digital transformation: making the leap from digital dinosaur to digital disruptor

Digital Transformation:Making The Leap From Digital Dinosaur To Digital Disruptor

Sponsored by

KATIE EVANSMODERATOR

Editor, Mobile Strategies 360Internet Retailer

BRENDAN WITCHERPrincipal Analyst

Forrester Research Inc.

PETER BLUMVP Product Management

Instart Logic

Digital Transformation:Making The Leap From Digital Dinosaur to Digital Disruptor

Brendan Witcher, Principal AnalystMarch 24, 2016@BrendanWitcher

Empowered customers give rise to a new era.

© 2016 Forrester Research, Inc. Reproduction Prohibited 4

Empowered customers have given rise to a new era

Age of manufacturingMass manufacturingmakes industrialpowerhousessuccessful

• Ford• Boeing• GE• RCA

Age of distributionGlobal connectionsand transportationsystems makedistribution key

• Wal-Mart• Toyota• P&G• UPS

Age of informationConnected PCs and supply chains meanthose that controlinformation flowdominate• Amazon• Google• Comcast• Capital One

Age of the customerEmpowered buyersdemand a new level ofcustomer obsession

• Macy’s• Salesforce.com• USAA• Amazon

5© 2016 Forrester Research, Inc. Reproduction Prohibited

The past.

Information

Price LocationTech


Information

Price Location

Tech

Today.


Organizations must focus on four market imperatives to meet the needs of customers

Transform the customer

experience

Embrace the mobile mind shift

Become a digital disruptor

Age of the Customer

Turn big data into business

insights

Your business needs to dramatically change in the age of the customer or risk

being disrupted out of business.


Welcome to “hyper-adoption”...

…and “hyper-abandonment”.


Complexity is the new reality

Those that see digital as an opportunity for competitive advantage, thrive…

And while some brands are born digital...

…others evolve, and achieve digital mastery…

…while others fail to become digital and disrupt, therefore becoming disrupted.


No industry is immune

To survive in the age of the customer, you must become a digital business...

…which means you need a digital strategy.


27%Of firms have a holistic digital strategy.


48%Of firms have a limited digital strategy.


21%Of firms have the right people setting strategy.


16%Of firms have the skills to deliver.


68%Of executives say functional boundaries inhibit their digital maturity.

Digitize your business strategy.

Digital businesses win, serve, and retain customers by continuously creating and exploiting digital assets to simultaneously deliver new sources of customer value and increase their operational agility.


Source: April 16, 2016 “Understand The Digital Business Landscape” Forrester report

Master both sides of digital


Dig

ital C

usto

mer

Exp

erie

nce

(DC

X)

Digital Operational Excellence (DOX)

Source: September 10, 2016 “ Brief: Take The Digital Business Readiness Assessment”, Forrester report

Digital mastery eludes most firms


Dig

ital C

usto

mer

Exp

erie

nce

(DC

X)



Don’t succumb to digital extinction

Digital Dinosaur


Dig

ital C

usto

mer

Exp

erie

nce

(DC

X)



Drive digital efficiency and agility

Digital Dinosaur

Digital Connector

© 2016 Forrester Research, Inc. Reproduction Prohibited 30Image source: http://www.engadget.com/2016/10/01/starbucks-app-uk-mobile-order-pay/

Macy’s today is rich with content and functionality for serving customers


The North Face learns the “why” of customers shopping instead of the “what” Image source: https://www.fluid.com/news/the-north-face-ibm-and-fluid-launch-new-interactive-shopping-experience-using-artificial-intelligence-ai


Dig

ital C

usto

mer

Exp

erie

nce

(DC

X)



Re-position yourself in the ecosystem

Digital Dinosaur

Digital Connector

Digital Operator

© 2016 Forrester Research, Inc. Reproduction Prohibited 33Image source: http://www.engadget.com/2016/10/01/starbucks-app-uk-mobile-order-pay/

Starbucks reduces checkout time and allows for ordering ahead within one app


John Lewis uses mobile location technology to optimize offline customer experience


Package is ready for customer on arrival

Customer is sent notification asking if they would like to collect package

Stock Room is notified of customer arrival and starts to pick the order

App directs customer to collection desk

Discreet plastic “beacons” around the exterior of the store, activate when

customer is 70m away.


Digital Dinosaur

Digital Connector

Digital Operator

Digital Master

Dig

ital C

usto

mer

Exp

erie

nce

(DC

X)



Iterate and innovate to maintain mastery


Nordstrom expedited digital transformation by partnering with Shoes of Prey


Tablet Cradle Offers Customers Convenient Hands-Free Operation

Enough Space Allows For Customers To Relax And Feel Comfortable

Interface Is Simple And Guides Shoppers Through the Process

Designed To Compliment Look And Feel Of Nordstrom Stores

Customers Can Use Tablets With Or Without Associate Assistance

How do we find digital masters…what do they look like?


Business modeldesign

Customer experience

design

Technology design and

delivery

Design isn’t sequential any more


This is not the answer.


You need to operate iteratively


Burberry’s iterates towards digital mastery


Digital businesses think differently about strategy

Digital Strategy


Bus

ines

s st

rate

gy

Dig

ital s

trate

gy

Strategy


Bus

ines

s st

rate

gy

Dig

ital s

trate

gy

Strategy Execution


Bus

ines

s st

rate

gy

Dig

ital s

trate

gyTechnology

Strategy Execution


Bus

ines

s st

rate

gy

Dig

ital s

trate

gy Culture

Organization

Technology

Metrics

Strategy Execution


Culture Foster a culture of digital innovation

Kohl’s puts staff closer innovation by opening it’s Digital Center in Silicon Valley


Culture

Organization

Foster a culture of digital innovation

Organize to deliver digitally enhanced experiences

The Nestlé Digital Acceleration Team (DAT) is made up of marketing leaders from around the world who participate in an 8-mouth training

program in digital and social media.

Nestle uses a digital acceleration team and centre of excellence to govern change


Culture

Organization

Technology



Enable with technology

54

Virgin Atlantic is building agility into its organization through technology…

© 2016 Forrester Research, Inc. Reproduction Prohibited

Look

Book

Travel

Tell

…and designing touchpoints around its lifecycle using web & responsive design…


…enabling rapid, customer-centric innovation and value-oriented customer experiences


Culture

Organization

Technology

Metrics



Enable with technology

Underpin decisions with customer-centric metrics


Sephora prioritizes understanding customers through digital engagement…


…encourages self-identification by providing personal experiences offline…


…and online, allowing them to better understand customers across all channels.


?So it that it?

Digital business transformation is a journey, not a destination.


The Digital Maturity Model

Repair Elevate Optimize Differentiate

Culture

Organization

Technology

Measurement


Source: Digital Maturity Survey 2016

Digital masters are hard to find

Automotive

Consumer products

Financial services

Health

Technology

Media and communications

Retail and wholesale

Telecommunications

Travel

Other

0% 20% 40% 60% 80% 100% 120%

RepairElevateOptimizeDifferentiate

Repair Elevate Optimize Differentiate


Source: Digital Maturity Survey 2016

Digital Maturity delivers results

No impact

We have not implemented a multi-touchpoint digital strategy

Increased operating costs

Increased employee morale

Increased offline sales

Increased call center volume

Decreased operating costs

Satisfaction or similar metrics

Increased profitability

Increased online sales

0% 10% 20% 30% 40% 50% 60% 70%

What impact has the implementation of a multi-touchpoint digital strategy had on your company?

DifferentiateRepair


Digital maturity drives topline growth


To transform your business, the strategies, tactics, and technology you choose must:

›Meet the needs of today’s digitally-savvy customer, while addressing the rise in mobile commerce and engagement

›Allow IT the agility to move as quickly as the lines of business demand

Thank you

forrester.com

Brendan [email protected]@BrendanWitcher

Peter BlumVP of Product Management

Instart Logic

Poll

What is your company doing to drive towards digital mastery?

– Personalized, rich and immersive user experiences– Mobile technology in-store for better customer experiences– Digital Center(s) of Excellence– Adaptive websites tailored for mobile moments– Better understanding of customers using digital engagement

70 | Confidential and proprietary

Tension between business and technologyLoB/Marketing

Technology

•Conversions, especially on Mobile•Cart Size, personalization, more features•Rapid Testing, New Offers and approaches

•Reliability and Scale•Web App Performance•Multiple Devices esp Mobile•Managing Changes Efficiently

•Performance vs Richness•TTM vs Reliability

The rise of mobile and its challenges

Mobile commercetraffic growing

25%Mobile conversion

Much lower

73%Average response

time on mobile

5.75sSlower than1 year ago

28%Sources: ComScore, Monetate, Keynote

Poor load times destroy conversions

0-1 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12 12-13 13-14 14-5 >15

Load Time (seconds)

Population (%) Conversion rate (%)

Conversion rate vs. Load Time

Sources: Walmart, Amazon, GlassesDirect

Looking for• Speed!

• Enable the business to move faster with reliability

• Plus a solution to address performance challenges especially mobile


Automatic performance optimizations allow more changes• Machine-learning allows system to discover changes automatically • Allows richer experiences like personalization and rich product

images• Enables a high volume of changes plus super fast performance

ANALYZE OPTIMIZE

LEARN

Free up developer resources for moving the business forward • Leverage a smart application delivery service vs. building

internally– Optimization of performance for mobile, tablets, and desktops– Right-sizing and adapting images for each type of device– Device detection capabilities for responsive and adaptive web

experiences– Self-service for configuration changes and content management– APIs for everything


Already a trusted partner for online businesses


Case Study: World of WatchesMetrics

• Avg page load times from 8s to 3s (62.5%)

• 12% directly attributable conversion increase due to speed

• User testing ratings (NPS) score increase

• Controlled environment & minimal delays increasing designer productivity

• Optimized, consistent images across all future platforms


Questions?