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Every quarter sees its share business results. Among them, the stars who combine higher revenues, customers, market share, becoming the entities that the press does not know name other than “juggernaut” or “giant” of the Net.
Google, Amazon, Facebook and Apple are one continent alone, observers have come to mean an acronym as dull effective: the ‘Gafa’. If these four superstars are the winners of the digital economy, it is no coincidence, says the agency Fabernovel in a study published this fall, with free access, November 25: they operate on common principles that is, explain the authors, replicable and adaptable by other companies.
If Gafa are the champions of the capture of value, because they are developed outside the traditional model says the study. This model assumes that we must invest time and money to develop a product, put it on the market and defend against competition. The Gafa chose to run in reverse. Noting that products and services are all potentially replaceable, they deduced that the only thing that really matters for their development is the customer. The old joke is to say that “if it’s free, it’s that you are the product” is not a fantasy: “all decisions by Gafa aim to win and retain customers “, say the authors of the study.
To do this, simply save customers time and facilitate their daily actions. This approach, sometimes called, usually pejoratively, to “solutionnisme” is to think that for each friction life every day, there is a solution, either a service or application. And above all, that it is virtually costless. As the product is generally a simple need, concrete and well identified, its adoption is strong and fast. According to calculations by Fabernovel the Gafa now occupy 55% of our “digital day” (e-mail, online shopping, listening to music, etc.).
Sacrifice income, gain market share
The free is not an issue, at least not at first: this economic model typically involves the sacrifice of income and short-term profits. Quite a snub to Wall Street, which regularly punishes low profits generated in particular by Amazon, which reinvests most of what she earns. If part of the industry experts, citing the young age of Gafa, believes the bet will pay off in the long run, others consider that this position is not tenable and that he’ll have a day or another that these companies report strong profits and pay dividends to investors. The conservatism of the markets he will win in the end?
If it is perplexing both economists and users, free (91% of applications on iOS, Android and 85%) is considered as a powerful lever for achieving a significant retention of customers, and accentuate the impression of a “brand positive experience”: if part of the proposed service is free, consumers will more willing to pay for the rest. Another advantage of free allows the multiplication of points of contact with the consumer, and thus the data collection, valuable for the analysis of consumer behavior.
Fabernovel cites the example of the manufactured and sold by reading lamp Amazon, the Kindle. The object itself is sold at a loss, but calculations show that it becomes profitable after five months of average use: Amazon loses on the container, but – largely – win over content. The “Gafanomics” show that the value of an object is not intrinsic, it changes with time and use.
In addition, these companies do not intend to stay on one activity .dropoff window Pay with iTunes and Apple, Apple is making headway in the online payment, Amazon is developing a large selection cloud for businesses and Facebook was launched, with the purchase of Oculus Rift in the virtual reality. And some of these new activities – including cloud for Amazon – are much more profitable than the old ones. The movement is supported by high investment (80% of the Amazon is fed cash) and regular acquisitions (the Gafa were involved in a third of mergers and acquisitions in the digital between 2012 and 2014).
Read also: Amazon sinks into the red and worries investors
Even better, Gafa do not hesitate to invest in other community businesses: Google shares in Uber, Airbnb Amazon in … Way to show they are not afraid of each other, even if the logic of “winner takes all” (the winner takes all ) was never so true.
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