The customer’s no longer who she used to be, so why are you the same?
A large number of businesses have found themselves struggling to cope with customer expectations in the era of digitization. The primary issue has been their inability to reimagine their offerings and rethink their digital strategy in line with this new, hyper-connected breed of end users. Although business leaders often talk about how they need to change the way they serve the customer and emphasize their vision of placing the customer at the center of the value chain, it is easier said than done. The only thing we know for certain is that there is no denying or stalling digitization. The question that remains is: how do we really get there?
Survival of the most adaptable
We are at the crossroad of a technological epoch. An avalanche of technologies, like artificial intelligence machine learning computer vision and IoT have begun to converge and mutate to form hybrid solutions. The retail industry has led from the front in terms of disrupting business by adopting a digital strategy incorporating these technological mutations in its digitization journey. For example, Walmart’s low-key acquisition of Spatialand, a specialist in VR tech, is testimony to the seriousness with which the retail behemoth takes the importance of a nascent technology. Walmart understands as part of its digital strategy that keeping up with the customer experience revolution requires cutting-edge technologies. And adopting any means of defining this transformation is a victory for traditional businesses looking for a digital makeover.
Consider Amazon Go and how this digital strategy addresses the specific pain point of long checkout queues. While the tech behind the endeavor is almost magical, it’s incredible to see how the customer experience changes completely when a single step is skipped. In fact, a survey indicated that 70% of buyers prefer buying from a retailer who valued their time. Amazon gave these buyers exactly what they wanted.
And the ambivalence of the retail businesses wondering if they can wait out these trends could result in shortened shelf life. Warning examples include Circuit City, an erstwhile iconic electronic seller that went out of business thanks to an inability to respond to digital disruptions and launch a digitization process.
The product gets a digital makeover
The retail business is just one part of the tech invasion. The products themselves are changing as part of the digitization process. Take the wristwatch industry for instance. Since its inception, it has barely seen one or two major disruptions that were centuries apart. Today, with wearables becoming part of the technological singularity obsession, the once-ubiquitous wristwatch faces a struggle for its very existence. Tag Heuer, the Swiss watchmaker, realized this early and has collaborated with Intel and Google to come up with smart watches. In spite of Apple’s first mover advantage in the smart watch category, Tag Heuer is likely to have takers for the brand loyalty its customers have shown over the years and its brand personality that is upmarket and fashionable. With niche players like Frederique Constant joining the race, wearable tech, already mainstream, may soon find itself the subject of fashion reviews.
The service transforms
Customer expectations from the service sector also transformed as we moved into the ‘anytime, anywhere’ ecosystem. With zero tolerance for delays and steadily diminishing attention spans, the modern, hyper-connected customer expects experiences that are seamless across channels, instant, and intuitive. And while the internet and its spin-off technologies abet and enable these behavioral patterns, sectors such as telecom find themselves scrambling to adjust their pricing and operational models to this change.
And as yesteryear giants like Kodak, HMV, and Blockbuster make way for digital prodigies like Netflix, Amazon, and Uber, Jack Welch’s words ring truer than ever: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near." For the service industry, this digitalization of business brings with it worries on data security, privacy, and the need for hardware upgrades that create some serious cost pressures.
A bumpy ride for the large fish
With information at their fingertips, the modern customer is better informed than any customer has ever been in the past. And these digital natives demand not only the right product at the right time, marketed the right way, but for organizations to evolve and readjust the pace at which they change their minds and preferences.
For larger organizations, however, keeping up with this dynamic business environment can be challenging and sometimes impact the very foundations on which they were built. To adopt digital strategies that cater to a new generation of customers, established organizations need to confront internal and legacy hurdles that are a mix of human factors and technology. They may not always have a clear, holistic vision on their digital and GTM strategies for their offerings.
Despite having the right technologies to help capture the massive amounts of data generated by customers, a number of global corporations find themselves wanting when it comes to drawing meaningful insights from this data. This clear gap in gathering vs. leveraging data is almost synonymous with legacy technology stacks and outdated processes that continue to haunt large modern enterprises today. Unfortunately though, these organization have traditionally suffered from a higher churn rate of CIOs and CTOs thanks to the lack of buy-ins from internal stakeholders and IT product failures.
Rethink, reimagine, reengineer
A lot has changed over the last decade but the fundamental challenges and aspirations of businesses aren’t all that different from the past. While digitization gives us access to newer and more effective tools, its deployment is far from being a perfect science or having a proven approach. What’s clear is that while technologies like IoT, AR/VR and AI are redefining the bedrocks of operations, marketing, and computing, the business of the future is expected to either imbibe these into their business models or run the risk of losing relevance in the present technology landscape.
The 3R Approach is a means of driving digitization in a way that addresses every growth dimension for modern enterprises. Each of its three aspects – rethinking products and services, reimagining customer experience, and reengineering the value chain will be elaborated individually in this four-part blog series. Watch out for the next post, where we’ll dive straight into rethinking products and services as a means to digitization.