Digital Darwinism refers to the concept that only businesses that can adapt to technological changes can survive. It is a modern-day version of Charles Darwin’s Theory of Evolution by Natural Selection—only species with traits that enable them to adapt to their environment can survive and reproduce.
In the modern world, technological progress often results in the evolution of consumer behavior. If businesses cannot adapt to these changes, they are not likely to remain competitive and eventually cease to exist.
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A study by the American Enterprise Institute compared the Fortune 500 companies in 1955 and 2017. The result? Only 12% or 60 companies remained in both lists. The rest of the 1955 Fortune 500 companies had either filed for bankruptcy, were acquired by other organizations, or are simply not earning as much as they used to.
Most companies that no longer exist today may not have been able to adapt to changes in consumer behavior brought about by technological advancement. In essence, that is what Digital Darwinism is all about.
3 Digital Consumer Behaviors That Brought Companies Down
While there are hundreds of innovations and thousands of companies that failed, we cite three examples to drive the idea behind Digital Darwinism.
From Film to Digital Cameras: Polaroid Corporation
Polaroid Corporation was an innovative company created in 1937. Its founder, Edwin Land, invented the artificial polarizer that became the foundation of its products. Aside from the famous instant cameras, Polaroid also manufactured glare-free lamps, density windows for trains, and even supplied infrared night-viewing devices during World War II.
Here is a brief video showing how revolutionary Polaroid cameras were:
At its peak, the company had more than 20,000 employees and US$3 billion in annual revenue. But in 2001, Polaroid Corporation filed for bankruptcy, and its assets were sold. It may not have been able to cope with the growing shift in demand from film to digital cameras. The Polaroid Corporation brand and intellectual property was acquired by another entity in 2017 and has since been rebranded as “Polaroid.”
E-Commerce Growth: Sears and Toys R Us
While some retail companies were able to jump onto the e-commerce bandwagon, others struggled. Many retail companies suffered when consumers started buying things online. Among them are Sears and Toys R Us.
In the 1980s, Sears was easily considered America’s largest retailer, only to be surpassed by Walmart, which remains the largest retailer today. In the past 15 years, the company that owns Sears has closed over 3,500 stores.
On the other hand, Toys R Us was also the largest toy store, operating more than 800 stores in the U.S. at one point. But in 2018, the company filed for bankruptcy and closed hundreds of stores.
All these happened even before the COVID-19 pandemic. While there are other reasons for the retail apocalypse, not adapting to the new consumer behavior of online shopping could be among the major ones.
Digital Book Consumption: Borders
In the 1970s, bookstores were great places to hang out in, and Borders was among the most popular. The company went large-scale in 1985, opening several book retail stores in the years to come.
However, the Internet was born, then came online shopping. Instead of operating an e-commerce site, Borders redirected customers to Amazon, which may have hurt its brand. The next wave was the rise of e-books and e-readers. As Amazon offered Kindle and Barnes & Noble later came up with NOOK, Borders wasn’t able to catch up. In 2011, it filed for bankruptcy and closed about 400 bookstores.
Advancements in technology brought about the consumer behaviors discussed above. And the featured companies provided an example of what Digital Darwinism is and why businesses must adapt to change.