Under The Hood

Leading Continuous Digital Transformation

Digital Transformation, Under the Hood

Digital is a Channel Game

Many traditional companies are investing in the development of digital products and services and digital channels. For many industries, going digital has meant replacing physical products such as books and DVDs with digital products and services. For other companies it has meant supporting their main products and services with digital products and services.

Will there still be room for physical products? Will digital replace the physical world? Is there room for physical channels when digital channels grow. This cannot be envisaged, because it is not the entire picture. Instead of digital replacing the physical world, consumers are surfing between all the different modes of reality:

  • Physical stores
  • Online
  • Mobile
  • Social

This list is not exhaustive as many companies also utilize for example emails and phone connections. Email is probably one of the slowest channels available for customer services, as writing one email takes 5-15 minutes; taking up a lot of time from all involved.

All these different aspects have specific roles and, rather than being discrete, they can support each other. Traditionally, retail has utilized physical stores, but after the expansion of online and mobile channels many consumers are doing their shopping online.

To understand the role of the physical world in retail, just consider if there weren’t any brick and mortar shops and Zalando opened one in Helsinki. It would be an instant hit, everyone touching and trying on the latest clothing trends.

One of the more interesting progressions has been Amazon’s move towards physical stores. Amazon has traditionally been an online company and is now moving to the market space traditionally held by 7Eleven and Walmart. Obviously Amazon sees a value in investing in physical locations.

Smart utilisation of different channels including digital channels like mobile and social is essential for success in the digital era. Consumers are great at utilising all the roles of these different channels.

Even though it is impossible to say what will happen in the future, so far, new channels for retail have kept on appearing. Facebook went live in 2004, making popular social media available for all. Google Play Store and Apple App store were introduced in 2008 allowing anyone to create their own apps and sell them easily.

Brick and mortar

Consumers go to physical stores to see and touch the product. In physical stores, consumers can try on clothes and compare options.

Online

After trying on clothing in a shop, many customers use desktops to browse through a ton of web stores for the best prices and then order the clothing online. In other cases, consumers choose the best products online and then go to the physical store to make the actual purchase.

Mobile

Tablets and smart phones have their special role as a mobile channel. Mobile is not that good in going through many product options, but there is one thing that mobile is great for. People using smart phones can make unplanned purchases made possible by their past interests or shopping history.

Social                                                                                                      

Social media is one of the channels that a company needs to consider. It can be used both for direct communication with consumers and to advertise to consumers.

 

 

 

1 Comment

  1. Incredible points. Outstanding arguments. Keep up the amazing work.

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