By Julie Dzubay, VP of Sales Operations, WTG, and Editorial Adviser
To go digital or not is no longer a choice. A societal revolution that was set in motion over two decades ago by affordable broadband internet access as well as smaller and smarter computing devices has now brought us to a tipping point where things are moving so quickly that, as a business, if you’re not at least moving with the pace of your industry, you’re going to get run over and probably never recover.
In other words, customers need to change before they are forced to, or it might be too late.
From McKinsey & Company:
- Less than 30 percent of business processes are currently digital.
- Seven out of eight companies have failed in digital-transformation processes.
- Only 32 percent are making solid progress integrating digital marketing along with their traditional marketing strategies.
- Only 6 percent are fully digital in their marketing and communications strategies.
- Companies ignoring digital transformation are likely to have revenues fall by 12 percent.
- Companies embracing digital transformation are likely to have revenues grow by 16 percent.
That’s an average 28 percent swing in revenue between those that are proactive about transitioning their businesses and those that are not. If we look at a traditional brick-and-mortar company that has $40 million per year in sales, that 28 percent swing would amount to over $11 million in lost revenue!
Some case studies and cautionary tales:
- Audi decided they needed to keep pace with consumers by creating Audi City, which provides a deep brand experience for visitors that allows them virtually explore the entire Audi range, even in city-center stores without enough room for showrooms. Volvo is also making big moves. After being written off as boxy and boring, last year the company stunned the auto world when it announced that come 2019, every new Volvo model will be powered by an electric motor, at least in part.
- GE has gone digital by embracing IoT – the next big channel moneymaker – and putting a huge number of sensors on the different pieces of machinery it produces, with the intent to capture vast quantities of data. From there, GE crunches the numbers and gathers rich insights into marketing, manufacturing and consumer habits.
- After a period of expansion from 1970 to 1991, LEGO suffered a steady decline right up until 2004, according to the World Economic Forum. By then, the company was close to bankruptcy. Its digital transformation focused on nurturing new revenue sources by creating movies, games and mobile interactions.
- Starbucks knew they couldn’t become a leading chain on their coffee alone. The company’s main innovation is its Mobile Order and Pay app, which it continues to expand and improve. This is fundamentally a customer-first strategy, as it addresses the basic wants of the consumer: convenience, line avoidance and the personal touch. Coupled with an extensive loyalty program, the app gives Starbucks the perfect venue to up-sell and market to consumers.
- Proctor & Gamble didn’t know how to change from within. Its strength was realizing this and, along with internal innovations, looking outside the company to find the innovation leaders knew they needed to stay alive. The company then set a goal of acquiring at least 50 percent of future innovations from outside the company, either from contracting or buying smaller companies that were leading in key areas.
Many companies that were leading their industries just 10 years ago failed either to change or …