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Why digital transformation is vital to the future of retail

Traditional retailers around the globe are facing unprecedented pressure. With online competitors able to offer the same products, often at a lower cost and with a greater degree of convenience, consumers have come to expect more than the traditional retail experience can deliver.

By Tanja Lategan, CEO, Enlight Strategic

That’s as true for South African retailers as it is for their international counterparts.

While economic pressures have certainly played a part in the decline of several major brands over the past few years, there’s no doubt that failure to embrace changing customer expectations has also played a role.

If retailers are to ensure they don’t fall victim to the same issues, they must embrace customer-centric digital transformation.

While this is obviously something that needs to happen across the organisation, a marketing-led approach can provide the most immediate returns.

The state of play

For a long time, retailers have been laggards when it comes to digital transformation. Research from Gartner in 2018 showed that just three percent of retailers were seeing results from digital business initiatives. 

In the last couple of years, however, players across the industry have started to catch up and are embracing technology. A recent Gartner report found that as many as 77% of retailers plan to deploy some form of AI by 2021.

Far too many retailers, however, are investing in it solely from a warehousing and operational side. In doing so, they’re missing out on the potential impact digital transformation can have on marketing.


Is your business ready for transformation? Take our 5-minute Digital Maturity Assessment to find out and get a FREE report.


Digital-led marketing

Ironically, most retailers are ideally poised to take advantage of marketing-led digital transformation. Any retailer with a loyalty programme already has vast amounts of valuable customer data.

With the right data extraction and analytics tools, this data can be used to gain valuable insights about what individual customers are buying, how much they’re spending every month, and where they’re spending their money (in both the physical and online realms).

This can then be refined and used to provide customers with personalised marketing across the digital channels of their choice.

As well as individually-tailored, highly visual forms of storytelling, retailers can provide customers with personalised offers that improve their overall experience of the organisation.

This, in turn, means that they’re more likely to remain loyal to the retailer in question, spend more money with it, and recommend products to their friends.

That’s a lot of advantage to be gained from retailers simply making the most of the tools available to them.

Factor in the potential for internet of things (IOT) technologies to dramatically improve the in-store customer experience and it’s clear that there’s no need for retailers to lurch into obscurity, provided they’re willing to embrace change.

Getting started

For many legacy retailers, however, even getting started can be a challenge. This is especially true for the largest ones, where getting the organisation to embrace change can feel like turning around the proverbial ocean liner.

Because retailers have been slower to digitally transform than most other industries, however, any movement can still produce significant results.

Before any organisation can get started on its digital transformation journey, it’s vital that it conducts a digital maturity assessment.

This allows the organisation to determine where it is in the present, so that it can define where it wants to go in the future and how to get there.

It’s important to note that, even with a proper assessment and plan in place, digital transformation won’t happen overnight. It’s a long-term game with gradual progression.

But by starting with one area of the business, or even with a single system, retailers can see the impact of digital transformation without upending the business in its entirety. Implemented properly, that success will filter through to the rest of the organisation organically.

Retailers still have plenty to gain from digital transformation, but if they’re to experience its full impact, they have to embrace it now rather than later.


Is your business ready for transformation? Take our 5-minute Digital Maturity Assessment to find out and get a FREE report.


Digital maturity is vital to profit growth: Here’s why

Organisations of all sizes and across almost every industry have embraced digital transformation and accepted digital maturity as an ongoing goal to work towards. Far too many companies, however, view it as a box-tick item. In doing so, they miss out on the significant return-on-investment opportunities that come along on the journey to digital maturity.

By Catherine Murray, Head of Digital Transformation, Enlight Strategic

Microsoft’s digital transformation overhaul, in response to disruption by companies like Amazon and Apple, moved the company into a more forward-focussed cloud-based business. This resulted in a whopping 258% stock price growth over 5 years. Over the period from 2014 to 2019 revenue increased from $93.5 billion to $122 billion.

Similarly, Nike’s ongoing digital transformation programme to reinvent its brand and supply chain and move into the ecommerce space has resulted in a 69% stock price growth in just 2 years. Its stock price was $52 at the beginning of 2017 – it’s now up to nearly $88. Revenue increased from $33.5 billion to $39.1 billion in that same time period.

Among the benefits that come with transforming digitally and becoming digitally mature are reduced business costs, improved customer experience, increased agility, and reduced time to market.

Combined, these benefits can play a massive role in growing a company’s profits. In order to understand how, it’s worth reminding ourselves what a digitally mature company looks like.

Constantly maturing

While there are a number of competing definitions for digital maturity, there are a few characteristics that the most mature companies have in common.

They will, for example, have a well-established transformation roadmap that effectively fends off disruption and evolves as needed. They also use digital technologies to run their business and have the ability to drive continuous change across the company.

Additionally, these companies realise that achieving digital maturity is an ongoing process rather than an end-point to be reached.


Is your business ready for transformation? Take our 5-minute Digital Maturity Assessment to find out and get a FREE report.


Analytical, data-based approach

A part of that ongoing process means organisations using their available data as effectively as possible.

For the organisations that get it right, the rewards are plentiful. According to research published by Entrepreneur in 2019, businesses that effectively use Big Data saw a profit increase of 8 – 10% and a 10% reduction in overall operating costs.

Getting to that point, however, is easier said than done. According to research from Gartner, as many as 80% of marketers will abandon their personalisation efforts in the next five years. It attributes this to a lack of real return on investment and the challenge of managing customer data.

In order to overcome those data-based challenges, it’s vital that the entire organisation buy into digital transformation as a mindset. In doing so, it will reap the benefits of a data-based analytical approach.

Customer experience and digital maturity

One of the biggest advantages of this kind of analytical, data-driven approach is that it allows companies to give their customers a hyper-personal experience.

And in a world where it’s increasingly difficult to differentiate on price and quality, customer experience (CX) can make all the difference. In fact, research from Gartner shows that more than 81% of companies are competing mostly or completely on the basis of CX.

Here too, the opportunities for increased profits are big. According to research from PWC, 49% of buyers have made impulse purchases after receiving a more personalised experience. Similarly, 66 percent of customers say they’ll pay more for a great experience, and experience-driven businesses see almost 2x higher YoY growth in customer retention, repeat purchase rates and customer lifetime value than other businesses.

Nike’s success is largely attributed to improving its connection with customers through membership opportunities, stronger digital marketing and powerful data analytics.

Nike started selling directly to customers and partnered with Amazon for an updated e-commerce strategy. This end-to-end focus on consumer touchpoints and data better allowed Nike to connect with customers more personally and recommend the right products.

The company also opened concept stores and improved its online and mobile app experience, and has since ended its relationship with Amazon to gain even more direct control over their CX.

Given that the interactions people have with companies now largely take place on digital devices and platforms, it’s clear that transforming digitally is vital to providing good CX.

A few simple changes can result in a massively improved digital customer experience, bringing with it significant profit growth. That makes taking the journey towards digital maturity a no-brainer.

Boosting productivity

Digital transformation doesn’t only boost revenue growth, it also impacts employee productivity. A recent survey by Zensar shows that a lack of proper technology tools can hinder productivity and lower morale.

53% of the surveyed employees said they would be more empowered to better manage workflow if they were provided with the needed tools. 76% also added that having the digital tools they need at work makes them more productive and more than half, 53%, said it makes them more successful.

Utilising digital technology to change traditional ways of working also results in lower business operating costs, as teams can work remotely and collaborate online. This also generates more employment opportunities which is critical for economic growth, especially in South Africa.

Opportunities abound

These are just a few examples of how taking the leap into digital transformation and embarking on the journey towards digital maturity can be vital for profit growth.

They are not, however, the only ones. If an organisation embraces digital transformation in its entirety, then everything it does will feed into improved efficiencies, better customer experience and reduced time to market.

This requires assessing the company’s digital maturity across all five main areas of the business: Leadership, customer experience, technology, operations and culture. All of these feed into one another and, ultimately, result in increased profits.  

Companies can then work with a consultancy to improve their digital maturity and get recommendations on how to address the problem areas to start their digital transformation journey.

Enlight Strategic offers a free online digital maturity assessment to help you get started. This will show you where the challenges and opportunities lie with taking your business to the next level.

Catherine is the Head of Digital Transformation at Enlight Strategic. She has over 13 years digital experience and specialises in customer experience (CX), digital disruption, platform and digital maturity analyses, research, and cutting though the noise, to find simple, pragmatic solutions to complex challenges.

4 important digital transformation questions answered

Companies across an increasingly wide range of industries are waking up to the need for digital transformation. Rightly so too. Digital transformation doesn’t just allow organisations to keep up with the changing world around them, it also gives them a distinct business advantage, especially when it comes to factors such as customer experience.

By Tanja Lategan, CEO, Enlight Strategic 

In fact, 56% of CEOs say that digital improvements have led to revenue growth. Research from Accenture shows that 75% of consumers are more likely to make a purchase from a company that knows their name and purchase history and recommends products based on their preferences.  

Digital transformation is, in other words, imperative. But knowing that you need to do something and knowing how to do it are two different things.

With that in mind, I’ve outlined some of the questions I’m most frequently asked around digital transformation as well as the answers to them. 

1. What is digital transformation?

Digital transformation is such a broad term and the definition can change depending on your context and focus area.

Digital transformation will therefore look different for each company, but essentially it is the process of using digital technologies to create new, or improve existing business processes, culture, and customer experiences to meet the changing business and market requirements.

This could be driving efficiencies through robotic process automation, upgrading your IT infrastructure or improving sales through better customer experience and data analytics tools. 

Enlight Strategic believes in a holistic approach to digital transformation that covers five main areas of business:

  1. Leadership
  2. Customer
  3. Technology
  4. Operations
  5. Culture

In order to achieve true digital maturity, all these aspects need to be assessed and considered.


Is your business ready for transformation? Take our 5-minute Digital Maturity Assessment to find out and get a FREE report.


2. Why do companies need to embrace digital transformation?

The incentive is to remain relevant, survive and thrive. It’s basically do or die. If your company does not adapt, you may experience the same fate as some companies who had to close their doors in the retail and media sectors when they were disrupted by Google, Facebook and Amazon.

From a community and economic perspective, we might not be able to change government policy or end load-shedding, but I believe it is every organisation’s responsibility to embrace digital transformation.

Companies must position themselves to contribute positively to the economy and the employment rate.

3. What does digital transformation mean for job creation?

A recent survey published by the ManPower Group predicted a very gloomy outlook for employment. It’s acutely the weakest it’s been in 5 years and down 3 percentage points compared to this period last year.

It is, however, encouraging to see that industries experiencing major disruption and companies that have subsequently undergone digital transformation are showing an uptick in hiring.

This shows a positive correlation between digital transformation and job creation and means that the strongest opportunities for job seekers will be in the Finance, Insurance, Real Estate, Business Services sectors where the net employment outlook is +9%.

Companies also need to place more focus on Augmented Humanity and consider how technology can support rather than replace their human capital.

4. How does a company go about getting digitally transformed? Where do they start?

You can start by knowing your digital maturity and understanding what it means on a practical level.  A digital maturity assessment can help businesses to not only understand their own digital maturity but also how it compares to that of their competitors and industry as a whole.

Companies can then work with a digital transformation consultancy to fast track their digital transformation journeys, improve their digital maturity and get recommendations on how to address problem areas.

Enlight Strategic offers a free online digital maturity assessment for example, so there is really is no reason not to do it.


Is your business ready for transformation? Take our 5-minute Digital Maturity Assessment to find out and get a FREE report.


Tanja is the CEO and co-founder of Enlight Strategic, a digital transformation consultancy. She has more than a decade’s worth of experience as a senior executive in the digital publishing and agency space and is passionate about the role technology can play in transforming businesses.

The 5 stages of digital maturity: How does your organisation rank?

One of the most common misconceptions about digital transformation is that it’s about the implementation of cutting-edge technologies and IT systems that optimise operational processes. While technology plays an important part in digital maturity, it doesn’t give us the full picture.

By Catherine Murray, Head of Digital Transformation, Enlight Strategic

Many companies implement new digital tools and platforms only to find that they remain unused or unable to deliver the intended transformative impact due to low digital maturity levels within the organisation.

In fact, research into challenges companies face adjusting to the faster pace of digital business, from MIT Sloane and Deloitte, indicates that digital transformation constitutes a culture and mindset change first. Rethinking technology happens further down the line.

Digital transformation is better defined as a process of adopting new or different business processes and ways of thinking that help an organisation adapt and compete effectively in an increasingly digital world.

This means that companies need to understand how digital affects and can transform all aspects of the business, including leadership, culture and customer experience in addition to technology and operations.

Understanding readiness to transform across these areas is also critical, as differing levels of digital maturity require different approaches – there is no one size fits all solution.

But what is digital maturity and why is it important?

Digital maturity is simply a measure of how ready an organisation is to both understand and adapt consistently to ongoing digital change.

Higher-maturity organisations are nearly three times more likely than lower-maturity organisations to report net profit margins and annual revenue growth that are significantly above the averages in their industry, according to research by Deloitte.

Digital maturity models evaluate how well companies have incorporated digital into their operating models, how effective they are at executing on digital initiatives and their ability to adapt to disruptive technology, events, market trends, competitors or other major factors – both culturally and operationally.

Performing an assessment of an organisation’s digital maturity levels across all aspects of the business is the best place to start a digital transformation journey. It allows you to determine where you’re at in the present, so that you can define where you want to go in the future and how to get there.


Ready to transform your business? Take our 5-minute Digital Maturity Assessment and get your FREE report.


What are the 5 stages of digital maturity?

In my experience, organisations fall into one of five broad stages of digital maturity:

1. Traditional: These are companies stuck with legacy systems, processes and outdated ways of thinking. They make little use of digital technologies and lack the ability to drive change across the business. Activities that support digital transformation are usually accidental and not a result of strategic intent. They are likely being disrupted by competition and must act quickly to build a strategic plan and organisation-wide awareness of why digital transformation is critical to save the business.

2. Emerging: These organisations embrace digital slowly and have modernised some aspects of their business but are largely reactive and only make changes when they have to. They are unable to outpace digital disruption. These companies must start addressing digital transformation seriously and avoid creating more legacy issues that will make it difficult to scale and compete in the future.

3. Engaged: These businesses experiment with some critical elements of a winning digital transformation strategy. Limited foundational activities and pockets of innovation are in place, but often siloed and lacking focus or leadership. These companies need a plan for driving adoption of a singular digital vision. Key stakeholders must be engaged to develop a structured and sustainable transformation roadmap that delivers measured business value.

4. Competitive: Companies in this category have a digital roadmap in place and are starting to combat disruption. They compete effectively in the current market but need a strategy for future growth. These companies should start optimising, and address any remaining blockers preventing them from launching and supporting new digital products or services that leapfrog competitors.

5. Maturing: These companies have a well-established transformation roadmap in place that effectively fends off disruption and evolves as needed. They use digital technologies to run their business and have the ability to drive continuous change across the company. These companies must develop a roadmap for continuous transformation and delivery, in order to realise their full potential and become leaders in their industry. Finding ways to remove friction enables them to react swiftly to market trends and speed up delivery of new digital experiences.

I prefer the term “maturing” to “mature”, as the nature of digital requires transformation to be an ever-evolving process without a finite end.

Digitally maturing businesses are always transforming, and never transformed. These organisations constantly move forward on the digital continuum by regularly assessing and adopting new technologies, processes, and strategies.

How do we rate an organisation’s digital maturity?

There are varying digital maturity assessment models, but broadly all involve scoring an organisation’s digital maturity performance across several pillars of the business, including but not limited to: Leadership, Customer, Technology, Operations and Culture.

Analytics and data should be included as a measure of performance within each of these categories as it is critical to the success of any digital transformation programme.

Comprehensive digital maturity assessments typically involve several months of stakeholder interviews, surveys, research and analysis by digital transformation experts immersed within the business.

That’s great, but where do I start?

Start by completing an initial short, high-level online digital maturity assessment. This will provide you with helpful indicators and an initial appraisal of where your organisation stands, which be used to motivate your company to undertake a full audit.

Keep in mind that digital transformation doesn’t happen overnight. It’s a long-term game with gradual progression.

Starting small with one sector of your business or examining one system is also a great way to show proof of concept and test out new ideas.

The pillars of your business that score lowest for digital maturity could be an initial focus for your digital transformation programme, as they are still developing and may require immediate remedial action. Understanding exactly what this means for your organisation and developing a clear action plan is an important first move.


Ready to transform your business? Take our 5-minute Digital Maturity Assessment and get your FREE report.


Catherine is the Head of Digital Transformation at Enlight Strategic. She has over 13 years digital experience and specialises in customer experience (CX), digital disruption, platform and digital maturity analyses, research, and cutting though the noise, to find simple, pragmatic solutions to complex challenges.