Introduction: Innovation On The Digital Frontier
The author's opening argument is that we are now in an "experience economy," where customers are not drawn by the simple availability of a product, or the features of a given manufacturer's version of that product: the customer can get what he wants from a number of sources, and every one offers basically the same thing at the same price with little variation.
As such, competition is on the experience. "Memorable events that engage people in inherently personal ways" are now the differentiator between one supplier and the next, the chief source of competition, and the focus of innovation.
The notion of experience is not new, just newly identified as a distinguishing factor for a given firm's offerings. The example of Starbucks demonstrates this: it's not that they offer a better or cheaper cup of coffee, but the experience of visiting one of their franchises that drives customers to purchase and remain loyal to the brand.
Innovation in customer experience is the solution of commoditization of products; and in the present day, much of the experience is in the digital media and, as preference of the online and mobile channels continues to increase, user experience in these channels will become critical to the success of failure of brands.
The Digital Frontier
In recent years, we have seen firms that understand the value of experience outperform others that seem to have missed the news, and who seen distraught and confused that the same things that made them successful in the past, their expertise at price and product competition, do not seem to be saving them.
An example of this is Apple, once a struggling maker of an unusual personal computer, now the leader in mobile computing. While competitors struggled to make their devices better, Apple focused on the "phone-using experience" to create a device that was not particularly superior in terms of its core qualities and features, but offered its consumers a device that was "a joy to use" - their focus was not on the technology of the gadget, but the value that the user could derive from using it.
The innovation of the iPhone was not only the device itself, but meticulous attention to every detail of the process. They considered the experience of shopping for a phone in a carefully-designed store environment. They considered the experience of setting up and learning to use the device. They even considered the experience of opening the box in which it was sold. And its reward for all of this consideration is not merely in increased product sales, but in the fanatical loyalty of customers whose experience of the brand is unrivalled by firms who are still focused on making a better device.
The theme of this book, along the same lines, is "thinking long and hard about using digital technology to create unique customer value." In its early days, the Internet was the great leveler, enabling small firms to compete on an even playing field with long-standing brands - and in some instances to win, not by creating a better product or a cheaper one, but delivering a superior user experience.
(EN: The author speaks in general terms here, likely saving the granular details for later - but a few examples jump to mind: Amazon trounced Barnes and Noble, Netflix destroyed Blockbuster, Dell killed a number of PC manufacturers.)
Why Digital Technology Changes the Game
The author goes off on a bit of a tare, but his chief point seems to be that the computer is a medium that engages people through their primary senses - sight and sound - in a way that can model anything they can see or hear in the real world with much less effort and expense than it could be brought into physical reality. A convincing model of a city can be created by one person in a few hours, to the same degree of fidelity, or greater, than an artist could build a physical model in a few months.
Moreover, computers can use techniques to make their models interactive in ways that a physical representation cannot be, without creating an actual prototype. Copies can be made effortlessly, and changes can be made very easily. And even further, a computer can model things that cannot be created in the real world, which can be interacted with in ways that are impossible to interact in the real world.
All of these characteristics make digital technology "the technology of experiences," and a medium through which actions can be performed more easily than they can in reality, and even performed when reality cannot deliver the same experience.
Technology is also rapidly evolving and improving - but even more impressive than the improvements in the technology itself are the innovative ways in which its present capabilities are being leveraged.
Thinking Long and Hard
Creating a unique value, one that will give a brand competitive advantage, is no easy matter: you cannot simply imitate what others have done. AS such, while this book provides examples of things that some firms have done, those ideas are likely outdated by the time this book will be published.
As such, this book does not provide solutions, but provides guidance for "your own journey of exploration" that will lead you to discover your won solutions - those that are innovative, and have not been tried before.
It will not be an easy thing to do, but if you can do it, you will be amply rewarded.