Digital now really the most important sales factor
This year, more than 50% of global sales will be digitally influenced. Digital media, and the mobile phone in particular, have become an integral part of our society. The impact on total sales of businesses cannot be underestimated. Yet many directors and companies are still struggling with this. How do you deal with this in the right way and how do you create an optimal digital business? What steps can you take now to make a difference tomorrow?
Five years ago (end 2015[1]), Forrester asked nearly 500 executives of organizations with more than 250 or more employees to estimate the total revenue generated by their business through digital products/services or products sold online (e.g. eCommerce, advertising, sales of apps, data). Based on their responses, analysts at Forrester predicted how much of total sales will be affected digitally. Of the total sales of services and products, both sales to consumers and sales to businesses, 47% would be affected by digital media by 2020. For various industries, these percentages are respectively slightly higher or lower: FMCG around 45%, Business Services around 49%, and Retail around 58%. In short, almost 1 in 2 sales made are influenced digitally. This seems a very conservative estimate, especially now we know that in 2018 already more than half (55%) of all retail sales in Europe are digitally influenced[2]. With the further acceleration of digitisation in business, and in particular mobile digitisation, as well as among consumers or customers, this percentage will probably already be much higher than earlier predictions.
Are we ready?
We are now in the year 2020, but it seems that companies are still struggling with digital disruption and that drivers are not ready for it.
Only one in four CEOs have a clear digital vision. Only 20% of companies are sufficiently equipped and prepared for the continuous digital disruption. And, in addition, almost 80% are not yet ready when it comes to setting up the necessary, organisation, culture, employees, processes and technology. Let’s take a closer look at the various topics.
Vision
A sharp vision on digital business operations is simply a necessity today. Just as digital acting and thinking has become part of our own daily lives, it must also be an integral part of the vision of organisations. And especially digital should be included as an integrated part of that vision. A vision in which digital is not mentioned means in practice that you miss out on a large part of potential turnover.
Only 26% of CEOs have a clear vision on digital.
Organisation and culture
Digital must be one with the design of organisations and the corporate culture. Culture and structure must be fully harmonized with the way customers today want to connect with companies and experience their products or services. The advent of digitization has blurred many traditional “barriers”. Think for example of barriers to find information, to communicate with others, or to make payments. The world has become much more transparent. And more complex, both in terms of their internal communication, as well as the design of organizational structures and the internal culture are immediately visible and noticeable to (potential) customers or relations.
Only 21% of organisations have the right culture
Processes
Processes help organisations to realise the value chain as efficiently and effectively as possible. Value creation and value perception has changed drastically with the rise of digitization. Operation and customer experience are no longer separate, but are now very closely connected. It is necessary to review the current processes to see if they still meet the needs and expectations of the customer. Not having the right processes has a direct influence on the maximum value that can be delivered to the customer.
Only 14% have the required processes in place.
Employees
The right digital knowledge and skills make all the difference. The digital landscape is constantly changing. New developments follow up faster and faster. This also leads to changes in the way connections are made and relationships are maintained between customers and companies. For employees in organisations, this means that new knowledge is often specific or in-depth in order to keep up with these changes. In addition, extra capacity is often needed to be able to carry out the new activities properly. The lack of capacity and knowledge can quickly result in loss of turnover or lack of growth. For example, because the right guidance, management and cooperation is lacking.
Only 16% have the required FTEs and skills, and 21% have the right people.
Technology
Technology in a digital age is indispensable. Automation of processes, collection of data, availability of reports and insights are part of good digital business operations to deliver maximum value and thus generate value for the company. The possibilities with technology are often much further developed than companies can handle. As a result, the technology is often used to steer how organisations need to change and processes need to be adapted. Not putting the customer and customer value first in digital transformation or technology implementations often leads to failure. As a result, investments do not deliver the desired results and companies and customers end up being further and further apart from each other.
Only 19% have the necessary technology in house.
What’s next?
For many organizations there is still a lot of work to be done, but fortunately it is not (yet) too late to change this! However, it is necessary to implement the right measures quickly or more quickly.
The most important factors that determine the success of a digital business, according to Forrester, are (1) delivering exceptional customer experiences, (2) creating new sources of value for customers and (3) securing understanding and leadership among the leaders and managers within the organization of digital business.
What can you start tomorrow?
- Make the customer number 1 again
- Hold up a mirror to yourself as if you were the customer yourself and experience how your customer experiences your business
- Dedicate time to it, so roll up your sleeves and put on your boots and start
- Do a search for your own company, or dive into your website.
- Take the lead and set up a task force with internal and external specialists and experts
- Focus on the most valuable business activities and make them small when you start a digital transition
- Review your current value chain – starting and ending with your customer
- Go into the depths with your team and your desks and challenge them and put things on edge
- Dare & make choices – not both or all at once
- Translate digitally to everyone’s personal goals in the organization.
- Also steer on digital KPIs in your management meetings
Of course, these types of activities are not always immediately practicable due to busy schedules and other issues that need to be followed up first. But realise that potential customers nowadays also have busy schedules and other things that need to be followed up on. So if a potential customer knocks on your door with an interest or purchase intention, you open the door, right? We understand that this is sometimes difficult. Especially when it comes to digital business operations, where experience and expertise are still lacking. Our business guides at TheNewTomorrow will be happy to help you open the doors and let your business grow or flourish and not leave any money lying around.
[1] Source: Forrester The State Of Digital Business, 2015 To 2020 – 2 November 2015, https://www.forrester.com/report/The+State+Of+Digital+Business+2015+To+2020/-/E-RES119838#,
[2] Source: Forrester Digital Influences Over Half of In-Store Sales in Europe – 27 Februari 2018, https://go.forrester.com/blogs/digital-influences-over-half-of-in-store-sales-in-europe/
