Is the Pace of Digital Transformation Keeping Up with Ever-Changing Consumer Demands?
With the rise of the stay-at-home economy, consumers are setting a higher bar for what makes up a compelling digital experience — and many brands are falling short. 70% of consumers recently said many brands struggled to adapt their online/digital consumer experience as the digital-essential economy took hold in 2020. And now six of out 10 say online consumer experiences will be more important than in-person experiences. Which brands are going to live up the consumers’ expectations?
The answer: the ones that master these six elements of business transformation – yes, all at the same time.
The stay-at-home economy separated leaders from followers, and the current economic recovery is accentuating this even further. The leaders – such as Amazon, Apple, Facebook, Google, Netflix, Nike, Target, and Walmart – have seen their stock valuations soar as consumers’ relationships deepen based on their ability to sense and respond to digital-first behaviors. The followers, on the other hand, have struggled to create and sustain lovable experiences. They’ve been stymied by an inability to respond to changes in consumer preferences and have the right product or experience at the right time. They rely on websites and apps that may deliver a suitable experience today – but that don’t evolve with the personalization technology needed to anticipate what each might want tomorrow, for example.
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But the leaders were ready for shifts in consumer behavior in 2020 and are ready for consumer behavior shifts again in 2021. How?
By digging deeper than superficial digital improvements and mastering the six elements of digital transformation:
On the Capabilities side:
- Data: treating data (usually customer data) as an asset to be properly collected and analyzed.
- Intelligence: using AI to quickly synthesize data into insight about everything from consumer buying trends to potential kinks in the supply chain.
- Experience: drawing on intelligence to deliver a lovable, personalized experience.
On the Ways of Working Side:
- People: keeping people at the center of every experience.
- Processes: relying on processes such as design thinking and lean innovation to speed up the development of new products and experiences that rely on data and intelligence.
- Platform: investing in a nimble cloud-based platform, whether an app, site, or ecosystem, to deliver a reliable experience.
The above elements are interrelated, and for businesses to create lovable experiences consistently, they need to have the bravery to master all those elements in support of ongoing transformation, and yes, all of the same time.
Let’s look at Netflix, for example. Many industry watchers said Netflix benefitted from the shift toward digital-first living in 2020. And that’s certainly true. But Netflix also prepared for the shift. Netflix got into streaming content at a time when mailing physical discs was working just fine as a business model. And then Netflix changed its fundamental model from being a content library to a content creator. Netflix has done so by:
- Delivering a people-centered experience on a nimble cloud-based platform. The company makes important decisions such as adopting streaming as a model through its vaunted highly aligned, loosely coupled culture that includes processes that support rapid, nimble decision making.
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- Constantly mining data (usually first-party data) about consumer behaviors on its platform and using AI to learn from that data, which is where intelligence comes into play. For instance, Netflix uses AI to understand everything about consumers – ranging from anticipating bandwidth needs (which makes it possible for Netflix to deliver faster load times during peak usage) to figuring out what shows to create and then offer up to different audiences based on their content preferences. Personalizing content requires enormous effort and an engaging experience. After all, Netflix subscribers want recommendations, but they don’t want to have their arms twisted into watching only the shows Netflix wants them to watch. They just want a good experience.
Netflix is now balancing all these elements with its new Netflix.shop, which is thrusting Netflix into the realm of eCommerce by selling merchandise based on its hit shows. Netflix is partnering with Shopfiy, whose own AI is engineered to help businesses anticipate consumer trends and rapidly create new merchandise to capitalize on them.
Why do businesses fail to master the elements of business transformation? The answers are complicated, but they can range from a company’s culture not supporting agile processes to a business not developing capabilities that unleash intelligence with velocity. But the ones that get it right do so on a continuous basis. They don’t transform once and call it a day. They constantly re-examine how to prepare for the next shift in consumer behavior. That’s what the leaders are doing right now. How about you?
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