Why Digital Transformation matters?
Is it only important to the brand?
In the previous article, we spoke about the definition of Digital Transformation and the impact of its components in the business market(s).
But, is there really a need for brands to start focusing on digitally transforming their business?
Well, yes, it definitely is. To understand it better, let’s talk about the individual impact of Digital Transformation on the:
a.Brand/Business
b.Customer
c.Market
1.Impact on a Brand/Business:
Digital Transformation allows the Brands to be on the forefront of the emerging trends and market demands.
It helps them serve their customers better.
The collective impact of developing customer experience, Digital Agility & Automation-HyperPersonalization allows the brands to attain:
i.Globalized Brand Impact:
The brands can now aim for a globalized brand impact and awareness. And increase their potential customer base from a locality or a city to the entire world.
Consider a factory that produces spoons and distributes it to a dozen distributors of a city, thus impacting the brand around the city.
With the help of the Internet though, the brand can now impact the entire connected world.
ii.Optimized investment:
With brands adopting digital transformation, the traditional investment costs such as :
a.Assumed Demand:Meaning, Brands predict the demand of their product without actual customer review and produce products based on the predicted demand.
But, with digital transformation, brands can predict the accurate demand of the products and cater to demand based production, thus,saving both operational and production costs.
Considering Xiaomi as a brand, it makes smartphones based on the consumer demand. It starts with the production of a limited number of units and sells them to the customers based on the flash-sale model.
It not only helps them build the hype around the product but the first flash sale projects an insight about the product demand among the customers.
Thus, they can increase or decrease the production units to match the consumer demand.
b.Branding investment:The brands are shifting to prioritizing customers & reviews based product development. With constant 24/7 customer connection and the agile development of products, it leads to an increase in CX which is in turn a passive investment on product marketing and increased brand value.
It is all about Time,Customer, agile production and CX.
Brands like Apple, talk about the customer experience by involving their customers into the review fold and transparently, showcasing the results of their products’ usage in the customer’s life and workspace.
This not only builds the brand’s reputation but also helps them improve their product experience towards the customer’s view point.
Apple as a brand showcases their customer’ increase in ease of life, productivity and happiness obtained from using their products rather than the technical advancements of their product.
The latest Mac Pro with the feature to upgrade just as any component in the product can be used as one of the best examples.
Here, Apple is selling the ease of upgrade yet the seamless MacOS compatibility to the customer.
Another example, would be the integration of mouse and the development of iPad OS specific for iPads to make them compete with modern notebooks and laptops.
iii.Increased Workforce efficiency and reduced operational costs:
With the automation taking care to reduce the pressure on human talent resource by placing itself where ever necessary, brands are able to achieve increased work-force efficiency and
Reduced operational costs.
The hyper-automation and personalization services also mean that the employees can focus on their designated job and also, acquire new skills (in turn an increased asset value for the company) and manage their work-life balance, leading to lesser mental health issues among employees and better work output at lesser operational costs than normal.
The reduced time and operational costs in terms of customer connect, invoicing, paperwork, production and delivery-return, payments coordination mean that the brands can focus on the product and the customer satisfaction and produce better output in a short span of time.
2.Impact on the Customer:
The customer avails the largest amount of benefits for brands adopting Digital transformation methods.
i.Increased Customer Value:
With brands being digitally connected, the consumer can express his/her opinions about the brand on a global scale targeting a global audience with the reach time being in seconds.
Thus, influencing the values of accountability and responsibility among the brands.
For example, Back in February of 2018, a consumer placed an order for an iPhone 8 worth ₹55,000 and the delivery of the product was that of a soap. Now, if it were from a physical store, proving the credibility of the customer would’ve been a huge problem.
But, with the Internet, the customer can easily voice his opinion and since, everything is connected from the calculation of the weight of the package to maximize the storage to fuel combustion efficiency of the truck and to invoicing the bill, it becomes much easier for the customer and the brand to track and rectify the mistake.
And, the reduced communication and vocal impact time of the Internet leads to brands understanding that they are accountable and responsible for the experience they provide.
ii.Increased product choice:
The customers no longer need to choose from the set of products that their local-retailer sells. They can choose from a plethora of products from different digital retailers based on the comfort of
1.Availabality
2.Maximum savings
3.Increased Product quality
4.Ease of purchase and returns
You can not just buy an iPhone but also,expand the choice to buying the variant with increased storage and color of your choice and compare the price of the same between different e-commerce brands to maximize the savings and understand the product quality based on the reviews and if not satisfied,you can return it easily.
iii.Ease of availability:
Customers can buy their products at their ease of time and comfort. The 24/7 availability of brands means the customer can place the product order at any point of time. It also is an advantage for brands where they can attract a larger audience.
For example, It’s 8pm in the evening and you’ve broken your phone and you need a phone the very next day to manage your work. You can easily order a new smartphone online via the Amazon Prime New app which offers a two hour delivery or better set a delivery at 6:00am in the next morning.
You can easily buy the smartphone without even going to the physical store.
iv.Increased transparency:
The customers can not just track their money-expenditure but also, the product and delivery status, the brand reputation and retailer reputation.
Every step of the process is digitally transparent to the customer. From the value of the brand to the contact and location of the delivery executive, everything is being pushed as information to the customer.
Consider the phone that you’ve ordered from Amazon’s Prime Now service. You can know more about the phone from the reviews section and you are even updated about the delivery status of the phone with updates from the location it was last shipped to the contact of the delivery executive and the time it was out for delivery.
3.Impact on the market:
The enormous impact of digital transformation on the business market allows:
i.Increase in global economy and market players:
Thanks to digital transformation, setting up a business and servicing consumers is easier than ever. It impacted in allowing young brands to compete with the established brands.
For example, IBM and Apple have been the market players for decades, if not years. But, brands like Xiaomi have already started to challenge major brands by being able to connect to a larger audience in the smallest amount of time by leveraging digital engagement and customer experience techniques at one thirds of the marketing investments of the traditional brands.
Thus, encouraging more young brands to enter the markets and thus, impacting the global economy.
ii.Monetary transparency:
The hyper-personalized automation techniques combined with Internet based payments and/or acknowledgement based cash payments mean the brands have decreased chances of shedding their transactions, thus helping the market regulators to understand the flow of money and restrict brands from projecting false financial returns.
Consider the same phone that you bought from Amazon and consider a situation where you bought the phone from a local factory outlet of the brand.
Since the purchase was made on a digital platform and the fact that the computers never lie, the transaction cannot be tampered by the brand to avoid taxes.
But, in case of a local factory outlet, brands can easily issue under-reported sales data to easily avoid the taxes and save money.
As a brand, would you like to digitally transform? And as a customer, which brand would you like to have digitally transformed? Let us know in the comments below.
