I was recently invited to speak at the three-day Distree Asia Pacific event on technology and business model disruptions and their impact on tech distribution, where I spoke with tech vendors, consumer electronics (CE) giants, tech distributors, retailers, and e-tailers from across Asia Pacific. We discussed various topics, including the channel scenario for the coming two to five years. Based on these inputs and my understanding, I believe that the traditional IT channel, including consumer-focused distributors, will soon disappear unless its current business model changes. Here’s why:
Direct market resellers (DMRs) and e-tailers are taking the flab out of the traditional channel. Although a large number of consumers still prefer to shop offline, increasing consumer confidence and further adoption of online payments in Asia Pacific mean that more and more DMRs will establish their presence on the Web, targeting consumers with low-cost products. eCommerce sites like Lazada are trying to build an Amazon-like model for Southeast Asia. The entry of nontraditional players such as government-owned Indian Railways,which recently launched its own eCommerce retail marketplace in India selling electronics and IT products, is also disrupting the traditional channel ecosystem.
2D bar codes are on buses, in newspapers and magazines, storefronts, product packaging, store shelves, bus stops, mailings from political candidates, and subways. Retail stores like Best Buy, Home Depot and Lowe’s have corporate programs for 2D codes. Honestly, it is hard to name a place that I haven’t seen a 2D bar code. Hard to say if there are more codes — or more consumers scanning the codes. I think it is the former. As with many things mobile, this is more of a supply-side-driven phenomenon than demand-side.
Why are there so many codes? They are one of many mobile technologies that facilitate the connection of consumers to relevant content when they need it. Scanning bar codes simplifies the experience of discovering content or initiating an action on a cell phone like sending a message or adding a contact to a phone. Brands are doing all they can to educate consumers about what codes are and how to use them. Budweiser, for example, has designed an entire TV commercial around tags from Spyderlink on its Bud Light cartons. See the video.
Plastering codes everywhere, however, is working — adoption among US adults has increased from only 1% last year to 5% this year. Adoption among smartphone owners is three times that. While adoption is relatively low today, the strong growth in usage of the codes by brands and consumers alike indicates a bright future for brands looking to deepen their engagement with consumers. Bar codes don’t facilitate just marketing — they will be used 360 degrees around a customer’s journey — from branding or consideration through to purchase and replenishment.