What is digital? There is no single answer to this question. ‘Digital’ takes many forms and digital initiatives are only a subset of the overall strategy. For example, in fashion and apparel, digital may be a virtual try-on application or online closet – different from what a financial institution might implement. Before embarking on a transformation journey, the key to building and applying a digital strategy is understanding the underlying principles and areas where digital can impact your business. It’s critical to understand the following:
1. Digital is NOT a channel – Many organizations view ‘digital’ as something you add to an existing business. Not long-ago brick and mortar retailers could be forgiven if they confused digital transformation with the introduction of an eCommerce initiative. They wanted to maintain the old ways of doing business while bolting on a “digital” side to their business. This approach creates additional IT and marketing activities and leads to competing silos rather than a fluid, cohesive organization. Avoid this mindset
2. Digital is not more, it is different – Consider the overall structure of your business. Digital might have an impact on the levers that drive your overall business model. Look at how Netflix has changed the way entertainment is distributed or how Rent the Runway is transforming the way women shop for dress-up events. Digital within the context of fashion doesn’t mean brands will stop selling clothes but it may change the way those clothes are sold. This means you need to be “open to reexamining your entire way of doing business and understanding where the new frontiers of value are.”
3. Digital is about customer experience – While digital is not merely a new channel strategy, it will have implications on the way you interact with customers and communicate your value proposition. Customer journey mapping, omnichannel strategy, and mobile-first design are smaller initiatives within the broader digital customer experience discussion.
Then there’s larger initiatives such as artificial intelligence, which has the ability to help brands and retailers with predictive forecasting, capacity planning and merchandising. This means that consumers can enjoy the benefits of better product availability and faster, more accurate deliveries. In addition to supply chain benefits, AI also can help create a smoother browsing experience and improve customer retention through personalization.
The highest hurdle executives will have selling their organizations is that there is no end-game. The playing field is always shifting, and customer expectations will follow emerging trends. The key is to develop an iterative process, so your customer touch points can evolve with those expectations.
4. Digital is about culture as much as capabilities – The most successful digital transformations in recent years are the ones that have changed not only internal capabilities (technical) but also how an organization works – and how customers interact with the brand. The hallmarks of a digitally mature organization are:
- The ability to deliver quickly – the organization is right-sized for responsiveness. In other words, it can support the business with processes rather than being built to support the operations themselves.
- Good enough – trying to build systems, capabilities, or customer experiences that are perfect for the existing business firmly plants your feet in the present. You’ll be out of date before the project is even finished. The preferred approach is to develop capabilities that allow meaningful iteration and improvement on a regular basis.
- Value-based decision making – every business has internal stakeholders with a laundry list of projects they’d like to complete. Prioritization should be objectively based on the incremental value they bring to the company either through enhancing digital capabilities or customer experience.
- Comfortable being uncomfortable – with speed as a goal and an understanding that the process is never finished. Remember, digitally mature organizations will be comfortable not having all the information and knowing the roadmap could change tomorrow. They can afford to make mistakes because they can correct course quickly.