The term “digital transformation” is arguably the hottest term in business today. But what does it really mean? Done right, says George Westerman, principal research scientist with the MIT Sloan Initiative on the Digital Economy, and it’s like a caterpillar turning into a butterfly, but when it’s done wrong, all you have is a really fast caterpillar.
I think we can all agree that digital transformation is about technology (think, AI, augmented reality, virtual reality, IoT, Blockchain, social media, etc.), but key to succeeding in your digital transformation journey is what you do with that technology.
Let’s look at a couple of recent examples.
One of the biggest company failures of late is Toys ‘R Us. An American staple since 1948, the announcement that it would close its doors provoked strong, emotional reactions (there was actually a Go Fund Me page set up to try to save it). As I scrolled through comments on social media, I was struck by the number of people who commented that we (consumers) need to stop shopping online. Really? Suddenly, it’s my responsibility to keep businesses afloat. Believe me, that’s no winning strategy for any company.
One of the main reasons Toys ‘R Us failed is because it didn’t evolve for a digital economy. It expected loyalty from customers; it stopped earning it. It didn’t use technology in ways that delivered consistent, personalized and memorable customer experiences—neither online nor in their stores. To consumers, it felt like the company had given up. As a result, Amazon, Target and Walmart won over their once loyal customer base.
We hear it all the time. Retailers are losing to online shopping. Brick-and-mortar retail is dead. I guess Nordstrom didn’t get the memo. Recently, the clothing retailer opened a high-tech men’s store in the heart of New York City, its first non-discount store in the big apple and its first location catering exclusively to men. And boy did they nail it. It looks like a department store out of the future. They’ve created an environment that people want to experience, complete with custom products, convenience and cocktails … my kind of place! The new store boasts 24/7 pick-up, same day delivery, express grooming and customized products. (Did I mention the clubhouse bar?)
Nordstrom is an excellent example of a company successfully reinventing itself for the digital economy by evolving its business model around the omnichannel shopper. They are catering 100 percent to customer needs and desires all with technology leading in the right ways. As Jamie Nordstrom, the company’s president of stores, recently said, “It’s not technology for technology’s sake. All of retail is experience these days.” He’s right. But let’s not limit that to just retail. Everything is about experience.
In his book, The Digital Transformation Playbook, David Rogers argues that digital transformation is not about updating your technology, but rather it’s about upgrading your strategic thinking. This is exactly how businesses need to view it. We need to redefine the customer journey as customers want to experience it today, and understand there’s no longer an endpoint. We need to engage with consumers before they’re customers, reengage with them when they start their buying journey, and stay engaged to inspire them to keep coming back.
I’ve been using the same car service now for the past several months. I can use an app or voice to schedule my rides. The times when I pick up the phone, an AI chatbot answers, recognizing my number and greeting me immediately by name: “Hi, Becky. Welcome back. Where would you like us to pick you up?”
The company is delivering a meaningful and personalized experience, while taking digital technology to the next level. And you know what? I feel like my business matters to them profoundly. I’m not an afterthought. They ensure they are delighting me at every stage of the journey and, as a result, I keep coming back.
I had another experience recently when I used the Apple Support app for the first time. I was having issues with my iPhone and from an Avaya meeting room, I opened the app, had a quick chat with an Apple genius and received the instructions I needed to correct the issue. Total time spent start to finish? Fewer than three minutes. That’s a superior customer experience. PS: No Apple iPhone user should be without the Apple Support app! Download it today. And this is the payback for delivering that experience: word of mouth advertising.
So from a customer’s perspective, what do these examples have in common? Excellent customer service. And while technology is playing a leading role, we’re relying on the expertise, empathy and experiences of our employees to deliver it. If we’ve learned anything from recent headlines, it’s that the actions of just one or two employees can make or break a company. (Am I right, Starbucks?) To this end, it’s imperative that we get this piece right.
In parts 2 and 3 of my series on digital transformation, we’ll talk about why successful DX strategies must be built from the inside out, as well as Marketing’s evolving role in the new digital age. Stay tuned!