‘Digital first’ is a popular business phrase often without substance. When taking a closer look, the digital aspect of a company it’s too often the cherry on the cake, rather than the actual cake. But will these businesses realistically survive the next 10 years?
Beauty brand L’Oréal, is ‘convinced that science can help us make beauty more efficient, inclusive and effective’. Jaguar Land Rover has a community of innovators pushing the boundaries of mobility and connected cars. Its Tech Incubator has recently added three new start-ups, covering the fields of emergency response technology, artificial intelligence, and the electric vehicle ecosystem. Tesla, earnt a Net Promoter Score (NPS) of 92 from readers of PC Mag in its January Connected Cars survey, the highest NPS any brand received this year.
Not only are big brands serious about being digital first, it’s also quickly becoming core to business DNA. But what of those businesses that shy away from automation, digital investment, and technology innovation? In my view, they won’t survive the next few years. Technology evolution is so rapid and relentless, that if you’re not leading the way then you will get left behind. Consumer appetite for the next innovation to make life easier, more connected, and enjoyable is endless.
Investing in digital is also profitable. It reduces costs, automates processes and production, creates efficiencies, and gives businesses competitive advantage through proprietary data and technology ownership. For the first time in history, brands can have an interactive and direct relationship with customers.
Tesla, for example, has turned itself into an unusually profitable car maker, likely due to its direct sales model. Unlike other car makers, it doesn’t hand any margin to dealers. It has been doing all its software programming in-house, and taken a software and technology company first, and automaker second approach. Giving it complete control over everything from production to sales, and research and development to problem solving.
Digitising a business enables ways to improve sustainability metrics as well as corporate governance around diversity and inclusion. L’Oréal for example talks about inclusive responsible beauty. Looking at everything from improving product formulas and manufacturing processes to recyclable or reusable packaging. Its Modiface tool utilises augmented reality (AR) for virtual try-on and customers can buy via social commerce or voice ordering. L’Oréal isn’t only selling products, it owns a personalised end to end digital sales process.
From payroll to people, accounting to marketing, every facet of business should be digital first. Businesses need to be available 24/7 365 days a year and should revolutionise the way they operate accordingly. From building technology stacks and in-housing expertise, to owning technology infrastructure opens up huge opportunities. Goldman Sachs now purportedly employs as many engineers as technology companies.
As the metaverse develops, the need for businesses to interact with consumers digitally is only going to increase. A middle place where real life meets virtual to sell products, and brands are already experimenting with it. Timberland released a gamified digital experience called TimbsTrails, celebrating the stories around the Original Yellow Boot. Nikeland on Roblox lets players make friends, play games such as dodgeball and soccer, and customise their avatars at a virtual showroom. The first ever Decentraland Metaverse Fashion Week had over 60 brands involved from Estee Lauder and Dolce&Gabbana, to Selfridges and Forever 21. These are places where customers can interact with an experience, play games, meet a community, purchase products, try on clothes virtually, check sizing, enjoy rewards, and understand more about the product and the brand ethos.
Every brand should be looking at investing in their own technology. Owning your own technology ecosystem leads to faster, more efficient approaches, costs savings, continuous improvement and innovation, and direct access to customers and their data. It unlocks expansion, competitive advantage, and value. Adopting a more agile, scientific, and digital first way of working is no longer a nice to have, it’s essential for business survival.
Richard Wilson is CEO at CLICKON.