By Peter Moody, Managing Director at MullenLowe Profero
I think we have all heard enough about how quickly we have adapted to working from home, the constant play on words of “new normal”, “next normal”, “old normal” (whatever that means) and the “I told you so” smugness of digital transformation agencies (yes, I am from one of them!) who have been talking with retailers for years about their need to embrace D2C business models, e-commerce et al.
We have fallen in love with Zoom, House Party and with the sudden utilisation of Teams; even Microsoft feels a bit cool. We forgot about Brexit (don’t forget as the EU Transition period ends at the end of this year), we horded toilet roll and hand wash (then realised we didn’t need to) and even flour was in such short supply that the Great British bakers were at a loss.
There is a lot going on.
Yet with shops starting to open up and supply chains starting to move again, there will be many questions asked and decisions to be made about what we can learn from this, what has changed or what has just been accelerated up the to-do list.
Ultimately there will be two approaches. The first will be those who just react to anomalies, a focus on short term gains and a hope that they are first to the party. This is a dangerous strategy considering the volatility of today’s market and consumer mindset but some changes in purchase behaviour might just be too tempting for some.
The second are those who are ready to challenge this digital transformation, take the learnings from their operations (both within the last six months but also the last couple of years) and push forward with their plans, many of which have been sitting there, either going nowhere or going incredibly slow.
It is in fact this organisational drag that has been the Achilles heel of many retailers.
According to a report pre-COVID from SAP, 84% of companies regard digital transformation as crucial, yet only 3% have actually finished a company-wide effort.
It is time to stop debating and deliberating because the biggest learning for us all in recent months is that we are far more prepared to embrace the future than we think.
Another aspect is going to be the importance of building distinctive brand experiences and not standardised customers experiences in the digital world. How do you stand out as a restaurant on Deliveroo? Why does every maps app fundamentally look the same? In a recent Forrester report, 82% of all spending on digital experiences is yielding parity or laggard differentiation. If the struggles of the physical high street are to continue then an increased level of care and effort is required to building a far better and branded future front door.
These shifts will also start to ensure that approaches to data move from just data collection to data creation.
Harvard Business Review stated that 69% of companies reported that they have not created a data-driven organisation. Most of what companies work with is latent data, not created for a specific purpose to answer a specific question.
The key to deriving value from data is proactively creating what is needed to answer specific business questions. Again, none of this is new, but closing the gap between observation and actionable insights, to drive business and brand results has never been more important.
Finally, how brands innovate moving forward and ensuring that digital tools drive impact and value rather than vanity will be open to much debate. Businesses that are not reaping the benefits of digital transformation will find that they are focused on providing solutions to the wrong challenges and questions. COVID has taught us to prioritise what is important, what is critical and what is not. Budgets to invest during and after the pandemic will be tight and the need to drive a strong return will be on the minds of any retailer.
Originally published in Retail Sector, on Thursday 25th June here.