Is Coolblue losing its competitive edge?
Coolblue, the famous Dutch online retailer of electronics, is often considered a front-runner who successfully embraced digitization and innovation. Many start-ups all around the Netherlands are looking at Coolblue, trying to immediate their information strategy, hoping to become just as successful as Coolblue is. However, serious red flags pop up when analyzing Coolblue’s strategy and perhaps we should think twice before immedating it’s strategy.
So, what are some of those red flags?
Firstly, Coolblue’s biggest competitors, Amazon and bol.com, launched their mobile applications numerous years. Coolblue only launched it’s mobile application last month (1). To make matters worse, their application is not working properly and is lacking many functionalities. Whilst statistics indicate that smartphone revenues will overtake desktop revenues by the of this decade (2), Coolblue has made a continuous choice ignoring this trend and could therefore potentially be missing out on huge amounts of profits.
Moreover, Coolblue’s competitors are transformating their business models from product-driven to service-driven revenue streams. Amazon, for example, is offering cloud-storage services and bol.com offering ebook subscriptions to its customers. Coolblue, on the contrary, is still heavily investing in traditional product-driven business models, as they expanded their own carrier services and opened up numerous additional physical stores in the Benelux last year.
Future of E-Commerce
Experts believe that adapting business models to these emergings trends is essential to survive in the e-commerce industry, where profit margins are slim and switching costs to competitors are mimimal to non-existent. Could Coolblue be making some fatal decisions when it comes to their information strategy and potentially lose its competitive edge? Will bol.com and Amazon take its place or will other players enter the e-commerce market with new, innovative strategies to outperform the fierce competition?
What do you think? Let us know in the comments
Sources:
(1) https://androidworld.nl/apps/coolblue-android-app/
(2) https://www.outerboxdesign.com/web-design-articles/mobile-ecommerce-statistics
Hi Bryan,
You make a good point. I think it is quite noteworthy that an innovative company such as coolblue hasn’t adapted to the changing environment yet, especially considering their history. Coolblue was one of the first webshops to implement iDeal and fast delivery (1).
However, I think Coolblue still has a sound business proposal. The changes Amazon and Bol.com made (cloud storage services and ebook subscriptions, as you mentioned) are not as noteworthy as it seems. Yes, these businesses are adapting to the changing industry, but their main focus is still selling products, just like Coolblue. This tells me that despite the slim profit margins and minimal switching costs, the industry is still very profitable. It is clear that that is changing, but it means that changes are not very necessary yet. The new role of companies within this new industry is not yet defined, although it seems more and more clear what it is going to be.
The companies obviously will have to choose how to adapt to the future market, but I don’t think Coolblue is making a bad decision on holding out on that choice for now.
(1) https://www.coolblue.nl/geschiedenis