No one celebrating the 2020 new year anticipated the global transformation that would take place in only a few short months. The aspirations of businesses everywhere were presented as their “2020 Vision.” That vision quickly changed.
A global pandemic hit and took everyone by surprise. Businesses that never thought of adopting remote working were forced into it. Everyone from executives to entry-level marketers found themselves working from home. And too many businesses closed their doors for good.
With all of this happening, another transformation took place.
This transformation was a human one.
Priorities have changed. People were forced to strip their lives down to the basics - down to only the most important things. Isolation and stay-at-home orders have caused people to focus on their relationships, real-human connections, their community, and reconnecting with nature. Most importantly, people are focusing on their health and wellness - especially mental health. People realized that they don’t need materialistic goods and instead are now focusing on what is intangible and priceless.
Simultaneously, many people have lost (or may lose) their jobs. As a result, consumers are tightly saving their money and spending only on products and services that will bring deep, positive, and meaningful value to their lives. For example, this could be essential items, meaningful experiences, things that bring them comfort or connection with others, time-saving services, or home upgrades.
Because consumers are now so much more conscientious of how they spend their money, companies now more than ever must appeal to their consumers’ deeply held core values. They must not only demonstrate clearly how they deliver on these core values but also how they can do it better than their competition.
The only way brands will survive is to align their offerings with their customer, giving them what they want, when they want it, and how they want to get it as easily and intuitively as possible, and digitization is a crucial tool to achieve this.
The key to success in this new normal is for companies to go back to the basics: Consumer Insights 101 - really knowing and understanding your customer. Your consumer has fundamentally changed and you need to get to know them again. The companies that care enough to re-learn the priorities of their customers will have an unfair advantage moving into the post-pandemic era.
If your customer has evolved in profound ways, old customer insights research is outdated and irrelevant. This means companies need to reinvest in consumer insights.
Many companies utilize traditional consumer market research methodology, such as in-person focus groups, one-on-one interviews, manual mind-mapping, and ethnographies. Technology enables faster gathering of real-time information to supplement these older, slower methodologies with deeper, more predictive, and higher quantities of data and insight.
Today, machine learning and artificial intelligence algorithms can create hyper-accurate models of consumers, including the messages that resonate with them, the products they are most interested in buying, and the external issues and concerns that will impact their shopping and buying behavior. Data-enrichment tools are integrated with the technology of business today that allows the gathering of accurate and relevant information on your customers. Tools like social listening, chatbots, digital surveys, and video focus groups are great real-time channels to smartly aggregate the data needed to inform transformation decisions.
The Covid-19 pandemic had a dramatic impact that shifted the priorities of entire populations and molded a new set of beliefs that are impacting commerce. These are some of the issues that have risen in prominence since the pandemic:
Environmental journalist Jenna Tsui wrote in Environmental Protection that 75% of consumers will remember the companies that stepped up to help during the pandemic. And, in her opinion, this sentiment will carry well past recovery.
Moving forward, consumers will become loyal to companies that make a meaningful effort to protect their customers, which highlights "green" companies even more. Tsui says, "With the overlap of public health and environmental impacts, though, it is safe to say that many consumers will focus on how businesses combine the two areas."
According to Accenture's report, the top priority in the evolving consumer needs landscape is health and wellness.
Mental health has also become a concern, as isolation, the disruption of routine, and economic impacts added increased levels of stress and anxiety to the mix.
Without excess stimulation, people were forced to focus on, well, people again! And, being forced to work remotely - from home, because public coworking was also off-limits - the experience of isolation made human connection front-of-mind. And, according to CNBC, 50% of people report a decline in their mental health due to remote work and isolation.
The preoccupation with material goods has been replaced with a focus on relationships and community.
As businesses were shut down for extended periods of time, millions of people had their income reduced and a large portion lost their income completely.
Because of this, consumers are more interested in value-based purchasing as the necessity of frugality became the norm.
Consumers want to spend more time doing the things they love, which means spending as little time as possible on unpleasant or mundane tasks.
In a RetailDive.com article, Buyvoets said,
"To win the loyalty of their consumers means optimizing the basics – free-returns, priority pick-ups, seamless customer experiences, etc. In the end, the retailers that foster loyalty will be the ones who offer better personalization, transparent communication, and a digital experience that goes above and beyond."
At the end of the day, a lot of your customers' core values have changed. Therefore, to retain customer loyalty and attract new customers, you must learn to deliver the experiences that reflect these new values.
According to a February 2020 report in Small Business Trends, 71% of consumers now say they prefer buying from companies aligned with their values.
Jim Nail, a Principal Analyst at Forrester, reports statistics that agree. He reports that 68% of consumers are influenced by a company's reputation of social responsibility. In other words, companies that are publicly values-aligned with their customers have a loyalty advantage.
Identifying specific features and benefits that align with the values and priorities of your customers is key. Focusing on the value-driven features and benefits your solutions do better than your competition is golden information to a new conscientious consumer base.
Now that you've mapped your offerings to the core values of your post-pandemic consumer, your digital transformation efforts must be efficiently focused on enhancing the features or benefits that deliver the value to the consumer. Many companies make the mistake of trying to digitize everything, which is expensive and can produce features customers don’t care about or even actively dislike.
A better approach is to focus digital transformation on the features and benefits that differentiate your offering based on the core values of your customers. Doing so will allow you to spotlight your unique, value-based features and benefits against your competitors, which will resonate with your target customers. That is, assuming you truly took the time to relearn your customer.
Here are some examples:
The timing of emerging technologies that enable delivery on transparency and trust couldn't have been better as consumers’ concern about these aspects has skyrocketed.
Blockchain, for example, is increasing product traceability and transparency. Wal-Mart has leveraged blockchain in its sustainable sourcing pilot program with IBM to record sourcing and supply chain data to track and follow individual mangoes from the farms in Mexico to the sales display.
Technologies such as blockchain and machine learning have increased the speed of business as well. Supply chain flexibility and inventory management are some of the ways companies are being more efficient.
The bottom line is that delivering on your customers’ most important core values and giving her a great experience is key. These are only a few examples of how a company can do so. For more examples of delivering amazing customer experiences, check out Digital Commerce Trends: Shaping Customer Experience for the Next Decade.
Companies must determine how they are going to accomplish their digital transformation. There are three main paths to accomplishing this:
Some companies may want to just buy the necessary technology and implementation teams by acquiring businesses with the desirable IP.
The value in acquisitions is not always in the company's valuation. In many cases, acquisitions occur because the acquiring company values the talent and leadership present at the acquisition - these types of acquisitions are called “acqui-hires.”
The downside is that talent doesn't always stick around long after acquisition. Exit strategies are usually part of the acquisition agreement. The long-term effectiveness of the acquisition is usually determined by how well it retains essential talent or how it is absorbed into the parent company.
For smaller companies with limited resources, borrowing the needed IP through licensing is a popular choice. There are software companies that have developed total solutions or integrations and plug-ins that can be licensed.
The advantage of borrowing is that the solution is ready to go and needs only to be integrated into your platform. You also have the benefit of getting future upgrades and features, though those are usually offered for additional fees.
The downside is that your competitors can, and probably do, use the same offerings. There is little room for actual differentiation and increased competitive advantage.
If a company wishes to build their digital intellectual property, they will need an in-house team or a trusted partner to help.
In most cases, building an in-house mechanism to drive digital transformation is expensive and slow-moving. It's slow because finding and retaining the right talent with the right experience can take a long while. Then, dealing with turnover becomes an issue in and of itself. However, if successful, building proprietary infrastructures and platforms gives companies competitive advantages as their IP cannot be copied by competitors.
Most companies cannot (or will not) afford the infrastructure required to do this completely in-house. Partnering with a trusted external company addresses most of the disadvantages of building in-house.
If digital transformation were simple, everyone would already be doing it. It would naturally happen through iterations over time. However, that is not reality.
The reality is that the strategic component of digital transformation is the most valuable component. Everyone has access to the same technology, but how that technology is utilized is the difference-maker.
Accenture reports that 90% of larger enterprises (revenues over $1 billion) outsource digitization. Obviously, these companies have the resources to build in-house.
Why do 90% choose to use external strategic partners?
Because the advantages are too valuable to ignore:
These are the benefits our clients enjoy when they work with us at Nisum as a strategic partner in digital transformation.
Nisum has the expertise and experience required to deliver clear strategies that drive digital transformation. The technical ability to develop solutions is a given - it's the strategic element that brings the most value. And that is where Nisum excels.
Nisum has 20 years of being digital commerce leaders, helping transform Fortune 100 companies such as GAP, Macy’s, Safeway/Albertsons, Williams-Sonoma, ScotiaBank, LATAM Airlines, and more. With offices worldwide and a global workforce of over 1,400, Nisum is nimble and flexible enough to build customized solutions tailored to your needs, while also large enough to approach your specific challenge with holistic, full-service solutions.
At the end of the day, the customer is the judge of how well you have integrated their needs and values with your brand. Nisum is an expert at bridging those two together through digital initiatives that make a difference.
Let us help you transform. Get in touch with our Digital Transformation experts today.