Digital transformation is in full swing, and companies are doing their best either to stay one step ahead, or at least to keep up with the crowd. What are some of the biggest challenges and opportunities in digital business today?
1. Meeting expectations of customers in the digital age: The mobile, always-on generation expects very different experiences from companies and organisations, including public administration. According to a recent Harris Poll, 82% of US corporate executives said that customers’ expectations of their company were “somewhat” (47%) or “much” (35%) higher than they were three years ago. Nobody wants to wait in line for services anymore. Instead, they want to be able to arrange their whole lives online.
2. Finding and keeping the people who can digitally transform a company: Somebody needs to build all these great user experiences that make the difference to customers’ lives. But finding and keeping these people will become increasingly difficult. Designing customer interactions is as much an art as it is a skill. The best people will naturally be drawn to companies that do interesting, cutting edge stuff. That means that companies that want digital success need to become technology companies. As Marc Andreessen said in 2011: “Software is eating the world.” Well, right then it was just having a snack. Now it’s a banquet.
3. Managing the omni-channel reality: You cannot fight fragmentation with fragmentation. Consumer side, the fragmentation is nothing you can change: on the contrary, it will only get worse. New devices, IoT, in-car entertainment, the Apple watch, wifi on airplanes… all add together to make a fragmentation of channels. That means that companies need to standardise on the inside with a digital business platform, so they can keep track of what is happening across all these channels. But today the reality is that many companies have fragmented systems inhouse, instead of a single platform to rule them all.
4. Big data: Big data is presenting companies with new opportunities to learn more about their customers, enabling them not only to personalise products and services, but also to change their product development process to reflect what people really want. However, companies are still struggling with getting consumer confidence on this issue, as many consumers are turned off by hyper-personalized offers that seem to invade their personal space.
1. Digital disruption from within: Disruption is the name of the game, with established players being constantly displaced by newcomers that are digital natives. If you can’t beat them, join them at their own game. Existing companies need to disrupt themselves, like Steve Jobs did when he stopped making their best-selling iPod to introduce a newer version of it.
2. Show-rooming is a big challenge for retailers, as consumers continue to increase their online shopping. But recently, there’s also been a trend towards webrooming, with people checking out items online before buying them instore. And once people actually come to shops, retailers have the opportunity to keep them there and upsell, or make them long term customers. Using the IoT and beacons provides opportunities here. Online stores can’t provide the same service and knowledge staff as bricks and mortar stores, and that’s where businesses can build consumer engagement.
3. Digital workforces and new ways of working: Startups these days can work with very small inhouse teams, yet still take on the big boys by using the web and technology to create teams per project. This way of working can be very fulfilling because employees are not stuck in a company, but work only on projects they care about, and where their passion makes a huge difference to the outcome. In a world where less than 1 in 7 people are engaged at work, this could spell the end of multinational corporations as we know them.
4. The Internet of Things (IoT): Using beacons and oculus solutions to improve customer experiences. The IoT is connecting people and devices with each other in an unprecedented way, creating rich possibilities for consumer engagement. Timing is the key element here; if you’re too early you could fail, and if you’re too late, you may lose your place in your industry, and ultimately fail. Companies need to consider how using connected devices can provide more value to customers and more savings for them.
5. Micromoments: Consumers nowadays want everything here and now. And with the power of their mobiles, it’s easy for them to get what they want. Google recently urged bricks and mortar shops to invest more effort on micro moments, when consumers think ‘I want to go..’. According to Google, there’s been an explosion in people conducting ‘near me’ searches. Even more interestingly, 50% of consumers who carry out a local search on their smartphone visit a shop within a day, and nearly 1 in 5 of those searches lead to a purchase within a day. Businesses need to exploit these micro moments across channels.
By Boris Kraft, Chief Visionary Officer at Magnolia.
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