COVID – removing the barriers to digital transformation
Turn back the clock to 2019. There was ever increasing recognition that ‘digitalisation’ offered businesses unprecedented opportunities to increase efficiency, productivity, creativity and innovation. It was no longer being viewed as a tool that simply raised marginal efficiencies, digitalisation was now being seen as essential to surviving in an increasingly digital world, to remaining relevant and maintaining market share over more agile and disruptive competitors. Key drivers for digital transformation included the following:
A growing expectation amongst tech-savvy consumers for new and engaging retail experiences, enhanced personalisation, and ‘on demand’ advice and services.
Calls from employees for measures to support more flexible working conditions and tools to enable connectivity across the ‘global workplace’, whether that be within an organisation or across a wider business ecosystem.
A desire within organisations to optimize operations, improve innovation efficiency, and expedite new product development.
Amid such mounting pressure, it is not surprising that many companies were highlighting digital transformation as a key action on their business agenda. Yet despite all the talk there remained little evidence of significant implementation, and where transformations had been implemented, success rates were often low. A 2018 McKinsey Global Survey revealed that only 16 percent of respondents said their organisations’ digital transformations successfully improved performance and equipped them to sustain change in the long term. So what was going wrong? It certainly wasn’t down to a shortage of digital tools. There was continual advancement in technologies including robotics, AI, machine learning, digital twins, and augmented reality, and smart phone ownership and connectivity continued to increase across the globe. It was clear that access to technology only formed part of the solution. Companies needed other attributes to successfully implement and exploit the digital tools at their disposal. Organisational culture and structure, people skills and capabilities, training and communication to name but a few. Change needed to occur across the business from top to bottom to ensure success, but many organisations had been slow to recognise this, or not willing to make the investments and changes necessary for proper implementation. Would it be possible to make up for lost time? 2020 was to give little choice in that matter.
Last year, the coronavirus pandemic impacted commercial operations on a scale never seen before. A new business and economic environment was rapidly created that organisations had to learn to navigate. Yet despite earlier false starts, companies were quick to adopt new digital strategies and tools, in many cases with a high degree of success. A survey carried out in October of last year indicated that digitalisation of customer and supply-chain interactions, and internal operations had accelerated by three to four years, and the share of digital or digitally enabled products had accelerated by seven years. Working from home suddenly became the norm and not all companies were immediately equipped for this. Yet when there was no other option, workable solutions to support high levels of remote working were employed within an average of 11 days. As would be expected, companies that had invested in digital transformation prior to COVID-19 exhibited greater resilience than those that hadn’t, responding faster and with more confidence to the unfolding crisis.
One year into the pandemic there are many examples emerging across multiple sectors to demonstrate how digital is helping organisations ‘weather the storm’. It is clear that some companies are using digital to simply survive this period of uncertainty and await a return to normality, whereas others are leveraging digital to truly transform their businesses in anticipation of a ‘new normal’. Some examples of the latter are provided here:
Greater utilization of e-commerce
Enforced store closures and stay at home orders caused a seismic shift in consumer shopping behaviours. This triggered a sudden demand for eCommerce, a change predicted to outlast the pandemic. Companies responded by increasing access to their products and services via online channels, in some instances launching brand new eCommerce sites with astounding efficiency. For example, within just 30 days PepsiCo developed and launched two new direct-to-consumer sites. PantryShop.com offered bundles of products for specific lifestyle needs (e.g. the “Rise & Shine” bundle contains Tropicana juice, Quaker oats and Life cereal), and Snacks.com offered a more straightforward selection of Frito-Lay brands. PepsiCo’s remarkable agility and ultimate success were largely attributed to their pre-existing commitment to digital transformation.
Leveraging consumer insights
COVID-19 not only changed how we shop, but what we shop for, and it became more important than ever for companies to understand customers’ needs. Digital interactions with consumers can generate a wealth of data which, if leveraged intelligently, can provide meaningful insights on market demands, routes of engagement, brand relevance and purchasing trends. For instance, when US based floorcare company Bissell launched on Alibaba’s B2C e-commerce platform Tmall, they leveraged the platform’s analytical services to evaluate consumers’ search interests and shopping behaviours. They found that Chinese consumers were more likely to purchase chemical cleaning products and steam cleaners as they were perceived as effective disinfecting tools. In response, Bissell held live online demonstrations of these products resulting in a 500% increase in year-over-year sales of their top-selling steam mops, and overall business growth of 14% (Q1, 2020).
New approaches to Consumer Engagement
Brands and companies that used to rely heavily on face-to-face consumer engagement have had to find new ways to interact with their customers. To achieve this, Nike deployed a number of new digital platforms that were free to access including libraries of digital workouts, livestream workouts, and digital fitness challenges including The Living Room Cup where players could compete against global athletes from their own homes or gardens. John Lewis, who pride themselves on their superior customer services, started offering customers video appointments with personal shoppers to support purchasing decisions across fashion, homeware and nursery. Both examples demonstrate that it is possible to provide consumers with the all-important ‘personal touch’ and maintain a high level of engagement via virtual channels.
Digitisation of operations
It is widely accepted that digitalisation of manufacturing operations can improve the efficiency and accuracy of manual tasks, but during the pandemic additional advantages emerged including remote management and enhanced employee safety. For example, to maintain product quality, and simultaneously protect the workforce from virus exposure Unilever created ‘Intelligent Powder Towers’. An essential part of the laundry detergent manufacturing process, the new intelligent towers could be controlled algorithmically – using AI and machine learning to optimise operating conditions, a process previously controlled by manual operators. Remote operation enables personnel to manage manufacturing from home, and data generated across global operations can be combined and analysed in order to increase overall efficiency.
Digital transformation has never been more essential than it is today. Over the past year SAL have been supporting clients at varying stages of their digital transformation journey, helping them adapt to the ‘new normal’ and future-proof themselves within an increasingly digital business environment. Whether it be identifying the most appropriate digital tools, finding partners to optimise data analytics, or helping companies develop their internal strategy to implement digital transformations, SAL have both the expertise and experience to help you through this period of change, and beyond. If you would like to learn more about how we can help your business, please get in touch with us via the website www.strategicallies.co.uk, on 01442 800565 or contact John at Strategic Allies Ltd on 07974 403530, or via firstname.lastname@example.org
Author – Helen Peachey – Strategic Allies Ltd