Every good conspirator has a wall somewhere with red string linking news and people and behaviour, predicting the likely next steps.
In my line of work, we do the same with business growth. We look at (and predict) how industries have reimagined themselves into domains, crossed borders, set a vision, and pulled the levers to get there. It’s a pretty interesting exercise as far as growth paths go. It helps us spot and sketch out trends, and plan for the future.
In March, one of the world’s most valuable brands took to the stage to make a series of business announcements. Apple launched a set of new media and content ecosystems, an extension of its payment services from Apple Pay to Apple Card, and consumer controls around spend management, privacy, loyalty and cashback rewards. These announcements were all centred on partnerships, payments and taking a step (back) into the daily habits and interactions of consumers.
Imagine a deck of cards. Each card displays one of the mechanisms for innovation — the growth levers — that we’ve been seeing across many businesses. In almost every respect, Apple’s announcements drew from this set of cards one by one.
But Apple’s not the only enterprise seeking growth, or trying to maintain its relevance. Let’s see how the levers it has pulled, or the trends it’s responded to, are examples of opportunities for many other businesses trying to shape the next stage in their journey. (Needless to say, these are underpinned by an ability to deploy data and emerging technologies, including AI, at the core.)
Which of these growth levers offer an opportunity for you?
A well understood trend is the acceleration of tech giants wading deeper into financial services. Examples include WeBank (owned by China’s Tencent), Alipay (an online payment platform launched by Alibaba) and WePay (with investment from J.P. Morgan).
The opening of new digital banks under the RADI (Restricted ADI) licence framework in Australia, which is designed to allow startup banks to operate under certain conditions, and Hong Kong’s brand new virtual banking licences, are further fuel for the trend.
In the case of Apple, it has partnered with Goldman Sachs as the bank behind the new Apple Card. Goldman itself only recently shifted into consumer banking with its ‘Marcus’ proposition, which already has 3 million users.
The growth lever: It’s hard to imagine growth without core partnerships or brand collaboration. For most businesses, there’s an opportunity to partner to uplift your capability, brand or experience significantly. A recent example is the collaboration between audio company Sonos and furniture designer Ikea.1 That partnership combines audio know-how with Scandinavian design and the ability to scale, in order to bring a new speaker to the market.
The power of engaging in storytelling, emotional content and media is a trend relevant to businesses of all sizes. Increasingly, consumers want more than what websites, lists and shopping carts can offer them.
This growth lever is about sharing stories, using design and content, that allow the consumer to feel something. Sales on image-driven social commerce sites are growing — Pinterest’s annual revenue rose by 58%2, while Instagram now even lets you buy items in-app.3
Apple’s shift into games, content and news will position it more closely to consumers and tap into the consumer spending on Netflix, which doesn’t aggregate third-party sites nor does it have the physical devices that Apple has.
The growth lever: Utilise social commerce sites, stories generated by your customers, or generate your own content to engage customers as part of the product or service proposition.
Apple has powered itself into the heart of consumer engagement through its financial services role, the user data it has collected by various means, the ability to personalise based on this, and overall, a greater share of services revenues.
Its new revenue streams include more subscription services, such as Apple News+. For a monthly fee, consumers get access to 300+ magazine titles and digital subscriptions. This will keep customers in the Apple ecosystem due to daily rewards that convert to Apple Cash for use within it. Part of Apple’s announcement was Apple Arcade, the world’s first game subscription service for mobile, desktop and TV.
The growth lever: Consider the opportunities to transition from one revenue stream to another. For example, a multi-dimensional strategy that first focuses on customers, then payment, then data, etc. There are plenty of new business models to choose from, including subscription freemium, transaction, commission, and ad-driven. The subscription e-commerce market has grown by more than 100% a year over the past five years, with the largest retailers generating more than US$2.6bn in sales in 2016, up from US$57.0m in 2011.4
This is the easiest growth lever to pull: listen. Tune in to new societal norms, behaviours and trends to ensure your business is relevant.
In this case, Apple is responding to at least two public concerns:
1) financial management, and 2) privacy.
To tackle the first, it has implemented more advanced consumer spending and tracking tools. Meanwhile, Apple’s commitment to customers’ right to privacy, and its stepped-up role in educating them, is a feature of both its proposition and an ad campaign that kicked off this week.
Indeed if you didn’t note these concerns from society, you’ll hear them from the regulator.
The growth lever: Organisations should look deeply into their beliefs and genuinely bring societal relevance into their product innovation, including issues around diversity and accessibility, environmental responsibility, ageing population, public safety, housing affordability and designing for the gig economy. Examples of this include UBank’s ethos of encouraging customers to “borrow less”5, and Facebook’s range of 71 different gender options.
Easy to understand, yet often misunderstood, the real purpose of this lever is to unlock greater value for the ecosystem participants than is achievable alone. Apple Arcade is just one of the examples of Apple’s approach to marketplaces, ecosystems and platforms.
The growth lever: Think about how to create an ecosystem that is either a marketplace where consumers come to meet (and people offer, buy, sell, review), an ecosystem in which partners and components come to connect (eg. payments, game providers, identity, or logistics and supply chain), and platforms where infrastructure is scaled, such as cloud platforms, data lakes and security.
This is about creating experiences that bridge the physical and digital divide. In this case, Apple has combined new digital services with physical devices: Apple TV+, the titanium credit card design and the wireless AirPods headphones. Since Apple Card holders can apply for a loan in-store at Goldman Sachs locations, it has also leveraged a trend that sees digital goods appear in physical channels.
The growth lever: The opportunity is for businesses to combine their digital services and robotic processes with physical enablers for customers. Think about the role of stores, branches, packaging and human support teams, for example, in a digital world.
We’ve outlined a set of growth levers, though perhaps the most important consideration, before you even begin on this journey, is to be clear about why the world will be a better place when your strategy is delivered.
Consider the vision statement of a company like Nike: ‘To bring innovation and inspiration to every athlete in the world’. Ensure you have a vision that’s relevant and compelling, as it will guide you, your team and your customers, and help everyone make choices quickly. Once that’s authentic and in place, consider the growth levers that are most befitting for your business. Pull them — and away you go.
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