how local government can have an active/leadership role in shaping a city’s contribution to mitigating the impact of climate change. I think forcing down building regulation, like the need to include “green gardens” is something all local governments should be doing, but few have. I think the reason Tokyo is more successful in doing so is because it has the buy-in of its local citizens, likely because they themselves have experienced the devastating impact of climate change via extreme weather events like the tsunami. Its unfortunate to think that the experience of an extreme weather event would need to be a pre-requisite for local citizens and then local governments to begin legislating their communities with an eye towards environmental sustainability. I am excited to see how Japan leverages the 2020 Olympics as an opportunity to educate the rest of the world and what change will come from that.
Your blog caught my attention as I was planning to travel to Iceland in the near future! I am actually quite shocked at how much CO2 (not to mention the equivalent number of trees that would need to be planted to offset it) a flight to Iceland generates. I like that Icelandic air is currently focused on building greener aircraft (it seems like an easy win), but I do wonder if some of the technological improvements necessary to make these aircraft as green as possible will increase the cost of the flight and conversely hurt their revenue. Its quite possible that they will stop short of building the most green aircraft possible and just focus on marginal improvements like wing design to reduce fuel use, given the cost/revenue trade off. Regarding your suggestion of limiting flights to only those that are full capacity, I think this will be extremely challenging if not business-suicide. I think there may be huge customer backlash around convenience, not to mention issues of getting full capacity during “low season”. This could potentially be a huge revenue loss to them and an opportunity for a competitor (i.e jet blue) to establish a dominance.