How traditional businesses are undergoing digital transformation
30 Mar 2020
We order a meal, book a cab, shop for clothes, pay bills…except we don’t take our eyes off our smart phones. We could be digital natives or later adopters but we are all getting there. In India and across the globe, more people are finding it easy to work, play and transact online.
Numbers tell the story more eloquently — according to a McKinsey report, the volume of digital payments in India in 2018 touched 1.5 billion, a 75 per cent increase from 2016.
Generation Z in India will be 472 million-strong this year, according to a Bloomberg report. This generation, born in/after 2000, is the generation that will make up for 32 per cent of the global population, this year. The millennials will account for 31.5 percent of the world’s population.
Businesses that pay attention to these two groups naturally hog the biggest share of the pie. These two demographic groups are so at ease with an increasingly online world that they have taken it for granted.
What’s more, digital native companies such as Google or Amazon have given the millennials and Gen Z-ers just what they want, an enhanced customer experience anytime anywhere. They have literally rewired lifestyles, preferences and the way we engage online. So, what does this mean for traditional businesses?
Digital disruption is already underway. Take Uber. It is now a verb and that’s telling! Take Zomato, WhatsApp or Viber. They are all shaking up their respective sectors.
According to a McKinsey report, small businesses are ahead of large companies in accepting digital payments. The report shows that 78 per cent of surveyed small firms accepted digital wallets while only 49 per cent of large firms in the survey accepted the same.
Traditional businesses will have to take up a massive digital transformation to cater to the growing digital native population. When customers are used to seamless online experiences and 24×7 engagement offered by digital native firms, they expect all businesses to do the same. Traditional businesses can no longer clutch at the straws of old values or legacy systems at work.
At the heart of digital transformation is an enhanced customer experience. Traditional businesses may not be able to provide a superior CX because they don’t have the systems in place. They would need to provide an omnichannel experience — customers pick a platform/channel to interact with a business, and the brand is already there.
Going omnichannel also means providing a seamless experience across devices. Consumers are present on multiple devices, and may start an interaction on their laptop and move on to their phones, for instance. They could even be engaging with the brand before making a purchase at the physical store. A digitally transformed business providing such an experience is also rewarded with data on the customer journey and engagement.
The Zendesk Customer Experience Trends Report stresses the need for an integrated omnichannel solution on the basis of their findings. Accordingly, 40 per cent of customers prefer to use help centres before contacting support but only 20 per cent of teams actually provide self-service. This is a huge gap, and stresses the need for an omnichannel approach.
Legacy brands like ITC Foods and Tata Chemicals in India are doing just that. They are traditional companies but are now exploring customer service and engagement products to meet their customers’ expectations.
As the Zendesk Benchmark Report puts it, any brand should either become “an omnichannel company or risk getting left behind.” The study covered 45,000 organisations across 140 countries to understand why companies are going omnichannel.
Businesses have also been amply aided by policy push towards increasing digitisation as well. The government has launched initiatives such as Digital India and Start-up India aimed at a digital transformation.
In a recent report, the Reserve Bank of India announced that digital transactions in volume terms registered a growth rate of 58.8 per cent in 2018-19. According to an Indian Ministry study and McKinsey study, India is well on track to becoming a $1 trillion digital economy by 2025.
Businesses would do well to tap into a favourable environment for digital transformation in the country. Adoption of digital technologies, AI and the cloud, and empowering the workforce with technology aimed at superior CX, rethinking hierarchies and flattening of structures will go a long way.
For the customer, it is the experience that matters. Never mind who’s serving the meal. it’s the meal that counts.