Digital Transformation: Creation of a New World Order


Blog 1024x729 Digital Transformation: Creation of a New World Order

Today we are witnessing an increasing shift across the world where people are transitioning into a digital economy from the internet economy. The digital economy is driven by consumers who are more empowered than ever before thanks to the high penetration of devices and networks amongst themselves. Consumers have access to multiple options and their decisions today are influenced by their networked peers. Enterprises too have a plethora of opportunities to mine into this vast digital economy to learn more about consumer behaviour and target them with better options and improve bottom line profits. It is to be noted that such a large digitally connected ecosystem did not exist 5 years ago when most of business decisions were driven by human thoughts which though intelligent often fail to consider all parameters of market conditions and technology driven business models were in their inception stage. However times have changed and successful business models have emerged after evolving tremendously from their initial days of digital infancy.

Today’s digitally powered businesses rely on insights that are derived by deep rooted analysis of consumer behaviour, brand sentiment propagation and consumer engagement. Organizations that fail to embrace digital will find their progress stalling and in a matter of years, they would face similar situations faced by companies like Kodak when they failed to move with time.

If we have a closer look at how global players are achieving success with Digital Transformation, it is easy to identify the core pillars of their efforts to bring about this transition. They are

  • Mobility
  • Big Data
  • Cloud Computing
  • Social Media
  • Automation and Artificial Intelligence

Let us have a brief look into each one.


Today mobile devices outnumber computers and have basically transformed the way which brands interact with internet enabled consumers. The race today is to make information available on the internet as mobile friendly as possible so that it becomes easier for consumers to gain access to it anywhere at any time. Even search engines like Google have started to rank pages with mobile friendly content on the higher side because they know the future of internet is going to be driven by mobile and that future has already begun. Everything from online commerce to marketing to workforce management has now become mobile-centric and investments are pouring in fast in this direction.

Big Data

Ever since the internet and networked information access swept across geographies, the amount of digital data that is created daily has resulted in the rise of Big Data technology. Organizations are facing increasing challenges to identify relevant business information from the hundreds of thousands of data silos generated by their technology infrastructure spread across geographies. With big data technology frameworks, it is possible to break this unstructured information silos into valuable business insights. It requires a good deal of analytics and computations for which reliable technology platforms are readily available today.

Social Media

Social Media has made the world a smaller place as far as communication is concerned. It is easier for brand sentiments to take a giant leap or fall into a deep gorge depending on their ability to engage fans and consumers on social media. Analysing sentiments requires identifying and responding to both positive and negative comments, pushing out relevant content to constantly engage readers and much more. It also calls for increased security policies because more and more internet enabled services depend on utilizing social media credentials to create and verify user accounts.

Cloud Computing

Often considered as the fundamental infrastructure of a Digital Economy, cloud computing allows organizations big or small to easily offer digital services without having to worry about computing power or digital asset storage capabilities. It has essentially narrowed the gap between behemoths and newbies when it comes to offering a reliable and glitch free digital service and on a close observation, you can see that nearly all disruptors in the digital world are utilizing cloud computing infrastructure for their IT needs rather than investing in building  their own IT infrastructure in-house.

Automation and Artificial Intelligence

Automation coupled with Artificial Intelligence is seen as the future of workforce enablement. It doesn’t mean humans are less important, but technology enabled solutions can assist people to do their jobs faster and better with less scope for erroneous decisions. Workloads can be easily managed and with the evolution of artificial intelligence, it is easier to mimic human reactions for scenarios and thus create 24X7 working environments that are self-sustained.

Digital Transformation is an inevitable part of today’s business world and we wanted to help our customers embrace this huge transformation in the best way possible. We were one of the pioneers in online commerce solutions and our expertise positions us to be the forerunners in enabling digital ecosystems for our clients. MCFADYEN DIGITAL is committed to deliver end-to-end digital transformation services to our clients that will help them transform into leaders of the Digital Economy.

I’ll never forget the joy and relief the first time I did all my holiday shopping online. No lines at the mall, no parking, no lugging boxes to and from the car. It took all the stress – and friction – out of the shopping process.

As the e-commerce industry has matured, innovation has focused on eliminating friction points for busy, stressed customers:

  • One-Click Shopping reduces the number of steps to put something in your shopping cart and check out
  • Same Day and Next Day Delivery satisfies immediate needs and saves time from running to the store or mall
  • Improved product search makes it easier to find items in a large ecommerce catalog and get just what you need (or want)
  • Improved site performance so online shoppers don’t waste time or deal with poor page performance
  • Mobile friendly sites engage shoppers on the go and to satisfy their micro-moment needs (which are typically driven by mobile interactions)

The net result is that e-commerce now totals $340 billion in spending and counts for more than 10% of total retail sales.

This is great for shoppers. For back-end business users? Not so much…

This innovation has been great for shoppers and consumers, but has also created a vegetable soup of technologies for business’s to manage – CMS, PIM, ERP, OMS, VM, AVS, POS and more!

It also means businesses have had to invest in staff and resources to become “technology shops” rather than focusing on their product category core competency or customer segment they serve. This technology fueled innovation has also come at a high cost thanks to traditional on-premise software with hefty licensing and implementation costs (not to mention hosting and ongoing support).

That’s why the cloud is the next revolution – to reduce friction on the backend

Over the past few years we have seen solutions come to market with platforms designed for smaller online retailers. But recently we have also seen the industry’s largest players “go all in” on cloud – including Oracle’s 2015 launch of the Oracle Commerce Cloud and Salesforce’s recent acquisition of Demandware.

Cloud based e-commerce is going upmarket and is about to become the most disruptive force since the first virtual shopping cart came online.

One of the key factors driving this transition is that the market has matured and the processes and software that enable companies to get online quickly and generate revenue have become standard best practices.  This has enabled e-commerce software providers to take proven models and processes and leverage economies of scale to build solutions that help online retailers get to market quickly without the traditional headaches.

Some benefits of this new paradigm include:

  • Faster time to market thanks to a proven, scalable implementation processes
  • Common functionality and skill sets across platforms that enable rapid business user adoption
  • Standardized technology reduces the need for complex integrations or customizations
  • Configurations instead of coding make implementations faster and less dependent on technical resources
  • Robust functionality delivers traditional enterprise level features to a broader customer base

All of this means reduced friction for businesses that need to reinvigorate their e-commerce programs and compete in an ever increasing busy marketplace.

Reduced friction means a new focus on experience instead of tools

In the long run, this cloud driven e-commerce revolution is going to go full circle and come back to the customer by reducing friction for them too. In a future where back-end users and business managers have access to flexible, scalable e-commerce technology, it means they can return to their core focus and brand value promise – their customers.

It’s a premise that once the tools are easy to implement and use, you can focus on your core purpose and differentiating your products and content in the market rather than trying to figure out how to use the technology.

An e-commerce revolution is coming. While technology is the driver, it will change how online retailers run their e-commerce businesses and will drive new skill sets. Early adopters will ramp up quickly to compete with established market players.

And thanks to this revolution that will reduce back-end friction, we will see continued growth throughout the entire e-commerce marketplace.

This week is the 2016 Internet Retailer Conference and Expo (IRCE) in Chicago – probably the most important gathering of the retail and e-commerce industry. This year’s conference convenes in the midst of disruptive changes that are transforming how companies and brands reach customers and conduct their e-commerce business.  Let’s take a look at just a few of the biggest industry shifts:

But those are just on the platform and software side.  What about on the consumer side? What trends are most important for us to pay attention to?

It is timely that the Code Conference was last week and Mary Meeker of Kleiner Perkins Caufield & Byers presented her annual Internet Trends Report.  While each year’s report is always full of important nuggets for internet marketers to remember, this year’s report highlights trends that are especially important for internet retailers and and e-commerce marketers to consider.

Global Economic Growth is Slowing

Yes, this isn’t specifically an internet trend but it shapes the internet and online commerce.

Globally, we are seeing lower than average GDP and growth is starting to slow in some of the largest economies including China. We are also seeing a decline in commodity prices and interest rates, which all indicate the global outlook on the market potential.  We are also seeing other trends that shape the economy including increased debt and the lack of population growth in some key markets.

However, there is a bright spot and opportunity in this shift.

As Oracle CEO Mark Hurd has repeatedly pointed out, when revenue growth stalls the only way for earnings to grow is through cost cutting. And although IT spending has been declining worldwide, the push is on to move resources to the cloud so IT can focus and grow the core business rather than spending time and resources on running old infrastructure.

Against this backdrop Mary Meeker points out that the days of easy corporate growth are behind us. But this is where nimble, disruptive internet companies can make their mark and transform their businesses and industries.

We are in the Midst of a Generational Shift

You’ve heard it before but just in case… “The Millennials are coming!!!”

Mary Meeker points out that millennials now count for 27% of the population in the United States and are reshaping everything they touch. Thanks to this generation, everything is being transformed from the ways companies go to market (more on that later) to media consumption (have you tried Facebook Live or watched a Snapchat video) to how they communicate directly (the phone is dead… long live messaging. Check out slides 97 through 107 of her presentation for more details).

And don’t forget – Millennials’ spending power is only going to grow as they evolve in their careers and have more disposable income.

These shifts are driving how Millennials (and the rest of us) consume media and our expectations for the brands and companies we buy products and services from.

Brands and Commerce Are Rapidly Morphing in this New Mixed up World.

Mary says it best in her presentation:

Products become brands, brands become retailers, and retailers are becoming products and brands.

Need proof? Look at some of the hottest e-commerce brands out there:

  • Casper found a new way to build a different type of mattress and have built a unique brand promise along with a great product. Products become brands.
  • Warby Parker started with the promise of affordable, fashionable eyewear. Now they are opening their own stores in addition to samples they ship to your home to try on. Brands become retailers.
  • Amazon is rolling out their own private label products for everything from diapers to groceries. Retailers become products.

Of course this trend is going even one step further as retailers are also now coming into the home with new “brand services” such as Stitch Fix and Trunk Club.

The foundation of this shift is data that these companies and brands have about their customers.  For example, if you stop and realize that Stitch Fix is really the “Netflix of clothes,” you can quickly understand how customer data drives sales. So much that their CEO reports that 100% of their sales are driven by recommendations.

So what is one to take away from all of this and think about as we start IRCE 2016?

Start by looking for efficiency. If global growth is declining, marketers and retailers need to look for ways to maximize your IT investment and realize cost savings through technology and services that allow you to focus on your core competency and leverage partners’ expertise and economies of scale.

Consider what modern engagement means and select platforms that will grow to meet those new challenges. Your next customers are engaging in ways you never thought of. As you consider new business tools, look for platforms that will grow with market changes and offer new, innovative solutions to engage customers wherever they are.

Don’t be afraid to rethink business models and implement technology that helps you do that. As competition shifts around you, you are bound to ask questions about your business model and how you deliver. Are you a brand to product? Or a product to brand? Or something else? The key will be technology and partners that understand those shifts and help you navigate the waters.

It’s sure to be an exciting week as we consider these trends and we reconnect with partners, clients and colleagues for invigorating discussion.  Because in a world where change is constant, you can see how the timing of IRCE is the perfect opportunity to address these trends and chart a path forward.

What do you think? Do you have a different opinion? Be sure to visit McFadyen Solutions at booth 1707 in the Expo Hall at the 2016 Internet Retailer Conference and Expo to share your thoughts.

For more of Mary Meeker’s presentation, be sure to check out her original slides and the video of her presentation.

View the original Slides: 2016 Internet Trends – Mary Meeker, KPCB

Video: ‪Internet trends report; Mary Meeker, KPCB; Code Conference 2016

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