It’s time for change. The impact of Covid-19 has significantly accelerated technology adoption and established digital transformation as a key growth agenda for brands in every industry. “We’ve seen two years’ worth of digital transformation in two months,” said Microsoft CEO Satya Nadella in an April 2020 earnings call. “From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security – we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything.”
With the world accelerating even more rapidly toward digital, the new year is an opportunity to reflect on the past and approach 2021 with new intent. To stay relevant, stay ahead, and stay competitive in this new business and economic environment, companies need to shift their mindsets and adopt new practices in the new year.
Consumers recognize the importance of purpose and have begun holding brands accountable. Consumers are 4-6x more likely to buy, trust and champion companies with a strong purpose, according to a study on the “strength of purpose” conducted by Zeno Group.
VF Corp, which owns brands like the North Face, Timberland and Vans, chose to boycott Brazilian leather when the Amazon was burning for weeks. This was closely aligned with their purpose, which is to “power movements of sustainable and active lifestyles for the betterment of people and our planet.”
Companies must consider the negative impact of following the Friedman Doctrine – which advises that a business’s responsibility is to its shareholders – versus leading with a strong purpose championed by leadership.
Reinvent the organization for speed
The pandemic has stress-tested companies to the point of breaking their organizational models, prompting them to adopt new ways of working at speed. Traditional management-led hierarchies are being replaced by flat structures that empower decision-making, increasing the organization’s ability to perform better at scale and with speed.
To grow faster, businesses need to look beyond their current models to form new partnerships and create new paradigms for flexibility and agility. PepsiCo did this to enable fast and easy access to their products during the pandemic, launching two direct-to-consumer (D2C) websites with less than 30 days from concept to execution.
The future is digital commerce
The pandemic accelerated years of digital commerce growth in a few weeks, putting digital commerce sales at an all-time high. The number of online shoppers will only continue to rise, with eMarketer projecting that 150 million more people became online shoppers in 2020 compared to 2019.
Adidas established itself as a top digital commerce player, targeting 4.0 billion euros ($4.9 billion USD) in online sales – 12% of their overall business – by 2020. Long term, they expect that portion to rise to 25%. Adidas was able to bounce back quickly from the pandemic with an increase in digital commerce sales during lockdown.
To capitalize on the rapid rise of digital commerce, companies need to accelerate and optimize both B2B and B2C digital commerce channels (including marketplaces, social commerce and D2C). As customers demand speed and efficiency, customer experience becomes an imperative to overcome the competition.
Culture of experimentation
The path to understanding and meeting customer expectations is clear: There is no innovation without experimentation. Building a culture of experimentation is a critical step toward being competitive, and it starts by leveraging data for iterative experimentation.
As Amazon founder and CEO Jeff Bezos once said, “Failure and innovation are inseparable twins.” Digital native companies like Amazon, Apple, Google, Facebook, and Alibaba have all embraced the power of experimentation to successfully innovate and offer better customer experiences and services.
Test small, new ideas to see what works and what doesn't, with an end goal of rolling out new products, improving customer experiences and developing new business models.
Customer data transparency
Data transparency has become one of the key elements of customer engagement. With an accelerated surge to digital, the total amount of data created, captured and consumed worldwide will more than double by 2024.
In the new year, as we recover from this crisis, take time to consider what the future looks like for your business. The swift transition to a new normal will depend on how quickly companies adopt new practices, new technologies and new innovation.
Please reach out if you have thoughts to share, and I wish you a very happy new year from all of us at Accenture!