Digital Thinking — The Forces
It is not uncommon today to notice that every business is a digital business. Digital revolution has changed the traditional business strategies upside down. There are some business’ which embraced technology and the digital revolution to come out stronger like Walmart, Starbucks etc, whereas others decided to ignore it to unremarkable results (Sears, Blockbuster, Kodak).
At Knoldus, we work with a lot of traditional businesses. We help them understand the need and the advantage of digital transformation. One of our client who is a cruise industry giant understood the need for digital transformation and is making waves with their new strategy by growing their footprint and consumer connect.
A point to always remember
Digital transformation is not about technology, it is about strategy and a new way of thinking.
Consider this case, after being in print for 244 years, Britannica knew that they would be booted out soon with the onset of the internet. The information which was available in volumes of leather bounded books would soon be accessible by click of a mouse. They embarked on their digital journey and by the time they stopped printing the volumes, their print business was 1% of their business. This is a remarkable story of an organisation who knew that the customer behaviours were changing and that they had to take action.
According to Columbia business school, the 5 domains of digital transformation can be summed up as
First and the foremost in this is the customer.
The traditional approach was to produce in mass capacity and then persuade the customer to buy through mass communication. However today,
- Customer is a Networked Customer — Today’s customer is a connected customer who is connected to networks and social media. They want to interact with the business and fellow customers who influence the buy decisions. This changes the path to purchase from mass media to networks.
- Customer needs Personalization — Today’s customer is no longer swayed with the mass media communication. Personalization is the key today. Total ad spend on personalised advertisements is growing as the ad spend shifts towards digital platforms.
Thus, creating an effective customer strategy is paramount in digital transformation. The marketing funnel has changed and there is a new digital path to purchase. Core behaviours of customers that need to be kept in mind are
- How to access the customer
- How to engage
- Personalise for their specific needs
- Create a connection channel
- Collaborate with the customer
One of the proven ways to do this to build platforms and not just products on which customers can engage and collaborate. We have to keep in mind that the customer is not just the consumer on our platform but also the producer. See the platform and pipes post.
Let us quickly sum it up with a real life example,
All forward looking organisations, take IKEA for an example know that the the consumer behaviour is changing. As quoted in WSJ today,
We were convinced the need for customers to see and experience our products in person — including in our flagship stores — will remain super relevant. But at the same time, we were seeing the risk of losing out on convenience shopping. WSJ: How have shopping habits and customer expectations changed? MR. BRODIN: The change of people’s behaviour from a convenience perspective has been phenomenal. I have travelled to close to 20 markets and seen more than 50 of our stores in the past year, and I always meet the customers. The story is the same. Very often they shop on their way to work in the subway, or after the kids have gone to bed.
People have less time, but lots more people are stepping into middle-income groups and needing sofas, kitchens etc.
We are moving to being accessible beyond our stores. Being accessible 24/7 opens up an enormous opportunity for us. The growth potential is there: As soon as we step into it, the growth takes off.
Summary
First piece in your digital strategy has to be the customer. Get this right and half the battle is won. Changing consumer behaviours and the changing patterns of customer engagement given the technology convenience are paramount. They should be the cornerstones of a transformation strategy.
Knoldus has been helping some of the forward-looking organisations with their Digital vision and modern architecture for them to stay relevant and grow in these interesting times.
