Digital Transformations Are Forcing Brands Like Keds and Pernod Ricard to ‘Change or Die’

The 2 companies are overhauling how their teams work

The online marketing industry is like a statistical minefield nowadays.
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About a year ago, Keds started noticing that women were posting lots of photos of themselves on social media wearing the brand’s shoes at weddings. So, its social media and web developer teams started working together to create a shoppable feed that pulls in social posts on Keds.com.

It may seem like a relatively minor move, but it’s the kind of project that speaks to Keds’ larger goal of becoming more collaborative and agile as it goes through a so-called “digital transformation.” Since joining Keds two years ago, CMO Emily Culp has worked to bring ecommerce, marketing, social media and public relations under one team that’s increasingly laser-focused on treating Keds.com as the brand’s “No. 1 store in the world.”

“It should be your perfect merchandising opportunity, and it should be customized to whatever consumer,” Culp said. “That’s how we think about it—we flip the content-creation funnel on its head to make sure that we think about digital and mobile content first, and then we fan out to all the traditional channels, even down to visual merchandising in stores.”

Keds has good reason to mix up its culture and how it works. As Amazon and other shopping sites make shopping at brick-and-mortar stores increasingly obsolete, retailers are scrambling to move from physical to digital storefronts and pouring money into slick websites, apps and tools to analyze chatter on social media. While Keds’ parent company, Wolverine World Wide Inc., recently reported earnings that beat analysts’ estimates, the brand is also aggressively closing physical stores, shutting down 180 locations this year.

“Because of the digital intention for [retailers], which is, ‘I’ve got to change or die,’ they’re moving fast,” noted Garth Andrus, human capital leader at Deloitte Digital.

Cultural tension

That kind of rapid change can cause plenty of tension and rifts, especially within legacy companies like retailers, consumer-packaged-goods brands and manufacturers that are under particular pressure to perform.

“You’re starting to operate differently in a pocket [of a company] and then that leads to the need of rewiring for processes and those functions within a function,” Andrus said. “When the processes of the new area of the group that’s being more digital hits the part of the organization that isn’t very digital, the white blood cells attack and want to stamp it out. If an organization doesn’t take action on that intentionally, the strength of the current legacy culture can snuff out the nascent digital activities that are beginning.”

Andrus declined to name specific clients but in one example, a top 10 company in the Fortune 500 hired Deloitte Digital to rework the organization, which had four different mini operating units. Deloitte then consolidated the four groups but created nine levels of hierarchy in the process, which caused problems with setting expectations for employees.

“They needed things turned around in a very short period of time like hours versus days or weeks, and the organization literally said, ‘We don’t do things like this. We need two weeks. We need people to sign off on things,’” Andrus said. “This part of the organization was like, ‘We can’t operate like that. You’re killing us with our customers who are expecting immediate answers to things or solutions.’”

“When the processes of the new area of the group that’s being more digital hits the part of the organization that isn’t very digital, the white blood cells attack and want to stamp it out."
Garth Andrus, human capital leader at Deloitte Digital.

Interestingly, the people most averse to change are not typically the oldest generation, Andrus said. It’s Gen Xers between 37 and 50 who remember predigital offices but “haven’t maybe experienced all the things that the older group has.”

Baby boomers, on the other hand, “get it because they have millennial children plus they’ve been around the block a lot more,” Andrus said. “They’ve looked at us and said, ‘This is different. This is not an incremental change. This is a fundamental transformation of business and if we don’t change, we’re going to be out.’ They know that it’s change or die.”