The Pillars of Successful Digital Transformation Focus on Strategy, Data Analytics and Commerce

Part 1 in a 4-part series

A Magnifying glass and other computer controls on different sized blocks.
Digital consumer experience is fundamental to your brand's future ability to win.

As co-leaders of a digital customer experience company, we’ve seen how business models across industries are being regularly upended. Why? Consumers now value experiences over possessions, and they do not share the same purchase considerations as older generations. They’d rather rent than buy, they’re mobile-centric, and they expect highly relevant offers that speak directly to them wherever they happen to be.

At the same time, we’ve observed how many leading brands are struggling to catch up with these trends as they lose market share to digitally native competitors that did not even exist five years ago. Without crucial investments in technology and a commitment to culture change, these heritage brands risk losing their relevancy. This slow realization has caused CEOs and boards of directors to frantically search for lifesaving “digital transformation” strategies. In response, management teams often struggle to define it, let alone respond to it.

We’re sharing our perspectives based on a decade of working with brands in this four-part opinion series that aims to help executives navigate rapid change.

Customer experience is king

Customer experience is not solely a concern of the marketing department; it goes to the heart of a business’ strategy.

Even on its surface, the expression “digital transformation” can mean many things. It can include General Electric embedding sensors in trains to intelligently manage rail traffic or it can be McDonald’s experimenting with drone delivery. However, for the marketers we work with, who are measured on driving customer engagement, transactions and lifetime value, digital transformation is about how they manage and enhance the digital customer experience (CX).

And customer experience is not solely a concern of the marketing department; it goes to the heart of a business’ strategy. According to a 2018 survey by Gartner, 81% of companies report that they expect to compete primarily on the basis of customer experience over the next two years. Moreover, the markets appear to be rewarding the winners. According to a Forrester study published last year, “leaders” in customer experience outperformed “laggards” in their stock price growth by a factor of 10.

Blue Acorn iCi

This helps explain the meteoric success of startups such as Uber, Airbnb and Harry’s. Despite deeply entrenched incumbent players in their respective markets, they have demonstrated the ability to capitalize on new opportunities in the digital realm. These businesses are built on solving customer pain points—hailing cabs, making hotel reservations, refilling razors—and use technology to do it at scale. They’ve created billion-dollar businesses by putting the digital customer experience at the heart of their strategy.

These businesses have clearly raised the bar, as heightened consumer expectations are pushing brands everywhere to develop new digital approaches. Brands that fail to do so will either have to lower prices to effectively compete or continue to see their market share erode; not a happy prospect for executives of those companies. Meanwhile, brands must keep pace with the constantly changing technology underpinning the digital transformation that’s driving consumer expectations in the first place.

Power of tech driving change

Powered by cloud marketing solutions, companies now possess the ability to deliver a highly personalized experience to thousands (if not millions) of customers, automated and in real-time. Good CX also increases digital engagement, which in turn produces actionable data on customer behavior. Armed with this data, brands can generate new insights that further opportunities to lower acquisition costs, boost retention and increase customer lifetime value. Because this data is proprietary—captured entirely within each brand’s customer journey—it can provide brands with a unique competitive advantage.

Eighty-one percent of companies report that they expect to compete primarily on the basis of customer experience over the next two years.

Winning brands are finding ways to create a sense of customer intimacy through personalized content delivered through connected devices. For example, L’Oréal allows users to upload an image of themselves and “save a look” by experimenting with different makeup products. Panera Bread personalized its experience on their website by rendering different products and offers based on the time of day, weather, location and user purchasing patterns.

And the innovation is continuing. As Shawn Utke, svp, CEM, ecommerce at Panera, said, “By learning from our MyPanera loyalty members, we can anticipate their needs and deliver against it.” Essentially, they are using data and a diverse food pantry to customize the experience.

3 keys to winning transformation

Given the stakes and level of attention digital transformation now holds in corporations and the level of complexity required to achieve it, every brand is seeking a playbook to guide their process. Three pillars to consider in driving digital transformation are:

Strategy, culture and navigating partnerships are indispensable elements. Technology isn’t a substitute for a digital transformation strategy—it’s an enabler. And without the right talent and business processes, companies will fail to get the ROI from their technology investments.

Brands must build a cloud-based data technology infrastructure that allows them to capture customer data across diverse digital touchpoints. Applying data science to drive insights will empower marketers to show audiences the right content, in the right context, at the right time, increasing engagement and conversion rates.

For brands selling physical goods, a direct-to-consumer brand digital commerce strategy is essential to owning the entire customer experience—from ad click to doorstep—and not being held hostage by walled gardens such as Amazon.

It’s worth exploring each of these concepts in detail. Specifically, in our next article, we’ll tackle how to think through a digital transformation strategy and the cultural changes required to achieve it.

Chris Guerra is the co-CEO of Blue Acorn iCi. Blue Acorn iCi is an independent digital consumer experience company with a 400-person team of engineers, data scientists, digital commerce experts, designers and strategists working across offices in Charleston, S.C., Raleigh, N.C., New York, Toronto, Los Angeles, San Antonio, Texas and Shelton, Conn. It's built digital content and commerce experiences for brands such as Casper, Charter Communications, Gerber, Panera Bread, Ticketmaster and others. (Disclosure: Adweek’s parent company, Beringer Capital, is an investor in Blue Acorn iCi.)
@iCiGreg Greg Boone is the co-CEO of Blue Acorn iCi. (Disclosure: Adweek’s parent company, Beringer Capital, is an investor in Blue Acorn.)