by Rajiv Gupta
Raj Dutt, a 35-year-old home furnishing retailer in Srinagar was among the many affected by the political turmoil in Kashmir. However, this did not dampen his entrepreneurial spirit and he found an innovative solution—a digital solution.
Dutt leveraged the newly-launched sales assistant iPad app from a leading home furnishing company to create a new way of doing business. He went to his customers’ homes, showcasing the now digital product catalogue, helping them visualize interiors on the app itself and taking orders on the spot or bringing over the shortlisted fabric samples when needed. Now imagine doing this without the app, which would need him to carry close to 200 sample books to choose from, each weighing 10-15kg, for each home visit.
In Dutt’s epic journey we find a true representation of the impact a thoughtfully-crafted digital solution can create in the right hands. Digital disruption in retail is often thought of as just a way of creating a new channel to sell, own or aggregate products or services via a cool app or e-commerce marketplace. But the true potential and value of digital is far more ubiquitous.
For instance, geo-analytics, complemented by rich consumer data, today allows you to pinpoint exactly the right micro-markets for, say, a handset brand to launch new stores in—something that was based on ‘experience’ earlier.
Digital is not all about business-to-consumer (B2C). In B2B companies, let’s say auto components, one of the top needs for customers quite often is transparency of order status and timely updates. Digital provides a strong way of seamlessly creating a platform where the customer can track his order from acceptance to manufacturing and from transport and delivery with pro-active intimation on potential delays—making his/her life much simpler. The advantages are manifold but the journey is never easy.
We believe there are six key pillars for a successful digital transformation.
Disruption and innovation
Redefining the business model, from selling to servicing to feedback and improvement, is one of the first steps in the journey. More times than not, the consumer won’t have answers you need directly (e.g. Henry Ford’s famous quip that if he were to ask his customers what they wanted, he would have built faster horses). Our lines of inquiry need to leverage trained specialists to tap into the discipline of ethnographic research and understand unmet or latent needs. Amazon Echo Dot or Google Home are excellent examples of creating a new need—a digital assistant that is a news reader, home lighting controller, travel agent and Wikipedia rolled into one.
Customer journeys re-imagined
Defining seamless and integrated consumer journeys across all touch-points is next. If technology has defined progress in the last decade, then design thinking is the flavour of the next one. Imagine someone refurnishing their home can shortlist the fabrics you like on your app while commuting, visualize the shortlisted products as upholstery or curtains on your laptop, get advice from family and friends and finally find the nearest store to ‘touch’ the actual fabric and complete the purchase—all through beautifully designed screens in a few clicks.
Agile development and launch
Executing these ambitions requires a considered approach—choosing the right partners and technology platform, getting the data right, even finding the right product photography solution to a life-like product display, testing the digital product and planning the digital marketing right. The focus has to be on creating the MVP (minimum viable product) and then enhancing and refining it through each sprint for iterative upgrades.
Creating data and analyst capability
‘Data is the new oil,’ it is said, and the key here is unlocking consumer data at the front end and operations data at the back end. It is possible today to target a person, who searched for a car, with an auto-insurance offer that is customized for him depending on his profile (demographics, interests) at another website that he frequents.
Every penny of yours can be optimized to target the right person in the right geography at the right time and the right place to personalize the right offering and maximize the return on investment.
Adoption and commercialization
Each digital investment should have a clear lens on commercial value, tracked actively through a sharply-defined dashboard. Adoption is among the toughest challenges in the journey—especially, converting a user’s interest to not only, say, a potential download, but actual usage, transaction and, most important (but most difficult), repeat engagement—while at the same time, doing so at the least cost per click.
Digitization of process
A chain is as good as the weakest link. A sports car chassis with an 800cc engine will not create an optimum consumer experience—neither will the most-innovatively designed agile customer process with a 1990s back-end.
Hence, digitizing of the core processes through a clear integrated view of the information technology (IT) architecture and associated applications and making choices around niche versus diverse platforms needs thoughtful consideration.
Digital is a reality—it is not a dotcom boom or bust. It is already the current way of working and organizations have a choice—to embrace it…or die.
Rajiv Gupta is partner and head of technology advantage practice, Bharat Mimani is project leader, and Amrita Chang is consultant at BCG India.
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