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Digirati and the +26%; KeyNote for the Retail Leaders Forum, 2014

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Information about Digirati and the +26%; KeyNote for the Retail Leaders Forum, 2014
Business & Mgmt

Published on March 5, 2014

Author: bengilchriest

Source: slideshare.net

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Ben Gilchriest Digital Transformation Lead, ANZ Capgemini Consulting @BenGilchriest DIGIRATI' AND$THE' +26%'DIGITAL'ADVANTAGE' March,'2014'

In'the'past'decade'the'world'Australian'customers'and'retailers'operate'in'has' fundamentally'changed,'we'have'entered'the'2nd'Machine'Age' LEAPS IN CONNECTIVITY %$of$Australian$ households$with$ internet$ Max.$internet$ connecLon$speed$ (residenLal)$ RISE & DIGITIZATION RISE OF MOBILITY OF INTERACTIONS No.'of'Users'by'PlaCorm,' 2013E'2014' %'of'Australian’s'with'a'mobile' phone' 100$ 2003' 2014' 2003' 1.46 Mps 60$ OF THE MICROMULTI-NATIONAL Achieving'scale'without'mass' 1200$ Facebook$ 80$ 53%$ DAWN 1000$ 40$ 20$ 800$ 0$ %'of'Australians'transac<ng'on' mobile' 2014' +80%$ 100 Mps 12%$ 2012' 400$ 37%$ 2011' TwiRer$ 600$ Combining'digital'innova<ons'at' tremendous'pace' 200$ Google+$ MySpace$ 0$ 2003' 2014' Source:$Capgemini$analysis;$“Our$Digital$Future”,$Capgemini,$2013;$“The$Second$Machine$Age:$An$Industrial$ RevoluLon$Powered$by$Digital$Technologies”,$Capgemini,$2014.$ $ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 2$

This'has'driven'a'major'shiK'in'the'expectaMons'customers'have'of'how'they'can'engage' with'retailers' REQUIRED$ INTERACTION$ MODEL$ CUSTOMER$ POSITION$ THE PAST IN'THE'DARK' InformaLon$poor.$ Limited$choice.$ Faceatoaface$the$preference.$ “TELLING”' Mass$markeLng.$ Outbound$blast$communicaLons.$ ReacLve,$inbound$service$model.$ NOW EMPOWERED$ Pull$content,$benchmark$on$trust,$ authenLcity$and$value.$ Constantly$changing$&$sharing.$ High$trust$in$peer$review.$ Benchmark$across$industries$&$ geographies.$ “CONVERSING”' Embrace$social$(P2P)$&$coacreaLon.$ Onaline$and$mobile$at$the$core.$ Constantly$changing$needs.$ Source:$Capgemini$analysis.$ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 3$

With'your'customers'demanding'more'and'more'it'can'be'easy'to'just'jump'in' MOBILE SOCIAL ANALYTICS Digital'transforma<on'is $ the$use$of$ NEW digital$technologies$to$ enable$major'business' EMBEDDED DEVICES $ IMPROVEMENTS $ $ $ ENHANCED CUSTOMER EXPERIENCE $ $ $ CREATING NEW BUSINESS MODELS STREAMLINING$ OPERATIONS$ $ Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$ 2011.$ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 4$

WHAT'is'the' organisaMon' doing'' (digital' investments'&' assets)' DIGITAL INTENSITY Digital'maturity'is'a'combinaMon'of'“what”'and'organisaMon'does'and'“how”'they'approach' it' HOW'is'the' organisaMon' doing'it' (vision,'governance' &'roadmap)'' TRANSFORMATION MANAGEMENT INTENSITY Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$ 2011.$ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 5$

WHAT'is'the' organisaMon' doing'' (digital' investments'&' assets)' DIGITAL INTENSITY ‘Beginners’'may'be'carrying'out'some'experiments'though'are'largely'skepMcal'of''value'of' digital' BEGINNERS This is not for us! HOW'is'the' organisaMon' doing'it' (vision,'governance' &'roadmap)'' TRANSFORMATION MANAGEMENT INTENSITY Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$ 2011.$ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 6$

WHAT'is'the' organisaMon' doing'' (digital' investments'&' assets)' DIGITAL INTENSITY ‘ConservaMves’'have'a'digital'vision'and'strong'governance'though'have'few'advanced' digital'features' BEGINNERS CONSERVATIVES This is not for us! Analogue focus HOW'is'the' organisaMon' doing'it' (vision,'governance' &'roadmap)'' TRANSFORMATION MANAGEMENT INTENSITY Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$ 2011.$ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 7$

‘Fashionistas’'have'many'advanced'digital'features'though'they’re'run'in'silos'and'there'is' no'over]arching'vision' FASHIONISTAS WHAT'is'the' organisaMon' doing'' (digital' investments'&' assets)' DIGITAL INTENSITY Digital Digital Digital Digital Digital BEGINNERS CONSERVATIVES This is not for us! Analogue focus HOW'is'the' organisaMon' doing'it' (vision,'governance' &'roadmap)'' TRANSFORMATION MANAGEMENT INTENSITY Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$ 2011.$ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 8$

‘DigiraM’'have'a'strong'vision'and'clear'governance'with'many'digital'iniMaMves'generaMng' business'value'in'measurable'ways' FASHIONISTAS DIGITAL INTENSITY Digital Digital Digital Digital Digital DIGIRATI Strong$digital$vision$ Good$governance$ Strong$digital$culture$ DIGIRATI'OUTPERFORM' THEIR'PEERS*' ' +9%'Revenue' +26%'Net'Profit' +12%'Market'Valua<on' BEGINNERS CONSERVATIVES This is not for us! Analogue focus TRANSFORMATION MANAGEMENT INTENSITY Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$2011;$ “The$Digital$Advantage;$how$digital$leaders$outperform$their$peers$in$every$industry”,$Capgemini$–$MIT$ publicaLon,$2012.$*$Average$performance$difference$for$firms$in$each$quadrant$versus$the$average$performance$of$ all$large$firms$in$the$same$industry$for$the$184$publiclyatraded$companies$in$our$sample.$ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 9$

On'average'Retail'and'CPG'sectors'are'making'good'ground'but'only'a'quarter'of'companies' are'in'the'‘DigiraM’'quadrant'and'many'are'falling'into'transformaMon'traps''' The'Biggest'Transforma<on'Traps' Retail'&'CPG'Digital'Maturity' •  A$decadealong$history$with$digital$disrupLon$has$seasoned$ retailers,$producing$a$number$of$DigiraL$(26%).$ •  For$CPG,$less$than$25%$are$‘DigiraL’,$with$many$other$ companies$lagging$far$behind.$ •  The$most$significant$barriers$to$Digital$TransformaLon$are$desire,$ money,$and$tools.$ No'“burning'plaCorm”'/'sense'of'urgency' FASHIONISTAS 39%$ DIGIRATI “We'don’t'have' <me'for'this'right' now”'(53%)$ Not'enough'funding' The “What” 33%$ RETAIL (global) Limita<ons'of'IT'systems' 30%$ Roles'&'responsibili<es'not'clear' CPG (global) 28%$ Unclear'business'case' BEGINNERS CONSERVATIVES The “How” 27%$ Business'units'implemen<ng'in'silos' 24%$ “We'don’t'know'how' to'do'that”'(52%)$ “I’ll'lose'influence'in'my' company”'(23%)$ “It’s'not'worth'the' risk”'(18%)$ Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$ 2011;$“The$Digital$Advantage;$how$digital$leaders$outperform$their$peers$in$every$industry”,$Capgemini$–$MIT$ publicaLon,$2012;$“Embracing$Digital$Technology$a$a$New$Strategic$ImperaLve”,$Capgemini$–$MIT,$2013.$ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 10$

The'race'to'respond'means'that'some'fundamentals'are'at'risk'of'being'missed' 54% INFORMATIONAL$ 46% $ 44% TRANSACTIONAL$ $ $ $ $ $ $ SOCIAL$ $ $ $ $ $ $ $ Shopping$cart,$home$ delivery,$online$ payment,$inastore$ availability$etc.$ $ Product$catalogue,$ product$search,$store$ informaLon,$store$ locaLon$etc.$ 30% RELATIONAL$ $ Related$items,$ product$ recommendaLons,$ user$history,$website$ personalizaLon$etc.$ $ $ $ $ Reviews,$raLngs,$ social$media$ integraLon$etc.$ Increasing'complexity' Informing$customers$about$ product,$service$and$ business$offerings$ FacilitaLng$and$supporLng$ the$enLre$buying$and$ fulfillment$process$$ Building$1atoa1$ relaLonships$with$ customers,$loyalty$and$ repeat$purchases$ Engagement$with$a$wider$ customer$group$via$ integraLon$of$social$media$ plaqorms$$ Source:$“Digital$Commerce;$a$commentary$on$the$Australian$Retail$Sector”,$DT$AU$Lab,$2013.$A$Capgemini$–$ University$of$Sydney$Business$School$publicaLon.$Assessment$of$89$Australian$retailers$across$63$separate$ criteria$for$Digital$Commerce..$ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 11$

DigiraM'have'a'common'Digital'DNA,'they'invest'100%'in'the'“how”' VISION' Digital$Units$ Investment$CommiRees$ Chief$Digital$Officers$ GOVERNANCE' TransformaLve$Vision$ Shared$Vision$ IT'/'BUSINESS' CAPABILITY' Shared$understanding$between$ IT$and$business$execuLves$on$ the$role$of$IT.$ PromoLng$change,$invesLng$in$ skills,$employee$parLcipaLon.$ Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$ 2011;$“The$Digital$Advantage;$how$digital$leaders$outperform$their$peers$in$every$industry”,$Capgemini$–$MIT$ publicaLon,$2012.$ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 12$

In'addiMon,'they'make'strategic'decisions'on'where'to'dominate'in'digital' Domains'of'Excellence'(&'most'common'linkages)' CUSTOMERaFACING$ PROCESSES$ ‘Digira<’'make'strategic'decisions'on'where'to'excel' OPERATIONALa$ FACING$PROCESSES$ Social$Media$ Customer$ Experience$ Mobile$ Channel$ AnalyLcs$ Process$ DigiLzaLon$ Internal$ CollaboraLon$ Data$IntegraLon$ Sources:$Capgemini$ConsulLngaMIT$Analysis$–$Digital$TransformaLon:$A$roadmap$for$billionadollar$organizaLons$©$ Capgemini,$2012;$Capgemini$ConsulLng$–$MIT,$“The$Digital$Advantage:$How$digital$leaders$outperform$their$peers$ in$every$industry”$©$Capgemini,$2012.$*$a$charts$represent$percentage$of$companies$that$exhibit$Excellence$in$one$ or$more$of$the$six$digital$intensity$domains.$We$define$excellence$as$an$average$score$>$6$(on$a$1a7$scale)$on$all$ quesLons$of$a$given$domain,$ater$dropping$the$quesLon$with$the$lowest$score.$ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 13$

And'they'apply'pragmaMc'approaches'that'balance'customer]driven'design'with' investments'that'may'have'unclear'ROIs' OUTSIDE-IN THINKING INSIDE-OUT DESIGN Business' TradeOffs OUTSIDE-IN DESIGN Customer' Customer' Customer' Business' Technology' Technology' TradeOffs Define$customer$needs$&$ design$endatoaend$ experience$ THINK LIKE A START-UP Business' Technology' Define$business$value$and$ Design$/$adjust$/$ where$tradeaoffs$need$to$ implement$technology$to$ be$made$ support$customer$ TECHNOLOGY AS INFRASTRUCTURE Technology as infrastructure Technology as a tool *! ! value Path 2; start-up thinking approach *! *! *! *! Path 1; traditional approach ! ! •  ! •  time •  Design technology for a highly specific purpose. For example, capture timesheets. Opportunity for innovation is limited as technology has a highly specified purpose. •  •  •  Design technology to enable multiple uses. Open architecture that can be adapted by end users. For example, installing smart sensor grids, or building community platforms. Source:$“Our$Digital$Future”,$Capgemini$Australia,$2013;$Assoc.$Professor$Kai$Riemer,$University$of$Sydney$Business$School.$$ Copyright$©$2014$Capgemini.$All$rights$reserved.$ 14$

In'summary,' WE ARE IN THE 2 MACHINE AGE ND DIGITAL MATURITY MATTERS; +26% ANY COMPANY CAN BUILD A DIGITAL DNA TAKE ACTION NOW TO CREATE YOUR DIGITAL ADVANTAGE

Ben Gilchriest Digital Transformation Lead, ANZ Capgemini Consulting @BenGilchriest THIS'PRESENTATION'&'THE'MAIN'STUDIES' REFERENCED'ARE'AVAILABLE'ON'SLIDESHARE' ' SLIDESHARE.NET/BENGILCHRIEST' March,'2014'

Copyright$©$2014$Capgemini.$All$rights$reserved.$ 17$

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