There is a belief that family businesses are behind the curve when it comes to embracing new technology in the company structure. In a 2016 family business survey, 37 percent of the next generation say they struggle to get the business to understand the importance of having a digital strategy That number rises to 43 percent in smaller family firms. (Survey). These numbers are of concern in light of the warning by Alfred Peguero of PwC US, that
every business is vulnerable in some way to digital disruption, and those who think they are immune will soon find out that this is not the case. I see this as a threat which is facing all businesses and individuals, no matter their geographical location, industry or size.”
(Family Business Survey, 2016).
This pressure to protect and grow the business is the catalyst for innovation and a new level, digital playing field for those firms that successfully embrace new tech. There are four ways the market is witnessing how smaller firms are scaling their businesses with the help of innovative technology:
- E-commerce Platforms. These online systems, when executed correctly, can merge the feel of the family’s legacy with the convenience of online accessibility. E-commerce can be a core business component, being the holy grail of retail. The platform can seamlessly connect e-commerce and in-store point of sale while also managing orders, inventory, merchandise, finances and customer service. These platforms can also add to foot traffic in the brick and mortar when providing the customers the option to “order online, pick up in store.”
- Cloud Computing. In the same vein as e-commerce, a family business can move to a cloud based system. The benefits are numerous:
- Ability to store and protect massive amounts of data;
- Implementation of automated processes, such as invoicing;
- Remote capabilities to work anywhere and anytime;
- Up to date financial performance, and;
- A big picture view of the business operations to streamline tasks.
- Digital Marketing. Word of mouth referrals have changed over the years, with more people seeking out recommendations through online sources. A savvy digital marketing scheme can scale your business. Use marketing not only to ensure a presence on social media sites and search engines, but also to steer prospective clients to a final destination: your website. Building a website involves smart landing pages, functionality on multiple devices, and user friendly features. A successful marketing campaign on social sites and an effective website can scale your family business quickly and effectively.
- Innovative Tech. Online components may be a part of everyday life, but there are new technologies family businesses are utilizing that still seem futuristic. Virtual reality and augmented reality, when used properly, have been shown to eliminate inefficiencies, improve communication, and powerfully entice customers. According to PwC, virtual reality is projected to generate $4.9 billion in revenue by 2021 in the United States alone. A fine example of a family firm utilizing this tech is fourth-generation British construction company, Wates, using VR gear for immersive client communications. (Source). Customers are able to digitally “walk-through” a space, enabling proposals to be approved more efficiently. The customer’s ability to “see” the space before it becomes a reality also allows for more precise design decisions, cutting down on supply chain waste. Augmented reality is also being used to digitally “try on” merchandise before the customer actually buys. These practices enable an enjoyable shopping experience, proficient ordering system, and more accurate inventory calculations.
Innovation is moving at a breakneck pace. If a family business can keep up and utilize new tech in its corporate structure, the opportunity to seduce customers to click the “Buy” button has the potential of scaling the family business into the major leagues.