• Digital Strategy

Forget predictions – 2016 is all about value creation through elevated customer experience.

The start of a new year is upon us – when we begin to lay out a game plan to help achieve our business goals and objectives for the next 12 months. But even with a full calendar year ahead, it's the first 30-60 days that are crucial in implementing a strategy that’s fundable, manageable, and achievable.

For brand-side digital managers, it starts with an ambition to use digital as the means for driving organizational change, leading to efficiency and growth – not for simply meeting marketing objectives. Sustained success requires buy-in from across the organization, from the C-suite to the front lines. It also requires the right partners at the table from the beginning.

Heading into 2016, market-leading organizations are prioritizing the customer experience as a central consideration. This focus on improving engagement with customers, users, and employees is elevating the role of 'digital' from merely a concern of Marketing and IT, to one that saves legacy organizations from disruption and irrelevance. Digital now impacts every aspect of an organization, from consumer engagement to connected products/services, improved internal systems, and more broadly speaking, digital innovation. Regardless of category, a lasting organization constantly evaluates the role of digital across these areas of the business.

So, while some might argue that 'digital' is simply the way things are done today, I argue a better definition might be: 'digital' is now the means by which an organization either reactively adapts to market change or proactively secures a leading position within a vertical.

What did 2015 teach us?

In 2015, we saw both ends of the spectrum. Some organizations embraced the new connected economy, investing in smart digital strategies to change how they operate. Others struggled to consider their digital products in a completely holistic yet autonomous way.

Last year, we worked with a number of legacy brands (and by legacy, think Western Union, founded 165 years ago!) to make major changes to how they operate internally and externally. While it’s no secret that impacting change in legacy business can be a slow process, change is certainly happening. This shift towards digital (and design) as a strategic tool within the walls of traditional enterprise is a positive sign, and one we hope continues.

We also saw brands invest in, yet struggle to implement digital in a sustainable way. Creating a solid digital product is a capital-intensive endeavor – both dollars and resources – especially for mass-market organizations unable to release an MVP and follow a typical test and learn approach to product innovation. Audiences expect a full-feature experience and anything less than that loses the support it needs to succeed.

While we’re often tasked with helping large organizations "act like a startup," in practice this can be incredibly difficult. Even at this late stage of digital evolution, we’re still seeing a large share of enterprise organizations – from fashion and apparel to financial services – only scratching the surface. They’re contemplating their first move into mobile (beyond mobile web), limiting digital innovation to startup partnerships, or worse, putting next to no focus on their own legacy digital products and services. Consider the state of large scale e-commerce or online banking – both ripe for ambitious change but both typically left in a state of decay. While legacy organizations struggle with what Clayton Christensen coined as the Innovator's Dilemma, we’re hopeful 2016 will bring change.

The real challenge is to keep it simple. In contemplating the right bets to make in 2016, it would be wise to forget AI, VR, Blockchain, and Bitcoin for now. These are all great theoretical tools, but still largely in a state of irrelevance to most businesses. Perhaps the next 12 months will change that, but for now, organizations need to focus on what’s right in front of them.

These are a few recent trends that have become real, tangible, and proven strategies that we believe need the most attention...

Omnichannel – no longer just a buzzword, it's now a consumer expectation.

A future omnichannel utopia has been a hot topic for a while now, but today this trend is driven by consumer demand and a blurred perception of where engagement starts and ends across online (web, mobile) and offline (retail) channels. Ultimately, it's about making it easy for consumers to buy products with as little friction as possible, whether in-store or on the go. It’s also about merchants taking a new approach to inventory, like fulfilling in-store purchases online or vice versa. Traditional retailers are now seeing the value of integrated teams focused on delivering a solid customer experience, with less attention towards channel attribution because, at this point, they all support the same bottom line.

At the same time, digital-born retail brands like Bonobos, Warby Parker, and Frank & Oak have continued to invest in physical retail. These brands recognize the need to connect with consumers in the real world where consumers can see the product, touch the fabric, and experience the brand.

This also raises the issue of discovery, still a major challenge online. In fact, there are several startups tackling this very problem. The general theme: vertical retail is still incredibly lucrative but single-channel strategies are difficult, if not impossible, to grow and sustain.

On the legacy brand side, direct-to-consumer has become a completely logical way to operate, even within a typically wholesale business. Gone are the days of e-commerce eroding the wholesale channel – or at least the fear that it might. That was a business-led concern. Today, the concern is about reaching consumers who simply don’t care how a product ended up on a retailer’s shelf or website. Brands now have the complete freedom to sell direct, online and offline.

In 2015, we saw several clients tackle omnichannel head-on. On the fashion and apparel side, our client Kit & Ace tasked our team with rethinking how a retailer might blend commerce and culture, considering engagement both online and offline. This is a brand that has consumer engagement tightly woven into its DNA, with a carefully considered retail experience. So bringing this level of engagement into the digital environment in a consistent way not only makes complete sense, it builds on a fundamental brand promise.

While this kind of closed-loop experience requires a clear understanding of consumer needs and expectations, supported by a retail strategy that provides consumers a benefit to brand engagement beyond transactional, it also requires net new thinking to deliver an experience that’s not yet standard within the vertical. Often, digital innovation requires out-of-market influence, especially in fashion and apparel, where the staid approach to e-commerce has completely encompassed the market. The improved Kit & Ace digital platform is set to launch later this year.

Ultimately, a seamless online-to-offline experience needs to focus on an improved interaction between customer and brand.

UX in the enterprise – off-the-shelf platforms no longer cut it.

It’s not only customers that need consideration. Leading organizations are beginning to consider the impact of providing all users – especially internal teams – with better products and services to achieve their goals. This means building internal systems that veer away from the once common command prompt enterprise software towards tools that improve efficiency around the tasks and activities that keep a business running.

The rise of SaaS, the cloud, and products like Slack, Dropbox, and Google Docs are all influencing the value of better UX in the enterprise. This is helping change how organizations spin up new internal systems based around the user and a better user experience. In some cases, operational improvements towards efficiency are driving the push. In other cases, it might be retention. Employees now expect the same ease-of-use and simplicity in their work tools they have come to appreciate in the consumer Internet.

Also changing are the roles and responsibilities for how enterprise software is selected and implemented. IT-led initiatives tend to lean on COTS (commercial off-the-shelf) solutions with the expectation of saved time and offloaded maintenance and support. But IT-led digital projects rarely define their requirements around user needs and expectations, resulting in low user adoption and leading to a high degree of failure. The major shift we’re seeing is the introduction of the digital product manager within the enterprise. These digital leaders are pushing for internal projects to follow a more thoughtful process, planned around user needs first rather than around the latest technologies.

Western Union recently took this approach when they asked us to redefine an internal customer management system. The product of M&A, Western Union had several global offices each running their own tools, none of which completely met the needs of their brokers. Historically, in most enterprise organizations, this might lead to IT procuring some new form of technology based on an IT-led spec and not necessarily a clear sense of what users actually need. For this particular project, we were brought in to facilitate the workshops that would identify the right form of solution. This led to product definition and prototyping, later used to present the scope and strategy for the new system and to gain buy-in from the executive team. This approach is becoming all the more common, as these internal projects take on an innovation approach – using blue sky strategic planning to solve an identified problem, rather than approaching the problem with a predefined solution in mind.

This is just one example of many, where organizations are investing in better product design to improve how they operate. With products like Slack getting an enormous amount of coverage for making enterprise software more manageable, it’s safe to assume more organizations will begin to invest internally.

As the workforce continues to shift towards knowledge work, the quality of the tools used becomes critically important, and much of that depends on a thoughtful approach to user experience and design.

Branded Content – still the best way to engage an audience.

Branded content has been around for a long time, and yet, many organizations still struggle to find a compelling story to tell. Even in the B2B space, informative content is easily accessible, created at lower cost than ever, and distributed to targeted customers across online channels.

We believe getting branded content right starts with creating a clear view of the customer journey – mapping out how consumers research, compare, consider, and eventually select a product or service across a myriad of competing brands. With this clarity comes the ability to find better ways to reach new consumers, to connect on their journey, and to create engagement before they’ve had a chance to make a decision. This is in effect disrupting the traditional path to purchase (PDF). All organizations have an opportunity to guide consumer acquisition and manage retention through a stronger overall digital strategy, and much of this begins with defining a better approach to content.

This past year, Pirelli challenged our team to create a new brand story to better connect the premium tire brand with a highly-targeted US consumer segment, already on the path to purchase. Taking a platform approach to campaign strategy, we created an experience around episodic video, taking consumers on a visual journey through some of the most epic driving conditions in California. We told the story of the right product for the conditions, and used interactive, multi-camera and drone video, along with visualized data, to show the performance of the product in a live environment. Not simply entertainment, and not only informative, the video series set out to provide consumers with a near-real, in-car experience through highly-relevant, narrative, branded content. In the end we not only promoted a new product, but gave consumers the insight required to better understand the product’s performance attributes in a truly engaging way.

Digital transformation is central value creation.

As digital becomes a primary tool for organizational change, its ability to drive value continues to gain focus with CEOs willing to make the investment. That investment becomes substantially easier to make when one factors in the value created: personalized experiences, improved processes, operational efficiencies, data-driven insights, more intelligent customer interaction (both online and offline), and clearly, much more.

Stat-CEO-Digital-Investments

Thankfully, we’re now beyond the stage of needing to prove out the need for making digital a core concern. Today’s challenges are tied more closely to prioritization and determining the channels that will have the most impact to the business, while creating the most value for users.

As PwC noted in their recent January 2015 Global CEO Survey (PDF), “access to information has, in turn, transformed how customers perceive value and the type of relationships they want to have with companies. So it’s understandable that 81% of CEOs see mobile technologies for customer engagement as most strategically important for their organisation – more than any other digital tool.”

Digital innovation is certainly not easy. As technology constantly evolves, there are limitless new considerations each and every day that any digitally-minded team will struggle to keep up with. Organizations should absolutely experiment – allocating budget for exploring new tech, new business models, and new forms of engagement – and some wins may come from those efforts. However, there still exists a need for focus on foundational digital efforts core to the business today. Being dead set on value creation should be an absolute priority for organizations in 2016.

Stephen Beck Founder & CEO