The digital consumer
Digital transformation is described as the ‘transformation of business and organisational activities, processes, competencies and models to enable organisations to use and exploit digital technologies to improve business processes and outcomes.’ It is fundamentally about implementing a continuously evolving and agile business strategy where staff collaborate, utilising technology to enhance business operations from which the customer ends up benefiting from. The rewards of a successful digital transformation are a great incentive as it has been found that those that have implemented a strategy across industries are outperforming their competitors financially by as much as 26%.
Customers in today’s digital world are increasingly expectant of having a personalised experience and the ability to access the products and services they want anywhere, anytime and through any channel they desire – regardless of the industry your organisation operates in – also known as the ‘Amazon effect’. With it being 6 to 7 times more expensive to attract a new customer than it is to retain an existing one, providing a seamless customer experience (CX) has been one of the main goals of many organisations, and the successful implementation of a digital transformation strategy programme can enable organisations to achieve this.
But as there is no ‘one-size-fits-all’ approach, this will look different for every industry and organisation. And the difference in digital maturity levels across different industries means that some are struggling more to stay afloat than others. Having shared this journey with many of our clients over the past several years, we have outlined the key areas that need to be considered when implementing a digital transformation strategy.
Company culture needs to be the heart of digital transformation strategy
Company culture is the most important aspect that determines the success or failure of a digital transformation strategy, and in many cases gets overlooked or pushed behind technology. At its core, it consists of the values, characteristics and behaviours that define and guide how people accomplish tasks that advance the main goals and strategies within an organisation. Digital transformation is like any major business strategy but goes deeper than just needing the backing and support of organisational leadership behind its vision, it includes the responsibility of every employee across the business to shift their approach to the way they work in order to continue to provide the best value possible for the customer.
Gartner Research Analyst Gupta even stated that“For any transformation to be successful, people need to buy into your vision. The culture aspect and the technology demand equal attention from the application leader, because culture will form the backbone of all change initiatives for their digital business transformation. Staff trapped in a ‘fixed’ mind-set may slow down or, worse, derail the digital business transformation initiatives of the company.”
Creating a digital culture needs to come from the top down and is essential to all aspects of digital transformation (strategy, structure and processes). One of the main elements requires creating an agile and collaborative work environment for employees where they feel informed and empowered to drive innovation. This requires different teams across the company to work together to achieve the company’s vision, essentially breaking down the tradition social silos of each department (technology later fits into this as well), creating transparency and openness. Having an atmosphere that permits each other to share insights (such as data) and learn from one another to meet the needs of the customer is essential for fostering a digital culture.
Evolving a company’s culture is definitely challenging and one that can often be met with a lot of fear and resistance. However, facing this head with complete transparency and regular communications can give you the best chance for success. Once your digital transformation strategy has been determined into a clearly constructed plan, communicate this across your organisation with an explanation as to why the transition is necessary. Getting everyone on-board from the beginning, including your company leadership and executives (if they are not already part of the strategy planning) can help to keep everyone focused and be more accepting of the change. Clearly define what they key metrics/goals are being worked towards. Without a transition in your company’s culture, even the greatest technology investments can fail in a digital transformation strategy.
Technology needs to match your strategy to deliver the best CX
Reviewing the capabilities of the technology that support your business processes needs to occur after your strategy has been agreed upon and your staff are on board. Ensuring that your systems are fit for your strategy’s purpose, whether it is digital only or omni-channel, and can provide a level of flexibility that allows you to easily remain relevant and evolve with your customers and business model is essential. Technology needs to be an enabler of your digital culture and transformation strategy by helping to streamline business processes, making them more efficient that support delivering the seamless experience your customers want.
A single customer view (SCV) is a powerful component in digital transformation, providing business operation benefits that provide a positive customer experience. The right technology platform will allow you to free the audience data you have collected from your different information silos and bring them together in one place, enabling the breakdown of the silos that exist within your organisation and allow for collaboration across departments that drive the innovative process. With the relevant departments having access to the same information, operations can be consolidated saving money and staff time from trying to track down what they need.
This feeds into delivering a seamless customer experience. Combining the data across all interaction points gives a more accurate view of how customers are interacting both directly and indirectly with your brand, products and services. From this data, you can build comprehensive individual profiles that make it possible to provide a highly personalised and engaging customer experience that provides value to the end user which translates into yield for the business. Having this accurate data can also empower staff to act quickly to create and/or improve upon an existing product or service that can be promptly taken to market.
John Lewis’ Digital Transformation Success
The retail industry has been noticeably hit hard by the rise of digital and the increasing demands of consumers. According to PwC, an average of 16 high street stores closed a day while only 11 opened in 2017 and this went well into 2018. PwC’s Consumer Markets Leader PwC Lisa Hooker stated said that “The British high street is undoubtedly facing headwinds but retailers are waking up to the challenge and reimagining the future. The winners will be those who are agile and open-minded in working out the best way to ensure their stores differentiate themselves and earn their place on the high street.”
This has certainly been the case with one of the most prominent UK retail brands, John Lewis, who have made a name for themselves both on the high street and for their yearly Christmas adverts. The retailer has been in operation for over 150 years and focusses their business model on the needs of their customers. In 2015, John Lewis Partnership (JLP)’s Online Director Mark Lewis said that today “John Lewis is committed to being a leading omni-channel retailer and understands the importance of providing its customers with choice, convenience and above all else a long-term commitment to customer service.” The successful implementation of their evolving digital transformation strategy has seen innovation within the industry being balanced around their traditional brick and mortar presence but has been implemented across every aspect of their business to meet the growing demands of their customers.
JLP became one of the first UK retailers to experiment with online selling launching their first e-commerce site in 1999 with only a limited selection of items. They decided to invest further into their online business, acquiring Buy.com in February 2001, and creating a four-year plan to expand the website’s capabilities and its offerings. By 2007, JLP’s online division was handling hundreds of thousands of orders even though they only accounted for 10% of their overall revenue at the time. However, with the 2008 credit crunch creating dramatically declining revenues across the industry, bringing about a major business restructuring and a shift in strategy. JLP focused on their omni-channel strategy, continuing to steer forward on the future growth of their online business and realising the importance of the face to face experience that exists in retail That same year, they became one of the pioneers of the click and collect service, which in 2017 accounted for 53% of their online customer orders and has become a standard feature most retailers have replicated.
Over the years, JLP has continued to invest in their omni-channel digital transformation strategy. These have included in smartphone and tablet experiences and apps, as well the technology that gives the company data to understand the complexity of the modern day consumer. The retailer has also worked to have a joined-up customer experience and service model that includes their shop-floor employees, investing in giving them iPhones with a pre-installed ‘Partner’ app, allowing them to easily and quickly access product information and the data necessary to fulfil the needs of face to face customer. And while the company has seen the standard profit hits and spike for the industry, their successful digital transformation has given them a high street advantage, as their CIO has stated that currently their biggest competitor isn’t another department store but Amazon.
John Lewis’ successful digital transformation is directly related to their company culture, which came from the top down rather than the ground up. Their focus was and is still is making sure their strategy and business operations were fit for purpose so that they could continuously improve the customer experience, providing convenience and value. Comparing their story to those of other department stores that are struggling in the digital world, most notably the recentcollapse of House of Fraser, demonstrates the need for digital transformation. If organisations don’t have the business capabilities to quickly respond to the needs of your customers, they will more than likely fall to the wayside regardless of which industry they are in.
Other things to consider
Here are a few helpful tips to consider when undergoing your digital transformation strategy:
- Patience– change doesn’t happen overnight, so don’t get discouraged if you don’t see the results you want and revert back to your old habits.
- Pace yourself– prioritise what your business needs are and include them in your strategy. Introduce new processes and technology at a pace that will work for your organisation.
- Be agile– allow for flexibility in your plan. Having a test and learn approach can help you figure out what is working, what isn’t and what alterations are needed to keep your plan moving forward
- Talent is key– as the digital landscape continues to change, your staff’s skillset will need to keep up. Ensure that you are investing in ensuring your staff and focus on the areas that need the most attention.
- Look to other industries– aside from looking at your competitors for ideas, learning what companies in other industries are doing with their digital transformations (success and/or failure) can provide you with more insights regarding your current position and how to move forward.
- Don’t stop– in the digital world, the transformation process is constantly evolving. This means your culture and strategy needs frequent reviewing and evaluation to ensure your end goals are being met.
How we can help
At Abacus, our mission is to help brands and communities to grow revenue and engagement with personalised offers and experiences. We have over 30 years of experience helping our clients realise the right digital vision for their organisation and deliver award-winning experiences for their audiences across many sectors, including media, retail, finance, and healthcare.
To learn how our platforms and services can help your organisation undertake digital transformation and deliver a customer-centric strategy, please get in touch.