Innovation Agenda and Shifting CEO Priorities
Over the last few years, CEOs have been under a lot of pressure to innovate using technology. This has been driven from all sides of the business including board of directors, competitive threats, and consumer demands. For many CEOs, this has meant ambitious digital transformation and modernization projects. One primary goal connects directly to being able to better serve the growing number of consumers who prefer digital channels.
Technology is no longer just disrupting industries. It’s enabling them to become more efficient, nimble, and effective. We most closely track the impact technology is having on the ability to deliver better customer experiences (CX) by transforming the way companies can optimize new experiences, streamlining workflows, and becoming more agile in responding to highly dynamic marketplaces. Many companies would not have survived 2020, had it not been for technology facilitating the shift from in-person shopping to digital channels.
Yet innovation is not necessarily on every CEO’s agenda. Some believe that doubling down on existing strategies or simply pivoting while aiming to become better at what they do, is their best course of action. These strategies may well have helped them survive a very turbulent 2020. But there is no denying that the companies who were already innovating and transforming themselves with new technologies made exponential gains in 2020 which continue in 2021. They may have had to pivot their strategies or accelerate implementation, but the foundation of their success was already having technology in place and innovation as a priority.
How Pre-Empting the Digital Shopping Boom Paid Off for Walmart
In January 2020, Walmart unveiled Alphabot which had been in a testing phase for 12 months. This technology was designed specifically for their online business with the aim of being able to process, pack and arrange delivery of online grocery orders, much faster.
At that time groceries made up 56% of its revenues. Additional data showed that grocery sales had helped grow online sales by 41%. Investing in technology to help Walmart grow online grocery sales in an increasingly competitive market became a strategic priority. Online sales were predicted to grow by 11% in 2020. Instead Walmart’s fiscal year end in July 2020 reported growth of 97%. There’s no doubt the pandemic and subsequent shift to digital shopping played a huge part in this. All they had to do was adapt and accelerate their digital strategies. On the back of this huge success, Walmart is now looking to sell their e-commerce technology to other retailers as another revenue stream.
None of this would have been possible had Walmart not had an innovation agenda at the core of its growth strategy. They had no idea a pandemic would disrupt business as it did, any more than any other retailer, but they were perfectly positioned to be able to respond quickly to changing customer needs.
Company Priorities vs Customer Priorities
The pandemic simply accelerated what was already a shift in consumer behavior. Statistics from 2018 show that even when making the final purchase in-store, 80% of customers started the buying journey online. With mobile phones becoming an essential part of daily life and the internet providing access to any information 24/7 it has shifted power away from brands and retailers to the consumer. It’s given them choice, as well as access to significantly more information, including reviews by other customers and price comparisons with competitors.
Fifty years ago if customers walked into a shop and couldn’t find what they wanted or thought it was too pricey, finding an alternative took a great deal of time and effort. Not so today. Customers are informed and enabled and can research alternatives quickly and easily. This is why companies are finding it harder to compete on price, service or product ranges, it simply doesn’t matter to customers anymore, they can get that anywhere. But create consistently unique experiences, show customers you understand what’s important to them and make the whole buying process effortless and they’re more likely to buy now and again in the future.
If companies are looking to grow, optimizing CX has to be a core pillar of that growth strategy. Technology is what’s enabling companies across all sectors to be able to deliver better digital experiences that drive growth. If companies are still lagging on digital transformation, customers are more likely to move to competitors that are providing the digital experiences they’ve come to expect.
Can There Be Digital Transformation and Innovation Without AI?
AI is no longer an emerging technology and its applications in e-commerce and industry are vast. From managing warehousing and delivery logistics to improving and personalizing digital banking experiences, AI is proving it can deliver results faster and more effectively than manual processes.
With the pace of change accelerating and customer expectations and preferences constantly changing, there are so many variables and influencing factors to take into consideration. Plus there is so much data being generated and companies are leveraging very little of it which is causing frustration for customers.
AI can help connect the dots by sorting through data quickly to find what is relevant to customers and help companies achieve strategic objectives in the process. Take for example a customer looking to upgrade their mobile contract online. Customers expect a personalized digital experience based on their past interactions and knowledge about their current device and calling patterns.
The key to achieving that is having AI-driven optimization that learns from actual customer responses and serves up unique experiences to lead them through the buying process. The ability to identify winning ideas from hundreds of ideas and thousands of possible combinations helps to achieve a seamless customer experience that converts into revenue gains.
What makes an even greater impact is the ability to constantly add to or change experiments while they’re running, providing continuous optimization of digital experiences. This allows companies to respond to changing marketplace dynamics and customer preferences and continue to build on the improvements already made in order to achieve greater lift. Speed and scale in leveraging data from actual customers and visitors is the future of business and its innovation that’s making that possible.