Back in June, in the blog Radio Needs Second-Order Thinking, Jon Coleman introduced us to the concept of second-order thinking and how beneficial it can be for radio. First-order thinking is considering the immediate impact of the decisions we make. Second-order thinking is considering all the potential consequences of the decisions we make.
When a brand is stuck in first-order thinking, it oftentimes can’t see past its core competency. Leaders don’t leave their comfort zone. First-order thinking can stifle creativity, hamper progress and leave opportunities open for other brands.
What if Netflix saw itself in the movie rental business?
It would have never grown into the binge-centric juggernaut it is today (and would have almost certainly failed by now.)
Netflix wasn’t in the DVD-by-mail business. It was (and is) in the entertainment business. When streaming became feasible, Netflix quickly pivoted into the new form of distribution.
What if Amazon had seen itself in the bookstore business?
Yeah. Same.
Now, let’s say you own a gas station. Are you in the gas business? Or the fill-up business? Or something else?
From the moment gas stations started cropping up around 1909, gas tanks were filled by an attendant. Services performed by the attendant could include checking your oil, washing your windows, and processing your payment.
The first self-serve gas station in the United States opened in Los Angeles in 1947. While drivers could now pump themselves, it still required attendants to take money, make change and reset the pumps.
While advances in technology allowed for the progression to today’s self-serve pay-at-the-pump experience (except in New Jersey) the real game changer was John Roscoe’s addition to the fuel pumps in Denver in 1957.
The first convenience store.
Now, we live in an era in which almost every gas station is connected to at least a small shop. According to the National Association of Convenience Stores, 69.2% of all sales is gas, but that only accounts for 39.5 percent of profit. Food-related items account for 20.2 percent of total sales, but 33.7 percent of profit.
But just think about where the industry was not that long ago. Depending on your age, you may still be familiar with the dreaded “gas station sandwich.”
If a gas station had a convenience store, it probably:
- Was filthy;
- Had hot dogs that looked like they’d been there since Elvis was alive spinning on a machine that creaked like frozen pipes in winter;
- Had bathrooms that smelled like a sewage plant.
We all know there are still plenty of gas stations around America that haven’t exactly evolved.
On the other hand, there are stores like Sheetz and Wawa that have literally redefined the gas station experience.
Not just “decent” coffee that hasn’t been sitting there for hours – a barista crafting your pumpkin cappuccino.
Not just Bud Light and Milwaukee’s Best in the fridge – craft brews from your local brewery.
Clean bathrooms. Made-to-order subs. Touch-screens.
Again, just think about how far this perception had to come from 50 years of this:
It took vision to see streaming beyond DVDs, commerce and cloud hosting beyond books and a shopping experience beyond gas.
Then it took research, discipline and years of consistent image building to effectively change perceptions.
Now the gasoline industry may be on the precipice of another pivot. According to the International Energy Agency, the number of electric vehicles on the road is expected to grow from about 3 million today to 125 million by 2030.
Gas stations got the sandwiches right, but they won’t be able to rely on gas sales for nearly 70 percent of their business forever.
Where are the electric chargers?
Although there may not be a big demand for it now, gas stations can start building the image of the place to “fill up” electric cars. If this doesn’t happen sooner than later, another business will step in and become the brand specialist for electric charging stations.
Few in radio would argue that our industry finds itself at a crossroads.
While many in the industry still think of it as the “radio business,” I think most have taken the broader entertainment-centric approach of Netflix.
This expansion of thinking has allowed radio to evolve onto various platforms, streaming and now is finding its way in the podcasting space.
Gas stations used second-order thinking to see beyond the sandwich. Now, they should prepare for their next pivot.
By utilizing second-order thinking, radio can do the same!
