Can your company remain viable in the digital age? More importantly, what are retailers and their suppliers doing to ensure that they are staying ahead of the curve in a rapidly changing environment, where a misstep or just a day off can result in being way behind the times?
McKinsey, the giant research firm, recently found that just 8% of leaders believe their companies will remain viable if digital technology continues at its current pace. Furthermore, they found that only 5% reported having met their digital transformation goals.
In mid-April, Drug Store News and Mack Elevation co-produced an experiential event: The Digital Disruption Innovation Summit, highlighting ideas shared by Walgreens, Google, Facebook, IBM Watson, Bain, Kantar, One Click Retail and L2, a division of Gartner. The goal was to offer candid discussions on today’s business challenges and the new rules for creating competitive advantage brought on by the power of digital retailing.
Speakers at the event, held in Schaumberg, Ill., were quick to note that many larger brands have stalled growth, while smaller, niche, digitally native brands are on track to outperform in most industries. Digital and brick-and-mortar have become one; the very best eliminate buying friction, which is why price is less important to their customers, many said.
What the meeting — which drew more than 200 retailers and suppliers — found is that retailers and the manufacturing community definitely have their work to do to stay ahead of the digital retailing curve. More than half of all shopping trips begin with a search on Amazon. That means that all brands must honestly look in the mirror to ensure their value proposition is right.
Yes, the stakes are high and addressing the key issues seemed to be on everyone’s agenda. For example, Kantar’s Bryan Gildenberg shared that 50% of all future sales will come from digital. Retailers cannot run from the weekly circular, but they must transform it within the customer journey. Gildenberg challenged attendees to better understand their brand’s role in the category and whether the brand, and the company, are truly relevant.
IBM’s Steve Laughlin chimed in, as well. He shared that incumbent brands still have legacy and advantage, but they must move quickly, creating customization and personalized solutions. More than 80% of millennials expect personalized offers, which are a necessity, not an opportunity.
“Are you able to grab another’s eight-second attention span?” asked Google’s Ryan Olohan. Today’s consumer expects extreme service, agility, speed, adaptability and a start-up mindset from their service providers. B-to-B relationships are still about one idea: “Can I Trust You?” Brands must be able to tell emotional stories, creating memories that inspire others to act.
Facebook’s Carlos Garcia shared that 21% of ad investment is mobile, and consumers prefer video to most other content forms. And, he said, 20% of all searches are now done by voice, with this growth expected to escalate.
Though speakers said the price game is won through such intangibles as social responsibility, design, esthetics, reputational assurance, vision, reduced anxiety, flexibility and expertise, the brand’s website is still the most persuasive influencer. One Click Retail’s Nathan Rigby stated that 90% of purchases begin with search, 80% stay on page one and 64% focused on the top three items. Interestingly, 79% of consumers would rather learn through video versus the written word.
L2’s Chad Bright added that brands that have scaled social content across digital touchpoints and retailer partners have consistently shown higher level of engagement and awareness than going it alone. Bain’s Jamie Cleghorn, meanwhile, shared the 36 elements that create value in the B-to-B world.
What the one-day event found is that the new rules require reimagining everything through a wider lens, so opportunities are not missed. And the various speakers called on attendees to embrace the excitement and ambiguity of the moment.
In the end, it is clear that now it a pretty good time to be comfortable being uncomfortable.