Technology enables remarkable shifts in our workplaces, homes, throughout industries and basically every aspect of our lives. Nowadays, almost every company is a tech company, and technological advancements speed up more than ever. That’s why businesses embrace digital transformation, defined as “the change associated with the application of digital technology in all aspects of human society”, which is mass adoption of technology. Digital transformation is not a buzzword - it is a must and a priority for all business owners and managers.
Over 5 billion people are using wireless Internet, and 3.5 billion smartphones belong to almost half of the world's population that spend at least 3 hours per day using them. Customers have become online-native, and they expect the same from companies. It’s not a new process - the digital transformation had actually started almost three decades ago - more or less at the same time when the internet entered companies and homes.
Customers’ expectations are simple - they want to have it all faster, cheaper, user-friendly and connected. At the same time, it’s not so simple for any businesses, especially big organisations that are not so flexible as startups. However, the truth is that the change is going to come anyway - companies that won’t adapt will likely be left behind.
Although digital transformation is a must and has been on everyone’s lips for a long time, it’s not always an easy process. Let’s take a closer look at companies that have revolutionised the way they interact with clients and promote their products or services.
Let’s start with a relatively simple example such as pizza delivery. We’ve already mentioned that customers want to get a product or service ordered and delivered fast and hassle-free. Domino’s has realized that in this industry there is still a room for improvement and decided to master delivery. Now it’s possible to order a pizza from a smartphone, tablet, smart TV, smartwatch - from literally any device. What is more, Domino’s experiment with ordering pizza via social media. It’s actually possible to place an order on Twitter, using… an emoji. People who prefer an old school way can still order a pizza via phone, but Domino’s is taking a step forward and working on allowing for ordering via Amazon Echo. Voice command can be used not only for an order but also for tracking it. Every pizza lover should agree that this may be one of the most excellent examples of the digital transformation in retail.
Retail is among the industries that are strongly affected by digital transformation and retailers are experimenting with a plethora of ways of reaching potential clients and then making them coming back. It’s not surprising - retail is highly competitive and customers expect the shopping experience to be smooth, instant, personalised and convenient. People are constantly online and hardly ever leave their homes without mobile phones (usually with internet access), so no wonder that it affects their shopping experience.
Nowadays, customers interact with the product several times until they decide to buy. These touchpoints include the brick and mortar stores, a website, newsletter, brand’s social media profiles, opinions about the products, TV and outdoor ads, promo codes, mobile apps, and more. When all these channels are connected and allow for smooth user experience, we can talk about omnichannel.
Although omnichannel is usually associated with online shopping, it fits the clients’ needs just as well in brick-and-mortar shops. Nike is a brand that takes the digital transformation seriously in both online and offline shopping experience. Its flagship store in New York City's 5th Avenue shopping district is mobile-centred and called the ‘House of Innovation 000’. No wonder - it offers innovations such as mobile self-checkout that allows buying a product without any interaction with sales reps or a ‘Shop the Look’ which makes it possible to scan a QR code a the mannequin and to get the entire outfit brought to the fitting room. Clients are informed that everything is ready to try it on by a mobile push notification. "The store has been designed with the understanding that the app will be a big part of it. It is in the DNA of this building and more features will come over time." - said Sean Madden, senior director of service and experiences at Nike.
Another good example of the brand that has mastered omnichannel experience is Disney. It starts with their website - trip plannings works as good on mobile as on desktop. A smartphone is even more useful during the trip because its app allows for locating the attractions and checking the average wait time. However, a real game changer is the Magic Band which is a secure all-in-one device locked in a colourful, waterproof wristband. It can be used to enter theme parks, storing photos taken during the trip, order food and even to unlock the hotel room. Disney promises it also adds ‘a touch of magic’ with special personalized surprises.
The rise of Software as a Service (Saas) platforms is another example of the digital transformation. It is truly a software revolution as we all remember buying software on CDs or even on floppy disks. Now everything can be stored in the cloud and accessible online at any time, from any device. According to The Harvard Business Review, companies specialised in payment options have reduced the time of software integration from 18 months to 5 weeks on average. Thanks to its convenience and accessibility, SaaS is currently used by 25% European companies, and this number is likely to grow.
Interestingly, not only software can be sold as a service. Other popular types of cloud computing can be:
Infrastructure as a Service (IaaS), a fully-outsourced cloud-based computing infrastructure, such as Verizon or Amazon EC2,
Platform as s Service (PaaS), infrastructure packed with solution stack, like a graphic user interface (GUI), operating systems, etc., such as Microsoft Azure,
Recovery as a Service (RaaS) that helps companies with disaster recovery and archiving, such as WindStream or Geminare),
Desktop as a Service (DaaS) which provides a virtual desktop infrastructure (VDI), for example, VMware, Citrix and Microsoft Terminal Services.
The main advantage of … as a Service model is that it doesn’t require buying and maintaining infrastructure. That’s why, even if it’s widely associated with cloud computing, the model is used in completely different industries. An interesting example is a Pay-per-lux leasing program from Phillips Lighting. The program that can be called Lighting as a service allows for reducing the energy without investing in costly LED infrastructure. Phillips Lighting remains the owner of all the fixtures and installations whereas clients only pay for the light they use. It has already been introduced to Washington Metro and Schiphol Airport.
General Electric is a multinational conglomerate with 130 years of history. Also, a good example that not only agile startups embrace digital transformation. It uses 3D printing, which is also called additive manufacturing because an additive process is used to create a digitally-designed model. A physical, often high-quality product is ‘printed’ layer by layer based on a digital model. General Electric uses this technology to create fuel nozzles for its passenger jet engine. The company claim that 3D printed nozzles are up to five times stronger than the same elements manufactured in a traditional way and their clients trust them by placing 8,000 orders shortly after the launch.
Time and money spent on mobile phones are constantly growing. In 2017, 7 out of 8 minutes spent on using a smartphone were spent in the apps. Although Google and Facebook dominate the market, there is still room for others. Actually, developing a mobile app is often the first step towards the digital transformation for many companies.
Let’s take an easyJet app as an example. It is a small hub for travellers - allows them to check-in, displays the boarding passes, includes flight tracker, informs about delays and luggage belt number, and also can be used for ordering food and beverages to be delivered to the seats. But the real innovation is possible thanks to the visual search. Have you ever found a photo of an unknown place and would love to know where is it located and then even be able to visit it? An easyJet app makes it all possible by uploading an image from an unknown destination - it just has to be based in Europe. Then it says what’s the place and suggests flights. With its mobile app, easyJet can compete with other low-cost airlines not only with prices but also user experience.
Mobile apps have revolutionalized banking and financial sector in general. According to Localytics, the number of people who use banking apps will soon increase by 14%. Apps give instant access to managing finances, allow for controlling cards and facilitate payments. Nowadays, practically every bank is mobile-friendly; there are also financial services like a multicurrency cart Revolut which heavily relies on the mobile app. This trend will likely grow.
Digital transformation has revolutionized the way people buy products, share information, communicate with each other and with the brands, manage businesses and more. It would be no exaggeration to say that digital transformation affects every aspect of our lives. It’s a process that has been happening for some time, but there is still room for improvement. Actually, only 21% of companies claim they have reached the digital transformation goals in 2018. In the future, we can expect the growing popularity of connected devices and IoT (the Internet of Things), tailor-made omnichannel shopping experience powered by AI, hassle-free delivery and merging online and offline even more.