The Cost of Delaying Digital Transformation in a Post-Covid World
Over the past decade, the digital revolution has been accelerating at an exponential rate. The arrival of 5G networks and superfast, ultrafast, hyperfast and gigafast broadband has resulted in the proliferation of mobile apps, voice assistants and e-commerce – transforming every facet of daily life.
87% of adults were daily users of the internet in 2019, with the average Brit spending 2 hours and 34 minutes online via their smartphone each day. In 2018, 46% of internet users spent their time online shopping (27 million), with e-commerce sales for the year totalling £688 billion. Before the word coronavirus had even entered our vocabulary, it was predicted that the internet would account for 53% of retail sales by 2028.
Despite rapidly changing consumer behaviour and needs, some businesses have been slow to adapt, stubbornly favouring the traditional face-to-face delivery of products and services over digital solutions. It wasn’t until the arrival of the coronavirus pandemic and lockdown restrictions earlier this year that they were forced to seriously rethink the way they interact and transact with customers, or risk being left behind.
Why it pays to put customer experience at the heart of business
Many sectors acted fast to offer virtual replacements for their previously physical offerings in order to avoid complete shutdown, while others found ways to modify their physical offering to limit contact and reduce consumer risk.
Take for example, healthcare providers who moved rapidly into telemedicine, educators who transitioned to 100% online learning and digital classrooms, restaurateurs who offered pared-back menus for delivery only, plus the many retailers who pivoted to offer contactless shopping and home delivery.
As consumer reliance on online services has increased significantly in recent months, so too have expectations. Creative thinking has enabled many businesses to thrive during the pandemic, successfully building digital confidence and trust, even among the consumers most resistant to digital. They’ve done this by meeting consumers where they are today, catering to their changing needs, and delivering positive online experiences. It should come as no surprise that the businesses that can successfully help consumers navigate the pandemic safely will establish a strong advantage.
Shifting focus to support digital products and services is a no-brainer for any business ell-positioned to meet consumer demand via digital channels, while others will need to develop digital functionalities to ensure continuity of services in the short-term, and to build resilience in the long-term. Whilst lockdown has lifted and the immediate crisis appears to have passed, the implications for consumer expectations and behaviours will be long-lasting.
Reducing the cost of digital services, defaulting to home delivery and converting to contactless operations are three quick wins for any business. Automating key points in the customer journey will offer a seamless and highly personalised digital customer experience, cutting costs over the long-term, saving time and reducing reliance on staff.
Why digital adoption is no longer optional
In the world of fashion, where e-commerce is a prerequisite, some of the biggest names on the British high street have long resisted the urge to go digital and suffered greatly during lockdown. Take for example Primark, which earned £0 in sales between 22 March and 14 June when its 153 stores in England were closed. Not having a transactional website cost the company around £650 million for every month that all stores were closed, adding up to an eye watering £1.9 billion.
Relying on bricks and mortar alone, and refusing to adapt a strategy that doesn't lend itself well to e-commerce didn’t do Primark any favours. Should lockdown occur again in future, or indeed any event that prevents a full return to business as usual, it will be interesting to see if businesses with more traditional models double down or if the penny will finally drop that they need to evolve in order to survive.
In this new business environment retailers in particular will need to prioritise transparency in the supply chain, the ability to detect purchase-pattern changes, and accurate up-to-the-minute inventory information. This will be essential, not only for increased efficiencies, but to combat the panic-buying of essential products should we see a second wave of the disease.
Coronavirus or no coronavirus, digital adoption has always made good business sense resulting in significant gains in efficiency, customer satisfaction and revenue. A study by the SAP Center for Business Insight and Oxford Economics, found that 80% of companies that have undergone digital transformation efforts reported increased profitability, while a McKinsey study highlights that digital transformation and a focus on customer experience can generate a 20-30% increase in customer satisfaction and economic gains of 20-50%.
Time is no longer a luxury
Businesses no longer have the luxury of time, mapping out future digital strategies in line with growth expectations or becoming stuck in a cycle of test and learn. In a post-Covid world, they have little choice but to follow where the consumers are if they are to keep pace with the competition and remain relevant. For many, scale and speed of innovation will be crucial.
To those who seize the opportunity to redefine their business, putting digital at its core to enhance the user experience and develop closer ties with customers, will come the rewards. For never has the proverb "necessity is the mother of invention", rang true more than now.
If you have any questions or want to discuss your CX digital transformation strategy, get in touch, we're here to help.