• Christian Garcia

The Diffusion of Innovations Theory: Where Does Your Business Rank?

As people emerge from their “quarantine shelters” following the expiration of many of the state’s shelter-at-home orders, many are greeted with a completely different business landscape. The businesses who successfully weathered the storm are slowly reopening, and many people are returning to jobs that are completely different than the ones they entered the year with. If there were any doubts about the efficacy of E-Commerce and digital marketing, they, along with the stubborn businesses who were unwilling to adapt to the changing times, are casualties of the global pandemic.


In the same vein as life, death, and taxes; technology not only acts as a permanent fixture of human life, but also as the standard-bearer for ushering in the future. Esteemed scholar and author Everett Rogers understood this as he grew up on a farm where new equipment and chemical innovations were used to maximize crop harvests. Rogers is most commonly known for his book Diffusion of Innovations, where he outlines a theory around how people adopt new technology. In his model, he outlines five main groups:

Innovators

Early Adopters

Early Majority

Late Majority

Laggards


These five groups accurately summarize consumer and business behavior when adopting new technologies. As we dig deeper into each of these categories, ask yourself the question, “Where does my business fall on this spectrum?”


Innovators


Innovators make up the smallest percentage of all the groups in this chart. Companies in this group have a long history of success, which gives them the ability to take a few losses in the pursuit of striking gold. These people have direct contact to scientific sources and often fraternize with other innovators to come up with new ideas. This group has high risk tolerance, and often suffers the most defeats, yet the wins are much larger in scale.


Example of Success: Amazon

Amazon is one of the first companies to take a completely digital sales approach, and it has paid dividends over the course of their history. Funnily enough, Amazon has begun opening pop-up shops, as well as buying Whole Foods to bolster their brick and mortar presence, but the company backbone lies in their retail approach, which has gone on to help fund other successful products such as Amazon Web Services and the Echo product line.



Example of Failure: Microsoft Zune Marketplace



Microsoft is the creator of the world’s most used operating system in Windows, the standard for word processing with Microsoft Office, and a titan in the video game industry with the Xbox. While these jewels are brightly displayed in the software company’s proverbial crown, there are dozens of other projects that did not experience the same level of widespread acceptance. Enter the Microsoft Zune. The Zune was branded as an iPod competitor and was paired with the Zune Marketplace; one of the first subscription-based music streaming services. While we all know and love the services of Apple Music and Spotify today, Zune was offering subscription based services long before either of them did. In fact, with the retirement of the iTunes store, Apple has completely shifted over to the subscription-based model. So why did the Zune fail? Often with innovators, having competition is key to convincing people that they actually need your services. Subscription-based music was not a hot item in 2011, and this along with ineffective marketing and a late arrival to the marketplace spelled disaster for the Zune. In the example of the music store services, Zune Marketplace was an innovation that people just weren’t ready for yet


Early Adopters


Early adopters make up the second-least populated group in this model, yet retain a great deal of thought leadership that people follow. These people may not be creating anything new, but they are close to those who innovate and often are seen as evangelizers of new technology and trends.


Example: Instagram Influencers


Instagram influencers make up a new group of early adopters following the rise of social media. With large audiences and direct access to the innovators of the world, influencers are able to adopt new technologies, goods, and services, and often help to create a more widespread acceptance of these things.



Early Majority


Representing the highest percentage of people, this group statistically hops on to new trends before the rest of the world, yet they are not viewed as thought leaders among their peers. They do however gain the benefit of seeing products as successes before completely hopping on board with new ideas or practices. What separates this group from the Early Adopters is the time it takes to make the change.



Early Majority Example: Early iPhone users


When the iPhone was announced way back in 2007, the public reaction about the device was split. Many people loved the idea of the device, while others were unimpressed and saw no reason to combine all the features into one device. It is interesting to note however that the iPhone sits at an interesting crossroads of technology. Apple did not introduce anything new to the handset marketplace, but the combination of internet, music, phone calls, text messaging, and photo capture in one device is what truly marked the innovation. This is a fairly simple example; those who hopped on the trend early would be considered the early majority.



Late Majority


Tied with those in the Early Majority category, the late majority represents the beginning of those who arrive later. These people may be exceptionally risk-averse, but are often just resistant to change. Economic necessity drives the decision making of this group rather than the desire to modernize.


Late Majority Example: Amazon Fire Phone


Amazon tried to enter the crowded smartphone marketplace with the Amazon Fire Phone in 2014. The device failed due to a number of reasons, including a lack of popular app support upon launch, no killer features, and an elevated price point that ruled itself out when compared to the iPhones and Samsungs of the world. Had Amazon entered the smartphone business earlier, they may have had more time to iron out the issues. However, because they entered so late, the Fire Phone burnt out quickly. While we would still consider Amazon to be an innovator, this is a prime example of how their late entry into the smartphone business represents a late majority adoption.


Laggards


This group is the most resistant to change and slowest to adapt to new innovations. These companies may at one point have been part of the left side of the curve, but have stuck with older methods of success in the face of newer, better ideas.


Laggard Example: Blockbuster


Blockbuster is often lauded as the poster boy for laggard companies. While Netflix was starting their DVD delivery service in 1999, Blockbuster had the opportunity to purchase the fledgling business for a measly $50 million. As the story goes, Blockbuster CEO John Antioco laughed Netflix out of the room, saying that Blockbuster was here to stay and that Netflix would never catch on. Their inability to adapt to the future, namely, DVD delivery and ultimately online streaming, bankrupted Blockbuster in 2010 after attempting to mimic the DVD-by-mail service that was popularized by Netflix.





Where do you as a company fit into this matrix? As e-commerce continues to rise and business becomes more digital, social media marketing strategies are more important than ever to promote your brand. Contact Bloom Social Marketing today to learn more about how you and your business can be an early adopter of a complete social media marketing strategy.


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