At the end of a hot and intense day on a recent business trip, I walked into a busy Chinese restaurant. Once I was seated by the maître d' and given a menu, I started going through the items on the list. Amongst many other starters and main courses, it was the “Peking duck quarter portion” with an asterisk next to that caught my eye. Well, I decided to order it and the waitress told me she would let me know in a few minutes if it is available. About three or four minutes later she came back and told me that it was, and half an hour later I had a delicious meal in front of me. I was still rather curious about the asterisk, so I asked the proprietor about it. “Oh, that,” he said, “we basically see if we have one or two more orders of the same dish and then we make the whole duck. With this arrangement we have managed to quadruple our sale of this menu item, because now we have more regular customers coming in who are very happy as they do not need to order a full portion. There have even been requests coming in from surrounding hotels for room delivery ”
The following week, before my flight home, I decided to venture out into a fine dining restaurant where I was given a tablet to browse and order from a vast digital menu, instead of a more traditional menu. Once again, my eyes caught the ‘Peking Duck’ on the menu but was rather highly priced, with a comment next to it saying that the portion ‘serves two or three’. Since I was dining alone, I had to resort to a more modestly priced and sized crispy fried duck.
Enhancing the interaction
This brings up an interesting question: Which of these experiences were truly digital? Does simply using a digital device make for a digital experience or are we looking to a more quantifiable benefit from digitalisation? While digital technologies can be seen as enablers of digital experience they do not necessarily enhance the business, unless it has been designed and deployed to do so. The Chinese restaurant was able to break and digitise its standard pipeline process to not only cater for happier customers, but also quadruple its sales and increase its profit margin.
Over the last couple of years, we have seen digital technologies being eagerly adopted across many industries. In their quest to go digital, companies have invariably started replicating their current interfaces, with their customers using digital technologies to enhance the experience for the digitally aware customer. However, the question is, to which extent it enhances the interaction and enables actual digital customer experience? Does it in some situations actually cut down customers’ choice to what has been imagined, a priori, by the designers of the digital interface? And more to the point - can one still order a martini “shaken, not stirred”?
Individuality is one of the key aspects of human behaviour. While the economy of scale does drive a uniform behaviour, with time there will always be a demand for custom solutions that meet ever-changing individual needs. This is where digitisation can bring about a dramatic transformation across the industry segments. Industries no longer need to strike a balance between economies of scale and customisation.
Let’s look at the digital transformation of the communications world. More than three decades ago, the fundamental change that enabled digitisation was the breaking up of the analogue signal (the payload of the telecommunications world) into small parts, which could be processed, transmitted and reconfigured into different ways that meet different needs. This break up of analogue signal enabled service providers to not only reduce transmission errors, but also efficiently use their limited resources. To support this, modern communication systems were created, with each generation of communication technologies increasing the slicing and dicing of services from different aspects as well the ability to dynamically put the pieces together, based on customer needs at that moment.
Creating unique experiences
Can this concept be leveraged by other industries, as well? Will clientele and business models go through a dramatic positive change with digitisation going beyond interfaces into deeper business functions where everything is digitised, across sourcing, value creation, processes, sales and so on?
Today companies like Uber, Airbnb are extremely successful. This is not because they have built a great app for people to use, but because, at a fundamental level, they have allowed car owners to offer time fragments of their vehicles, property owners to offer fragments of their property and consumers to choose something which meets their specific need. By dynamically bringing these fragments together for each specific customer’s need, the creation of a unique customer experience is enabled, catapulting a viral growth of clientele and service providers whose resources and services are deployed efficiently.
We can see some hotels near airports and in business districts where one can book on an hourly basis rather than on a daily basis. This allows for lower outgoings for the clients and higher returns for the hotel owners. Carpooling is yet another example where digitisation has reduced the cost of travel, pollution and road traffic. In the financial sector, the concept of mutual funds has enabled a large number of clients to participate in the stock market, who would have otherwise not participated due to lack of capital and expertise. In all these situations the usage of digital technologies and media did enable greater reach and ease of buying. However, digitising the core of the business triggered the actual uptake.
Apart from digitising a product or a service which customers can subscribe to or buy a slice of as per their needs and budget constraints, vertical industries can also investigate digitisation of their processes for product or service creation and maintenance. This enables them to offer customisation options that make a big difference to their customers. Companies can take this one step further by asking their customers how they would like services and products to look like, and then digitise internal processes to support their delivery.
A key takeaway is that digitisation of the core of a business can be far more effective in ushering the digital customer experience than simply leveraging digital technologies to transform the existing customer interface experience. Besides, it can also in many cases usher in new business models, with a potential to transform the industry. Once the core product or service is digitised, the supporting systems should then leverage flexibility and configurability to the fullest, providing customised services for individuals effectively and efficiently. These digitised customer offerings can, in turn, be presented to the customer using digital technologies, creating a personal and seamless experience.
Vinay Devadatta, Practice Head - Innovation & Industry Relations, Wipro (opens in new tab)
Image Credit: Free-Photos / Pixabay