This year, most companies have faced unprecedented challenges to their businesses. The global pandemic has raised one critical question in particular: how can companies continue to reach customers?
The answer from many corners of the globe is by moving commerce online. Thirteen million people in Latin America made their first online purchase in March. In the US, e-commerce volumes have jumped by 49 per cent since April. China’s online grocery market is set to grow by 63 per cent this year, doubling the pace of change in how the world’s most populous country accesses its food. Six out of ten European consumers say their online buying habits will stay the same post-pandemic.
“An adaptive business initiates change; an agile business reacts to it.“
Today, there’s a race to join the online economy – one that few companies took part in until recently. Last year, 14 per cent of global retail sales happened online. Only 3 per cent of global GDP is online.
At Stripe, we support some of the most ambitious, fastest-growing companies operating online. We take a close look at how industry leaders lead and scale their businesses, as well as how an increasing number of companies enter and navigate the online economy. Thousands of businesses start on Stripe every day – a rate that’s more than doubled since this time last year.
Across the millions of companies on Stripe, we’ve noticed that adaptive businesses outpace agile ones. An adaptive business initiates change; an agile business reacts to it. We consistently see that top companies prioritise operational flexibility over speed. They execute on strategies to find new revenue streams, pursue global expansion, and partner to scale faster. According to a recent study from Forrester, firms with advanced adaptive business practices are growing at over three times the industry average.
The practices of adaptive businesses
As the global economy moves online, leaders of adaptive companies push their business to anticipate and act, so it’s less likely that their business will need to react. They take a blended approach when investing in technology solutions, gauging when to build versus when to buy. To attain and maintain market leadership, they seek out and test new business models to generate new revenue streams. Lastly, adaptive businesses find ways to overcome regulatory and technological barriers to expand internationally.
Here are these practices in action:
• Blend your technology investments. Adaptive businesses grow with the technology curve, rather than fall down it. One way they achieve this is carefully considering when to partner versus build technology solutions. After Covid-19 lockdowns began, Swedish telemedicine leader KRY experienced a 163 per cent increase in European demand for 24/7 medical access. This rate of growth can strain homegrown technology, especially if it’s built to meet current needs versus operations at hypergrowth. User experiences can suffer and technical infrastructure can buckle. Stripe helped KRY maintain uninterrupted patient onboarding, reliable payment processing, and a consistent user experience during its unprecedented period of growth.
• Initiate new business models. Adaptive businesses seek new ways to generate additional revenue – for upstarts and market leaders alike. In 2017, retail giant Target added a new business model to accelerate its e-commerce sales. It acquired Shipt, powered by Stripe, to build out its online presence and same-day delivery services. Target could not have anticipated the pandemic, but it wasn’t caught off guard by it. Since February 2020, Target has seen a 400 per cent increase in online sales, and is currently one of the top 10 e-commerce companies in the United States.
• Aggressively enter new markets. International expansion and growth fall prey to regulatory complexity, a byzantine global financial system, and limited engineering bandwidth. As the global economy moves online, adaptive businesses choose platforms with global infrastructure to handle local differences, instead of treating each new country as a standalone project. Shopify, for example, empowers any small business to create an online retail presence. By partnering with Stripe, it gives its customers access to local payment methods in dozens of countries, rather than needing to develop a completely new payments infrastructure for each new market it enters.
Build an adaptive business
The way we interact and transact in the world is evolving rapidly. The next generation of market leaders will be companies that are able to anticipate and act before the pace of change accelerates. Stripe powers millions of adaptive businesses, including 40+ category leaders with more than $1 billion in annual payment volume on Stripe in more than 135 currencies with technology to simplify global expansion, optimise payments infrastructure, and add new business models and revenue streams.
There’s no one way to grow an adaptive business, but these three strategies can help. Adaptive businesses must invest, partner and expand to anticipate future customer needs and stay relevant. For more examples of businesses leaning into change and global growth, reach out to our team at Stripe. Our mission is to increase the GDP of the internet, and now more than ever, we’re helping business leaders with an adaptive mindset realise the opportunities ahead.
About the author
Jim Stoneham is Chief Marketing Officer at Stripe. Previously he led Marketing and Growth at New Relic, and has spent his career creating and scaling businesses at companies such as Apple, Yahoo, and numerous high-growth startups. He holds a Bachelor of Fine Arts in Photography and Graphic Design from the Rochester Institute of Technology along with post-graduate work at the Berkeley Haas School of Business.
by Jim Stoneham, CMO, Stripe