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The dark side of digital transformation

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(Image credit: Shutterstock / Blackboard)

Few marketing initiatives in the past decade have come with better PR than digital transformation. It is seen as the necessary antidote to a disrupted and digitized world, but part of the reason it has escaped scrutiny is because it is a process not a task. Most companies are “transforming” rather than transformed. So, if anything goes wrong with a company’s efforts in this direction, we can blame it on an imperfect implementation rather than a flawed strategy.

We have a right to question it, however. At its best, digital transformation promises that brands can understand their customers better, support them at every step of their journeys, and make the right data-driven decisions to propel their businesses forward. In its actual implementation for many brands and retailers, however, digital transformation looks like something else: a traffic grab.

Most transformation efforts and up in a straightforward, commoditized race for customers. This happens when traditional brands and retailers have been stung by the loss of physical traffic to online giants an try to build their own digital properties to redirect their missing customers back. Once they capture them, they use that data to find new, similar prospects, and the process repeats. Not surprisingly, while personalization and marketing automation come with the promise of improving the customer experience, they typically have KPIs built around traffic generation and conversion. 

Implemented in this way, digital transformation has the unintended effect of weakening brands. Most brands and the companies behind them are not technology-led; digital is not in their DNA. In order to build their own online properties, they need outside partners to provide the tools, technologies, and expertise to get them there. Almost none of them organically build anything that reflects or grows out of their brands. Most are using readily available, off-the-shelf products and services to set up their digital stores and then deploy similar tools to analyze that data and target new customers. This even extends to the fulfilment side, where they can use one of several large players to warehouse and package up their products so that they have the same two-day shipping as everyone else. 

Have you ever noticed that the online experience of most branded websites seems familiar? You're not the only one. The result of all this outsourcing is a sea of sameness, with many brands offering nearly identical experiences, often delivered in templates that are indistinguishable from one another. 

The situation has an even darker side. Most brands embraced digital transformation because of competition from disruptive technology platforms. However, this same technology giants that created this need are also providing a good chunk of the infrastructure that brands are using to achieve it. In their search for traffic, brands and retailers are often relying on ads placed in search engines, social networks, and marketplaces like Amazon — many of which are openly competing or the same traffic and sales. Needless to say, it’s difficult to compete successfully compete with a company that is also providing the backbone of your operations.

So how can brands fight back?

Add people back in. 

Digital transformation should not merely automate and facilitate; it should connect. I don’t mean to be wishy-washy here. This is not about therapy sessions or deep conversations; it is about facilitating better shopping experiences. If you think about it, the major weakness of technology platforms is domain expertise: they can never be as knowledgeable about products and services as the people at the brands that make them. Data can do many things for you, but it can’t deliver context and human understanding of a product or service. As part of their transformation strategies, brands should be using technology to connect with people he can do exactly that. The goal here is not about making friends; it’s about driving informed purchases at the point of sale. 

Facilitate salesmanship. 

One of the biggest problems is with transformation is that it turns brands into traffic coordinators rather than storytellers. Digital advertisements provide directions and navigation, while brands outsource their stories to influencers and celebrities. Instead, we need to bring good sales techniques back into the buying process. Whether that is through chats, video conferences, or even online product demonstrations, traditional retailers have always thrived by exposing customers to people who truly know the products and can explain how to get the most out of them. 

Did you ever wonder why every online retailer has to offer free, no hassle returns? The reason is not merely convenience, it’s because people so often make the wrong choices when buying online. Physical retailers, who have salespeople available to answer questions, never had this problem at such a scale. As a result, facilitating connections with shoppers would not only likely result in higher sales, it would also help reduce churn in a massive way.

Own the future. 

Brands and retailers need to start looking beyond digital transformation. Today, they have a wide range of live options for connecting brands with potential customers, and such technologies are just in their infancy. At this point, it’s relatively easy to facilitate a video chat with a salesperson, but newer and better kinds of showrooms and immersive experiences are certain to come. These technologies will likely enable brands to break out of the straitjacket provided by current technology players, and hopefully sooner rather than later.

If digital transformation is going to bring value to brands today, it cannot do so by offering the same value to all. Commoditisation kills differentiation, and a lack of differentiation kills brands. Instead, marketers need to look for ways to distinguish their brands through technology by increasing connections, facilitating communication, and helping provide a better and more informed shopping experience. 

Of course, once you do that, you’ll likely increase conversion rates, decrease returns, and improve the bottom line. But it’s important to keep our eyes on that real prize rather than the false one that has been set before us for the last decade.

Dragorad Knezi, CEO and co-founder, eyezon

Dragorad Knezi is CEO and co-founder, eyezon, the world's first on-demand human centric social shopping platform.