AllBusiness.com |
| 3 Business Models That Are Thriving in the Digital Era Posted: 07 Dec 2019 01:20 PM PST By Krista Krumina It seems like today, thanks to the digital nature of the modern age, all that’s needed is a few mouse clicks and you could be building a new online emporium in the blink of an eye. Or, as 50 Cent so eloquently put it, ”You could die tryin’,” considering the fact that over 44% of small businesses fail in the first four years. One thing remains the same, though–you still need a good business model to ensure the longevity of your company. In other words, without a good business model, your company will not be making any money. The question is, how have the rapid technological and digital advances, including the ever-growing influence of the internet and social media, altered business models of yesteryear? And which business models actually work in this time and age? Model #1: Drop-shippingSay you wanted to sell something back in the 1950s. You’d probably have to acquire a specific set of skills to be able to make a product with your own bare hands, open a shop, and start selling to people directly. Without a doubt, you can still do that today, too. However, under the impact of technological advancements, a lot of businesses have moved online, marking the advent of e-commerce and transforming the logistics of entrepreneurship as well. Thanks to drop-shipping, you can build a storefront without needing to focus on the practical side of things—like creating the inventory, building a warehouse, or even processing orders. So, is drop-shipping one of the business models du jour? It’s definitely one of the viable options. Giants like Wayfair and Amazon apply drop-shipping in their business strategies. Still not convinced? Just take a look at the statistics. If only two decades ago drop-shipping was considered a revolutionary business model, it is now the go-to business model of nearly 33% of all online stores. Moreover, with e-commerce sales in the United States increasing nearly 17% from the third quarter of 2018 to the same period in 2019, it’s estimated that the popularity of drop-shipping will only continue to increase alongside the industry. Model #2: Profit-sharingWhen we hear "profit-sharing," we usually think employees earning bonuses around Christmas time based on how well their company is performing. That’s one way to think of it. However, there is hard evidence that it’s possible to create a completely unique business model consisting of profit-sharing and—wait for it—digital gift cards. Francesca Roveda, CEO and co-founder of SixthContinent, created an e-commerce platform that converts the advertising budget of global brands into points and credits for users, which they can use to pay for their online shopping at over 1,500 major brands including Amazon, Walmart, IKEA, Macy’s, and iTunes. The company implemented an innovative profit-sharing business model in which instead of keeping 100% of the profits, 70% are shared among its community of shoppers in the form of credits and points. This business model has helped the company become one of the fastest-growing e-commerce businesses in Europe, and the company is growing in the United States, too. Other Articles From AllBusiness.com:
Now, what makes this model succeed? The fact that gift card sales in the United States were projected to be $160 billion last year, and 55% of consumers are interested in giving or receiving digital gift cards definitely helps, too. More important, however, this model wouldn’t have worked without the internet and e-commerce dramatically changing the way people shop. More and more people make purchases online, and the number of online shoppers is expected to exceed 2 billion in 2020. This goes to show that there is still enough room for potential businesses to tap into the pool of online shopping with their own version of profit-sharing. Model #3: SubscriptionsThe New York Times, Netflix, Spotify, meal-kit company Blue Apron, lifestyle box FabFitFun, and many more … besides feeding the mind and body, what do these successful companies and startups have in common? Charging the customer a subscription fee to get access to a service or a product—aka, the subscription business model. The time when the subscription-based business model was associated with magazines and newspapers is long gone, but it’s now seeing tremendous growth in software, online services, and even service and retail industries. Let the data speak for itself. A Hitwise study confirmed that visits to subscription box websites grew from 4.7 million in April 2014 to 41.7 million in April 2018. Now is the time to tap into that market. Paul Chambers, president and co-founder of Subscription Trade Association, confirms: "This [growth] is in response to a continued shift in our buying habits. Convenience is a big factor." We love not having to go to the store to get groceries, just as much as we love having easy access to hundreds of Netflix shows for a low monthly subscription fee. It’s no wonder the subscription economy is booming. Besides, the success of the subscription business model can be directly linked to our social media habits. Not only is it easier than ever to reach the perfect target audience through Facebook, Instagram, and Twitter (which, by the way, is the main social channel for discussing subscription boxes), but social media is also a powerful driver of traffic for subscription box sites: 9.3% of referred visits to subscription box sites in the United States came from social media, whereas the typical retail site received only 7.5%. Key takeawayAdapting to the changing technological landscape takes time. Finding a business model that works in this digital era requires even more effort—however, it’s doable. Consider any one of these business models, and your company could be on the road to success. RELATED: Where Do Successful Entrepreneurs Get Their Brilliant New Ideas From? The post 3 Business Models That Are Thriving in the Digital Era appeared first on AllBusiness.com The post 3 Business Models That Are Thriving in the Digital Era appeared first on AllBusiness.com. Click for more information about Guest Post.  |
| Preparing Your Business for the California Consumer Privacy Act: Industry Experts Offer Advice Posted: 07 Dec 2019 12:37 PM PST Scheduled to go into effect January 1, 2020, the California Consumer Privacy Act (CCPA) promises to be the most robust consumer data protection law the United States has ever seen. This far-reaching, groundbreaking legislation has the potential to affect nearly every for-profit business, regardless of where they are located. CCPA: What you need to knowData breaches have become an all-too-frequent occurrence, and the cost of these breaches to companies and consumers continues to skyrocket. In fact, a recent study conducted by the Ponemon Institute discovered that the average cost of a data breach has increased by 12% in just the past five years. What's even more concerning is that at $8.19 million, the average cost of a data breach in the U.S. is more than double the global average. For consumers and businesses alike, data protection and privacy laws can't happen fast enough. From a consumer perspective, the CCPA provides California residents with the following rights:
To avoid penalties you need to know, without a shadow of a doubt, if you're on the hook to comply. Do you do business or have customers in the Golden State? If the answer to this question is yes and you meet one or more of the following, you will need to comply:
As changes to the regulation continue to take place, it's crucial for companies to stay on top of requirements whether they currently meet CCPA compliance guidelines or not. Take, for instance, proposed requirements that include:
Still not sure if you need to comply? As there is some debate about whom the CCPA applies to, when in doubt, compliance will always be your best option. Will you be ready? Time is running out—or is it?With the deadline looming, many businesses are nowhere near ready. A study conducted by Ethyca determined that only 12% of companies have achieved an "adequate state of compliance." To meet compliance standards, nearly 38% of respondents reported that they will need another 12 months. This is further complicated by the fact that 75% still rely on manual processes. What does this mean for organizations? I spoke with three experts across various industries to get their insights. With much uncertainty surrounding the CCPA and not enough detail, the rubber stamp of compliance that many organizations desire is impossible. "Compliance isn't a 'state'—companies will be riding the wave of going in and out of compliance all the time," says Mike Vanderbilt, a cyber security expert at Baker Tilly. "It's not a one-and-done project." Even if companies are just beginning their CCPA compliance journey, there are many tools that they can leverage to get their data-privacy program underway. Other Articles From AllBusiness.com:
One of the first compliance steps a company should take is to add an "opt out" policy on their website. This measure puts the organization in compliance with some CCPA mandates and sets the tone for their data-privacy program. But, building the program and putting it into effect takes resources, both human and technological, resources that some companies may not have readily available. "Some businesses may need new technology," says Elizabeth Gallagher, CRO at Lineate. "Depending on how clean and organized their data is, they may need to onboard developers or consultants to make it easier to comply with consumer requests." When it comes to technology, what will yield the best results and where should businesses start? "Companies should add automation into the equation such as case management, digital-process automation, and real-time interaction management," says Tom Harrington, Global Industry Market Leader-Insurance at Pegasystems. "Digital-process automation should be the starting point, as it mostly takes the human element and possibility of human error out of the process." To ensure compliance and mitigate risks, companies need to understand the types of requests they are receiving from consumers. "Let's say a certain request makes up 95% of the total requests," says Harrington. "This means that technology is needed to automate the resolution of this type of data request." By knowing what is needed for California requests, businesses will be in a better position to respond as more states put data-privacy laws into effect. For instance, they can use the automation done for California and adjust it to meet individual state deviations. In the longer term, businesses will need to identify potential operational issues that could result in exposure, and implement technology that can help pre-empt data events. CCPA opens the door to new opportunitiesThe impact of the CCPA will be widespread and will force a positive change in how businesses market and advertise their products and services. "Providing personal experiences relies on consumers 'opting in' to have their data collected," says Gallagher. "By simply informing the consumer that you want to use their data to better meet their needs, businesses will initiate a positive dialog. And this is key when trying to build a positive rapport." With the pressure that the CCPA is putting on how data is gathered, businesses will need to think outside of the box to target consumers and provide personalized experiences. "Because of the spotlight on consumer rights, a new kind of data collection is making an entrance: zero party data," says Gallagher. "This is when a consumer volunteers their data for a reward. For instance, a business may ask a consumer for their birthday and favorite holiday destination in exchange for loyalty points that can be redeemed for digital rewards." The CCPA will change the dynamics of how data is collected; over time we can expect other innovative methods of gathering data to become commonplace. However, marketing and online advertising aren't the only areas that will benefit from the CCPA. Organizations need to approach the CCPA as an opportunity to refresh compliance policies and take a hard look at the processes and procedures they currently have in place. Says Vanderbilt: "This is a wonderful opportunity for companies to look at what they are doing, how they are processing data, and be more transparent." For example, when a data breach occurs, how often do vendors of an organization actually inform the company? "Businesses shouldn't look at the CCPA as the mess in their basement that they don't want to clean up," he advises. "Now is the time for spring cleaning." The experts I spoke with agree that the CCPA is just the start of a nationwide phenomenon that will change the way data is collected, shared, and handled moving forward. By ending the data abuse that was sparked by the data explosion, organizations now have the opportunity to proactively reach out to consumers, promote their compliance, and actively show that they are treating consumer data will respect. And all of this will go a long way in promoting a positive brand awareness for the companies that do it well. RELATED: A New California Privacy Law Could Affect Every U.S. Business—Will You Be Ready? The post Preparing Your Business for the California Consumer Privacy Act: Industry Experts Offer Advice appeared first on AllBusiness.com The post Preparing Your Business for the California Consumer Privacy Act: Industry Experts Offer Advice appeared first on AllBusiness.com. Click for more information about Brenda Stoltz.  |
| You are subscribed to email updates from AllBusiness.com. To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment