2017 has witnessed some of the best and worst digital transformations, but it is important to understand the reasons behind each one.
To engage with 21st century consumers, household brands face no choice but to adopt a digital transformation strategy. However, there are challenges: research shows that organisations are likely to fail within four years if their digital transformation is unsuccessful, which is worryingly the case for as many as 84% of companies. 2017 has provided numerous examples of the difference a successful transformation can make – yet just as brands such as Starbucks and Domino’s have flourished, others like Jaeger have paid the ultimate price. The fact is, an air tight digital transformation strategy is now the difference between success and failure – so what can 2017’s examples teach us?
Remember your audience
One of the key lessons of successful digital transformations is to remember who a transformation should ultimately benefit – the end user of a service, whether a customer or worker. By taking a customer-centric approach to its transformation Starbucks did just that, making it one of the most successful digital transformation cases in food and retail.
By eliminating the old-fashioned loyalty card and shifting to a mobile app, Starbucks allowed customers to earn and redeem their loyalty points without having to carry and manage multiple cards. The app was such a success that it’s currently used by 12 million customers in the US alone.
Starbucks also launched its Mobile Order & Pay (MOP) feature, allowing customers to order drinks in advance and pay directly through the app – eliminating waiting times and cutting staff costs. Also by looking to develop pre-paid accounts, Starbucks are continuing to use its agility to innovate and respond to changing trends quickly. Similarly, organisations need to remember that the end user has to be the end goal of any transformation. If you can’t truly engage with the customer, using data to create truly exciting and personalised experience, maybe it’s time to consider a more forward-thinking approach.
Domino’s was also swift to embrace the digital revolution. By 2015 its digital revenue far surpassed store-generated revenue and by 2016, 60% of total US sales were generated through mobile devices. Much like Starbucks, Domino’s tapped into the loyalty factor and launched its ‘Piece of the Pie’ rewards scheme within its mobile app. Domino’s also launched PULSE – its proprietary point of sales system – which has automated many routine tasks such as pizza tracking, driver routes and custom online pizza ordering. Domino’s Anywhere app allows customers to order 13 million pizza combinations from almost any connected device and even allows customers to place orders using text messages, Twitter or Facebook messenger.
Domino’s has demonstrated that, increasingly, a digital transformation means a mobile transformation. For this to succeed, organisations need to ensure that their mobile offering is always-available, giving the best possible performance and allowing customers to interact and engage with the brand in some way even if there is no signal.
Too little, too late
As we have seen, having a finger on the pulse of trends and expectations is key to success in the digital world. Fashion retailer Jaeger, which was hugely popular in the 1960s, is an example of what can happen if a business falls behind the times. By the 2000s Jaeger’s reputation was old fashioned and it lost touch with its audience – meaning, in turn, it couldn’t identify what they needed from the business. A lack of modernisation meant Jaeger’s systems had become old and clunky, with customers and staff struggling to perform straightforward tasks.
By the time Jaeger hired Cathy McCabe as CIO, charged with leading the company’s digital transformation, it was too late. The public were disengaged, and the company paid the ultimate price in April 2017 when it went into administration mid-way through its digital transformation. Jaeger teaches us about the ever-present risk of complacency and the need for constant innovation. It’s not enough for an organisation to assume its digital offerings are “good enough”, nor believe that the job is done once a problem is fixed. Instead, organisation must constantly review how best to engage with its customers and make continual improvements to their services. Companies that fail to do this, or that waste too much time trying to be perfect, will be left in the dust by more agile competitors.
An unhealthy attitude
Digital transformation isn’t only a matter for private business – the public sector is equally rife with success stories and failures. For instance, The NHS’s new Childcare Service website experienced multiple issues this year, with parents unable to claim their childcare payments. Parents were left unable to access their accounts and, due to increasing demand, the Government suspended plans to roll out tax free childcare funding to older children so it could manage the number of parents using the service.
Organisations need to remember that a new service that behaves perfectly in testing and development also needs to perform when released into the wild. Using technology that can scale with demand – whether the business expects hundreds or hundreds of thousands of users – will ensure that an expensive digital transformation project doesn’t result in embarrassment when it meets the public.
Look to the future
2017 has taught us that if businesses are to succeed in this ever-evolving landscape, they need to listen to their customers and respond accordingly. Equally importantly, they need to be agile, look to the future and adapt at speed by using scalable, modern technologies, prioritising agility over perfection. Whether we like it or not, digital is here to stay and unless businesses embrace it and truly engage with their customers and workers, they will not be able to compete.