top digital transformation trends and priorities for 2016

Proprietary and confidential. Do not distribute.

Charlene Li, Principal Analyst

@charleneliAltimeter, a Prophet Company

charlene@altimetergroup.comJanuary 26, 2016

The Digital TransformationHelping Your Company Thrive in the Digital Era

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What are the Important Trends?

With limited time and resources, what should you focus on in 2016?

What are crucial areas to focus on to drive digital transformation?

What can we safely ignore?

4 Drives Measurable Business Value

5

Technology Maturity

2005 20152010 2020

Social Cloud Mobile DataInternet

of ThingsVirtualReality

Ado

ptio

n R

ates

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Top 10 Priorities for Digital Transformation in 2016

1 Customer Experience

2 Culture & Leadership

3 Content Strategy

4 Digital Ecosystem

5 Paid Social

Watch and Prepare

6 Wearables 7 Visual Web 8 Internet of Things

9 Artificial IQ 10 Virtual Reality

Top Priorities

1. Customer Experience

Everything that you do (and don’t do) impacts the brand

Priority: Map out and use the digital customer journey

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Customer Journeys Are Not Connected to Digital Transformation

Is your organization undergoing a digital transformation?

Source: Altimeter Group Digital Transformation Study, 2014.

88%

12%

Yes

No

42%

25%

12%

12%3%

The need to do so hasn’t come up or

been made a priority

We have not officially researched the digital customer

journey but we have updated

digital touch points with new social and mobile technologies

and investments

We’ve talked about the need to do so but no one has taken the

lead yet

We are researching customer behavior now and waiting for results to inform our

digital transformation strategy

We have completely mapped out the customer journey

within the last year and have a clear understanding of new

digital touch-points

Which best describes your company’s efforts around the customer journey/experience?

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Nordstrom’s purpose: To provide a fabulous customer experience by empowering customers and the employees who serve them. 

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The Top 50 Relentlessly Relevant Brands 31

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Relentlessly Relevant brands have four key characteristics

CUSTOMER OBSESSED

DISTINCTIVELY INSPIRED

PERVASIVELY INNOVATIVE

RUTHLESSLY PRAGMATIC

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Traditional Journeys

• Personas

• Linear

• Optimization focus

• Functional

• Episodic designed

• Static

• Survey & heuristic based

Next Gen Experiences

• Behavior-based segments

• Unpredictable, shared

• Strategic focus

• Emotional

• Continuously designed

• Dynamic, real-time

• Data-based

Creating Next Generation Consumer Experiences

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Sephora’s Marries Digital and Retail Data for Customized Experiences

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An Ethical Data Strategy Becomes a Brand Issue

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This isn’t a Technology

Problem

“You’ve got to start with the customer experience and work backwards to the technology.”

- Steve Jobs

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The Customer Experience Cloud

2. Culture & Leadership

Priority: Support and amplify your brand internally

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Biggest Challenges of Digital Transformation

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Better Employee Relationships Better Customer Experiences Better Customer Relationships

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Employee Engagement Has Very Slowly Improved

US EMPLOYEE ENGAGEMENTFigures show are for February of each year

2011 2012 2013 2014 2015

28.1 30.5 30.4 31.4 32.9

52.0 50.4 50.8 50.8 50.3

19.9 19.1 18.8 17.8 16.8

Engaged Not engaged Actively disengaged

Source: GALLUP

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The Engaged Leader Framework

Listen at Scale

Share to Shape

Engage to Transform

24“I don’t have the time.”

25 #MKTNATION

“It’s not about me.”

26“It’s marketing’s job.”

27 #MKTNATION

“I don’t want to get my company in trouble.”

3. Content Strategy

Priority: A cohesive strategy that address content needs across the organization

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Do You Have a Cohesive Content Strategy?

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Content Management Team

Case Study: Nespresso• Sets governance for content production

process, guidelines for tone, visuals and messaging

• Orchestrates content across PR, customer service, local markets and commercial teams.

• Works closely with CRM and customer insights group

The Content Management Team:• Turns customer insights into relevant content.• Hosts digital/creative assets.• Sets governance for how content is used.• Establishes guidelines for consistent voice,

message and tone.• Looks for integration between paid, earned and

owned content.

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Be Clear About The Purpose of Each Type of Content

4. Digital Ecosystem Rationalization

Priority: Break social and digital silos, distribute digital throughout the organization and leadership

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Break Down Silos to Align Customer Experience Priorities

• Different KPIs lead to competing efforts• Consumer data lives in silos, each department has

partial insight• Same channels have disparate content

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Key Players in Digital Transformation

CHRO

CMO

CIO

5. Paid Social

Priority: For Marketers, take a measured approach to paid social’s place in the strategy and budget

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Three Key Issues Around Paid Social

Paid Social Ads

Social Community Management

Social Customer Care

Will brands shift resources from engaging customers through community management to paid social for

reach, and shift engagement to social customer care?

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Three Key Issues Around Paid Social

Paid Social Ads Employee Advocates

Or will the rise of employee advocacy increase reach and thus reduce social ad spend?

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Three Key Issues Around Paid Social

Paid Social Ads

Will brand teams continue to use social at the top of the sales/marketing funnel?

Or will digital advertising use paid social ads to drive e-commerce?

Brand Marketers Digital Advertising

6. Wearables

Why Wait: Primarily health/fitness use cases

Why Act: Develop content that can be consumed on these emerging platforms

43

Few Wearable Categories Will Break Out Beyond Health – Marketing Opportunities Will Be Scarce

Have a strong content strategy and capabilities to take advantage of emerging platforms

7. Visual Web

Why Wait: Technology to identify and analyze your visual brand are still nascent

Why Act: Your brand is under fire/being lauded/ignored and you don’t know

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How Is Your Visual Brand Being Used?

8. Internet of Things

Why Wait: Standards are a complete mess

Why Act: Post-purchase experiences and opportunities to build loyalty/advocacy

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Diageo piloted connects bottle to smartphone campaign for a personalized content experience

• 72% sales during pilot• Expanded program to 6 countries• 100k unique QR code downloads• supply chain efficiency/visibility

9. Artificial Intelligence Virtual Assistants

Why Wait: Still very early in development

Why Act: Build trusted relationships with recommendations/ads via AI-powered virtual assistants

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Place Voice Artificial Intelligence in the Context of The Customer Experience and Ethical Data Use

10. Virtual Reality

Why Wait: Proprietary platforms are just launching this year, standards are still emerging

Why Act: Study and develop new storytelling capabilities

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Prepare Content and Customer Experiences for VR by Exploring Storytelling

Oculus Rift, March, $599 HTC Vive Pre, March

Sony PlayStation VR, H1 ‘16

Samsun Gear VR, $99

Microsoft HoloLens, 2016 $3,000 Google Cardboard, $30

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Top 10 Priorities for Digital Transformation in 2016

1 Customer Experience

2 Culture & Leadership

3 Content Strategy

4 Digital Ecosystem

5 Paid Social

Watch and Prepare

6 Wearables 7 Visual Web 8 Internet of Things

9 Artificial IQ 10 Virtual Reality

Top Priorities

For more information please contact:

Charlene LiPrincipal Analyst

charlene@altimetergroup.com@charleneli

www.altimetergroup.comwww.charleneli.com