Why Digital Must Be Your Top Resolution

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Why Digital Must Be Your Top Resolution

By Mark Osborn, SAP Consumer Industries - 01/06/2017

As we kick off the new year and reflect on major trends impacting the industry, it’s impossible to deny that we’re at a critical turning point. Consumers rule our world, and capitalizing on the ever-changing needs of today’s digital consumer is key. Brands with the agility to sense and respond in the moment are the ones who will succeed.

Mark Osborn

With expectations growing and attention spans shortening, companies are learning quickly that complacency is not an option. Success in the marketplace is no longer a matter of incrementally one-upping your competitor; it requires digital capabilities to do things differently and deliver greater value to the consumer.

To differentiate and drive change, a top-down approach is critical. Achieving true digital transformation begins with a directive from the C-suite and the entire organization adjusting its frame of thought to encourage a digital-first mentality.

Setting the Bar High
In 2016, a few companies demonstrated a digital-first approach and set the bar for what we should expect this year. These are brands that have adopted innovation as a key pillar in their go-to-market strategy and consider consumer needs ahead of their own.

Under Armour is taking fitness to new heights, using technology to track wellness by managing sleep, nutrition and activity. Consumers benefit through a better understanding of their health profile and the products they’re using; Under Armour benefits with valuable data that enables it to better tailor products to the individual shopper and create new business models and revenue streams. The company is transforming from a maker of shirts and shoes designed to keep consumers cool and dry to a lifetime health and wellness partner.

Dollar Shave Club is another great example of a brand using technology to overcome odds and outpace competitors. The affordable subscription razor company was recently purchased by Unilever for more $1 billion. DSC is known for its masterful marketing and convenience, the combination of which won over consumers and stole significant market share away from larger more established brands.

That being said, Unilever purchased DSC not only to grab a substantial piece of the market, but also because it had developed significantly more robust consumer relationships than its more traditional competitors.  The incremental revenue and share Unilever gains will be beneficial, but time will show that the rich consumer relationships will be invaluable.

Unilever’s purchase is evidence that embracing digital transformation redefines traditional measures of value and is critical to future brand success, whether that’s through more traditional grassroots initiatives or an acquisition.

The Digitally Optimized Organization
Having digital capabilities at the core of the business provides a common thread tying the entire organization together. By transforming business models with a digital-first approach, companies are better equipped to innovate on the “front lines.” Beyond engaging consumers in real time, they are positioned to sense, analyze, optimize and act with flexibility and agility — which enables high-value outcomes.

A digitally optimized organization is built on four pillars: innovation, procurement, manufacturing and supply chain, and sales and marketing. If each of these pillars is appropriately addressed, the organization is better positioned to innovate and drive new, creative offerings. Here are a few considerations brands should prioritize as they work on their digital fitness:

Innovation: The digitally ready organization begins with an innovative mindset. This means that, in real time, the company is listening and responding to consumer needs. Is also is proactively engaging consumers in conversations during innovation cycles to build brand advocacy ahead of a product release. To do so with ease, companies should be leveraging technology to simplify development processes and accelerate time to market.

Procurement: The next piece of the puzzle comes in the form of ensuring that the entire supply network can be monitored in real time, with the ability to sense and assess a disruption before it occurs. Through on-demand access to information, cross-network transparency and streamlined inventory, the organization is better equipped to enable network agility and maintain and onboard global supply networks quickly and easily.

Manufacturing and Supply Chain: Organizations should be able to update and optimize demand plans through automated integration with supply-network and consumer-demand forecasts. When they have the ability to automate and optimize short- and medium-term forecasting through demand and changes in market conditions, they can consolidate orders and shipments across distribution center stores and direct-to-consumer fulfilment.

Sales and Marketing:  Finally, the digital core should make it all the way to the consumer. This means that the organization is able to provide configurable and personal offerings based on consumer needs and preferences. Additionally, the consumer experience should be seamless across channels and the information delivered should be aligned to individual preferences and presented at the moment of need.

To encourage continued growth and transformation within the marketplace, it’s critical that organizations adopt a fundamental change in mindset. Companies leading in the new digital economy are engaging every aspect of the business, not just IT.  And winning strategies are driven straight from the CEO and the executive suite.

By enabling employees with the digital foundation they need to innovate, the entire company is better positioned to compete. Which digital-first project will be at the top of your new year’s resolution list?

Mark Osborn is Vice President of Digital Strategy and Business Planning at SAP Consumer Industries.