Every company is tackling digital transformation differently. Like artificial intelligence, digital transformation can become a catchall term that refers to a variety of things. That means businesses often have a hard time identifying whether they've even accomplished what they set out to do.
That's why it's sometimes easier to define it and its importance through examples of how it's being implemented. While not every brand views digital transformation the same way, there's bound to be a company out there that's looking to digitize its approach and processes in a way very similar to yours.
Analytics are a key component of digital transformation -- and the best way to showcase what it can do. These three examples use Adobe Analytics but Salesforce Einstein, Oracle and IMB's Watson are all competitive in this space as well. The Home Depot, Holland America Line and SmugMug all invested in their brands' digital transformation and came out the other side with lessons any leader can benefit from.
The Home Depot Doesn't See a Difference in Offline vs. Online
One stat sums up everything The Home Depot is doing. With $108 billion in sales in 2018, you could argue that the brand doesn't have to be aggressively focused on innovation.
But the company views it as both a present and future endeavor. It carries the kinds of products that lend themselves well to in-store pickup. Eight percent of its sales last year were online. Half of those customers chose to pick up in store; of those customers, 20 percent made an additional purchase. This almost reads like an old-school word problem in math class, with two trains going at different speeds.
But one result underscores the meaning of all those other numbers: The brand created an additional $1 billion in revenue just by creating the right customer experience path that led customers to buy online, pick up in store and grab something else.
The Home Depot focused on the customer journey, not on developing separate online and offline strategies. The truth is that every situation -- and every incentive -- can drive a customer to choose one over the other. These days, you'd be hard-pressed to find a consumer who solely purchases in brick-and-mortar stores or only online. People are frequently just making a choice based on convenience, cost and time.
If you're The Home Depot, you know that with the right customer journey analytics and experience platform to act on the insights, you can determine how to create that "grab something else" moment more often. And that's where the brand's focus is: The quality of the experience, the convenience of the experience and recommendations are just as important as the product itself now. That's how a brand finds a way to thrive in retail, even when it -- and the market -- is undergoing systemic changes.
You shouldn't view retail as one channel versus another. You should view it as having multiple flexible touchpoints that can be used to create the right customer journey at the right time for anyone. It's all about creating serendipity by using the data at your disposal.
Holland America Line Looks Beyond the Data to Find the Right Customer Fit
Data is the key to delivering experiences that work for customers and drive sales. But companies need to go beyond a simple readout of metrics to understand data at a deeper level. That empowers them to continually run tests to determine whether their ideas are worth pursuing.
At Holland America Line, marketing teams have conducted dozens of experiments using software, looking closely at how small changes in the customer experience affect metrics. They then decipher what the numbers actually mean for the business.
For instance, Holland America Line recently experimented with booking options on its website. The company gives people the option of booking a cruise with an immediate deposit or delaying the deposit with a "courtesy hold."
There is a natural trade-off between the two options, of course. Fewer people opt for deposited bookings because of the high upfront commitment, but they're more likely to follow through and take the cruise once they've put down cold hard cash. The courtesy-hold option entices more people to click, but it results in fewer actual sales -- people in this category tend to cancel at a higher rate.
Aaron Fossum, director, digital analytics at Holland America Line, worked with his team to find the optimal balance. "By driving more traffic to our deposited bookings, we improved retention for online bookings by 5 percent, resulting in seven-figure ROI," Fossum says. "At first glance, we may not have noticed the shift. That's one instance where a deeper look at the metrics told us something surprising and valuable about where to focus our attention."
SmugMug Used Analytics to Bring Two Communities Together
SmugMug has millions of subscribers who utilize the brand as a place to store, share and sell their digital photography; the brand hosts both amateurs and professionals. In 2018, it acquired Flickr. The task seemed simple enough: Take a recognizable name that still had millions of users, and build a sustainable future for it.
This started with trying to understand the Flickr community, including its needs and what it currently wasn't getting. It also meant asking where the community ultimately could go. It's a task that required deep analytics. SmugMug started tracking the customer journey from free to pro subscriptions and discovered new ways to bundle offerings and create advertising partnerships that fit with the community and didn't negatively impact the experience.
Through analytics, the team discovered that the best way to grow Flickr wasn't through mining it for parts, but by restoring its experience to what made it initially popular. The solution was giving it the tools to sustain its popularity and usefulness in the future.
Analytics are changing rapidly and becoming more sophisticated. They've transitioned from free Chrome browser extensions to large enterprise solutions. But the common thread throughout is the focus on the customer journey -- and I anticipate that more companies will use analytics' insights into customer behavior to drive their digital transformations.