Value Shifting - Business Insider

They're examples of what could be called “value shifting.” Value shifting happens when the thing(s) which used to represent the most value ... 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H M S Inthenews Closeicon Twocrossedlinesthatforman'X'.Itindicatesawaytocloseaninteraction,ordismissanotification. Chevronicon Itindicatesanexpandablesectionormenu,orsometimesprevious/nextnavigationoptions. HOMEPAGE 0 Newsletters Accounticon Aniconintheshapeofaperson'sheadandshoulders.Itoftenindicatesauserprofile. Login Subscribe Home Chevronicon Itindicatesanexpandablesectionormenu,orsometimesprevious/nextnavigationoptions. StrategyContributors valueshifting DeniseLeeYohn, BrandasBusinessBites 2010-11-30T12:50:46Z SaveArticleIcon Abookmark FacebookIcon TheletterF. Emailicon Anenvelope.Itindicatestheabilitytosendanemail. Shareicon Ancurvedarrowpointingright. Twittericon Astylizedbirdwithanopenmouth,tweeting. Twitter LinkedInicon Theword"in". LinkedIn Fliboardicon AstylizedletterF. Flipboard FacebookIcon TheletterF. Facebook Emailicon Anenvelope.Itindicatestheabilitytosendanemail. Email Linkicon Animageofachainlink.Itsymobilizesawebsitelinkurl. CopyLink Downloadtheapp Redeemnow WhatdoFordandDeltaAirlineshaveincommon? Morespecifically,whatdoesthefollowingadforFord’snewEdgeandanannouncementbyaDeltaSVPaboutimprovementsattheairlines’LaGuardiaterminalhaveincommon?They’reexamplesofwhatcouldbecalled“valueshifting.” Valueshiftinghappenswhenthething(s)whichusedtorepresentthemostvaluetopastconsumersisreplacedbysomethingelsewhichtoday’sconsumersvaluemore.InFord’scase,consumersusedtovaluethepower,safety,orqualityofacar;now,iftheEdgeadandotherslikeitfromotherautomakersareanyindication,thosethingshavebecomelessimportant.Thevalueinautomotivehasshiftedtotechnology. AndsotheEdgeaddoesn’tpromotethecar’shorsepower,fuelefficiency,orsafetyfeatures(allofwhicharesuperiortothecompetition)–insteadtheadshinesadramaticspotlightonMyFordTouch,thetechnologyplatformwhichintegratesphone,entertainment,climatecontrol,andnavigationintoaneasy-to-usevoice-controlledsystem. Whatoncemighthavebeenofferedasanancillaryupgrade–e.g.,a“technologypackage”–isnowthefocusoftheentirecarpromotion. Prettyremarkable.EquallynoteworthywasthatwhenoneofDelta’sexecutivesspokeasacorporatesponsorofaglobalbusinessconference,hechosenottotalkabouttheairline’sBusinessClassserviceoritsexpandedroutes,oreventhecompany’sstrongprofitability. Butrather,hetooktheopportunitytoaddressover4,000businessleadersaboutthenewfoodofferingsattheairlines’terminalatLaGuardiaairport. AndjustthisweekDeltaannounceditisrollingoutanotherfood-relatedserviceenhancementatJFKandLGAwhichallowscustomerstoordermealsdirectlyfromAppleiPadkiosksstationedneartheirdeparturegates,withdeliveryguaranteedwithin10minutes.Thatanairlinecompanywouldinvestbillionsofdollarsonimprovingthein-airportexperiencesuggeststhevalueofairtravelhasshiftedfromtheairtotheground. Valueshiftingusuallyisaresultofcommoditizationorinnovationorboth.Whenacategorymatures,differentiationbetweencompetitorsdeclines. Everybrandseemstobeofferingthesamethingandsoconsumersstartmakingpurchasedecisionsbasedonprice. Tooffsetthiscommoditization,companiesoftentrytodivertresourcesandattentionfromthethingswhichnolongerdifferentiatetothethingswhichdo.Isuspectthatthisiswhat’sdrivingDelta’sfocusontheairportexperience. Mostofthetravelingpublicwouldagreethereislittlediscernabledifferencebetweentheseats,food,andserviceofdifferentdomesticairlines. Pricehasbecometheprimarybasisforchoice.Assuch,DeltaisattemptingtoshiftthevalueofflyingDeltafromthepriceofanundifferentiatedin-airexperiencetoanon-the-groundairportexperiencethatdefiespricecomparison. Promotingtheairportterminaldevelopments,RickBlatstein,CEOofOTG,Delta’sairportterminalpartner,explains,“Wearegivingtravelersaone-of-a-kindexperiencebybringinggreatfoodandbeveragesfromworld-renownedchefstothegatearea.Bycombiningcuisinewithinnovativeseatingandorderingtechnology,weareofferingatrulyuniqueairporttravelexperience.” InnovationisprobablythedriverbehindFord’seffortinvalueshifting. Developmentsindigital,mobile,andwirelesstechnologyhaveexplodedinrecentyearsandsonowwhatusedtobeaveryexpensivepropositionforverylimitedcapabilityhasnowbeenmademucheasierandmoreaffordabletooffertoconsumers. Thesenewcapabilitiesdrasticallyimprovethecardrivingandowningexperience,soitmakessensetoattributemorevaluetothecar’stechnology.Butvalueshiftingdoesn’talwayshavetobearesponsetoachange. Itcanbearesultofacompany’sproactivedecisiontochangepeople’svalueperceptions.Afewexamplesofproactivevalue-shiftingcometomind,someofwhichalreadyexist: -   Packagingwhichmakeseatingabighamburgeron-the-goeasyshiftsthevalueofferedfromtastetoconvenience -   Retailerswhichentertainoreducateshoppersshiftthevaluefromproductstotheexperience -   Applianceswhicharesoldwithanautomaticupgradeserviceshiftthevaluefromthesinglepurchasepricetothetotalcostoflifetimeownership -   Fitnessclubswhichsellservices,devices,andcontentallaccessedthroughmultiplechannelsshiftthevaluefromthein-clubexperiencetoalifestylechange -   DesignerconsumerelectronicsgadgetsshifttheirvaluefromfeaturesandfunctionstostatusandstyleCanyouthinkofothers? Letmeknowbyleavingacomment,becauseitwouldbegreattodevelopalistofvalue-shiftingthought-starterswhichcompaniescouldreferto. Challengingcategorynormsbyusingvalueshiftingtoshapevalueperceptionsenablescompaniesto: engageconsumersonemergingorunspokenneedsestablishstronger,moresustainablecompetitiveadvantagegrowthroughanewinnovationplatform SignupfornotificationsfromInsider!Stayuptodatewithwhatyouwanttoknow. 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