Digital transformation is a hot topic in 2021. The Covid-19 pandemic has undoubtedly shifted the world we lived in and, as a result, technology has accelerated by ‘a decade in days’ — exceeding the predictions for the next 10 years.
We’ve seen considerable shifts in the way we live as consumers, leading to widespread technology adaptations to accommodate this. Ultimately, businesses that accepted and quickly ‘onboarded’ digital transformation practices floated to the top, while others sank.
Feefo’s CEO, Tony Wheeble, says: “It’s been an incredibly volatile 12 months for businesses, which has seen a seismic shift in consumer behaviour, some aspects of which will have a long-lasting effect on how buyers think, act and spend. That said, our research shows for those businesses that are agile and realign their marketing strategies, there are many opportunities to improve brand awareness, perception and loyalty. Those that respond and act with the medium to long term in mind will see greater returns over the next few years compared with those that see this period as nothing more than a dip, due to external circumstances.”
But, should businesses continue to focus on digital transformation? Do brands need to digitally transform after the pandemic has settled? We shall explore this below.
What is digital transformation?
While it probably sounds like digital transformation is just about improving your customers’ online experience with you — you’re only half right! Digital transformation actually affects all areas of your business. This means changing how you operate, how your employees work and how your product or service is delivered to your customers.
While the end of the pandemic is (hopefully) on the horizon, it does appear that the Covid-19-induced trends in consumer shopping habits and attitudes are here for the long-haul. Our Feefo Brand Perception Report 2021 asked UK shoppers about their attitudes to online shopping. In fact, over two-fifths (45%) of consumers said that they will continue to do the majority of brand purchases online. Only 25% of those asked said they would not. This data gives a crucial insight to the longevity of the ‘new’ consumer shopping habits.
How has Covid-19 accelerated digital?
During these recent times, not only have shopping habits and priorities changed considerably but there are now new markets to consider for online and offline brands. In the UK, (99%) of adults aged 16-44 say they are recent internet users. Interestingly, the proportion of those aged 75 years and over who are recent internet users nearly doubled in the past few years — from 29% in 2013 to 54% in 2020. Let’s take a look at how Covid has driven much of this…
Changes in how consumers live
Fundamentally, lockdowns combined with changes in working practices and people spending the proportion of their days at home has led to more time online for most consumers.
Due to shielding guidelines and extra rules for at-risk groups, customers from all generations have had to adapt to a new way of living and, subsequently, shopping. Much of this, of course, includes getting things such as medication, food and other essentials delivered to their homes. This has led to significant national changes, where huge supermarkets such as Tesco quickly shifted from 600,000 online grocery shoppers a week to 1,500,000 shoppers per week. Accordingly, retailers have had to restructure many of their operations, job roles and website to accommodate this sudden surge.
Not only that, the sharp increase in unemployment and the introduction of the furlough scheme have meant drops in income for many. Not to mention the issues that the self-employed, contractors and limited company owners have faced during this time. As a result, consumers are generally more cautious with their spending. Furthermore, there has been a sharp reduction in on-the-go consumption due to fewer people working in offices.
Doctors and ePharmacies have also seen a large uptake, with Telemedicine growing by 10x in around 2 weeks. Pharmacy2u, an online medication and delivery supplier, delivered over 20 million prescriptions in 2020 alone. Doctors’ surgeries have also drastically reduced the volume of patients flowing through their clinics, with the majority of appointments nationally now being held over the phone or by video call.
A shift in consumer priorities
The pandemic has created an undeniable shift in consumer priorities and preferences. With a somewhat renewed focus on not only health and hygiene, but on world politics and global sustainability.
Around 57% of consumers we asked said that companies should be environmentally and socially responsible, while a huge 74% said they always consider a brand’s values before purchasing from them. Other significant factors considered when buying are:
- Brands being passionate about the products or services they sell (34%)
- Sustainability ethics (33%)
- Transparency (33%)
Our brand perception survey revealed that B2C brands are more trusted than other sectors, with almost four-fifths (78%) of consumers believing brands that claim to be socially responsive. Only 4% of those asked said they never believe brands that say they’re socially responsible. This high level of consumer trust gives opportunities for businesses to move to more sustainable and socially responsible practices, in order to stand out from the competition online.
Vic Heyward, Brand Marketing and Communications Manager at Bright notes: “Understanding what your brand truly stands for should be the motivation behind your core purpose, and brand values should authentically echo this.
“This newer focus on brand accountability for sustainable initiatives can feel daunting for some, especially if you're not at the forefront of an environmental revolution. For brands like this, taking a step back to reflect on your brand purpose, code of ethics or CSR policy can be an enlightening experience and a way to further engage prospects and employees.”
Other findings from our research showed that, if disappointed by a brand’s stance, words or actions on a social or political issue, 74% of consumers would be less likely to go back to them, with 26% noting that if their favourite brand got into an ethical scandal, they would never buy from that company again. This data shows the real impact of brands truly connecting with their customers, and meeting consumer expectations on ethical, environmental, social and political stances to drive trust and brand loyalty.
Higher customer expectations
With many of the eCommerce giants leading the way during the early days of the pandemic, customer expectations have increased dramatically during the period. The customer experience has undeniably evolved, and one big example of this is the accessibility and ease of customer service.
Our brand perception survey revealed that customers, now more than ever, expect real-time contact with the brands they buy from. Not only in the purchase stage but in the research and post-purchase stages as well. Alongside this, 21% of customers said they value brands more if they offer customer service through their social media channels. Because social media is accessible to so many — with 53.6% of the world population on social media — a dedicated social team for these enquiries should be one of the pillars of digital transformation when it comes to customer service.
Commenting on our findings, Damien Fisher, Managing Director of Fishtank Agency, says:
“The digital experience is scrutinised more than ever before, and depending on the sector, various touch points require consideration.
“When selling online, everyone is time-sensitive and with cyber-crime at an all-time high, visible trust recognition indicator such as Feefo are key validators to consumer perception and loyalty. Having chatbots visible 24/7 to answer any consumer queries without moving from page to page, as well as trigger points such as email/sales numbers, helps deliver buyer confidence as it suggests the online retailer is happy to take calls and values customer satisfaction.”
Higher customer expectations also mean a sensitivity to bad practices and experiences. The volume of online competition only makes this easier, where brand loyalty is lessened by the ease of switching to competitor brands. The increase in the volume of information available from the ‘research’ stage of the buying funnel is also a key consideration here.
Our research revealed that trustworthy online reviews are the top influencer in purchasing decisions when researching where to shop for a product or service online, with 55% of consumers marking this as their first choice. With 38% of customers noting that they’re influenced by a brand’s website and digital experience. So, aside from brand’s own websites, social media channels and information, it’s critical that third-party data and insights are kept up to scratch too.
So, the combination of trust factors, the customer experience and the digital experience all work in tandem to influence purchasing decisions. Consumers are clearly still sensitive to bad practices and experiences. Our consumers surveyed showed that the biggest brand turn-offs include:
- Slow response to inquiries (29%)
- Spam email marketing (29%)
- Annoying advertising (23%)
How should a business digitally transform?
What the particulars a digital transformation should consist of depends, and varies from company to company. But some ideas might include:
Operational changes and data analytics
One of the most effective operational changes to implement is reviewing the supply chain. McKinsey research has shown that businesses that aggressively digitise their supply chain can expect to grow on average by 3.2% annually. This is the most impactful area to focus on, with the biggest potential gains.
When reviewing the supply chain, the focus should be on the increased agility, speed and reduced costs with the same high-quality outcome for your customers. By integrating multiple sources of data such as your website, inventory, customer data and planning, you can gain reliable insights into your supply chain. This will help reduce late deliveries, issues with stock and help you to better manage peaks and troughs.
Automation and, where possible, AI (artificial intelligence) are also key to successful digital transformation in the long term. The more data you can gather from all sources, the more effective your business will be in its operations.
One often overlooked form of digital transformation for businesses is employee management. One big shift in this field as a result of the pandemic is remote working for staff. When questioned by the BBC, 50 of the UK’s biggest employers said they wouldn’t be bringing staff back into the office full-time.
Whether your employees are working from home, hot-desking or doing a combination of WFH and in-office work, it’s critical to make this as seamless as possible. Think about security when working from home, access to in-house files and documents, and facilitating everyone during meetings wherever they are working from.
As well as the day-to-day management of remote staff, transforming your business successfully also means a large amount of employee buy-in. By involving your staff in decision making, keeping them informed and training them on the new ways of working, they’ll feel more comfortable with digital transformation projects. Ultimately, a project can’t be successful if your staff aren’t up-to-date with your new methods and technologies. So, keeping them in the loop is crucial for success during the roll-out phase.
Another important area is the customer experience (CX). This can vary hugely by business model, but some examples of Covid-19 adaptations include:
- Improvements or adoptions of online booking systems
- Making online sales simpler for customers, and websites easier to navigate
- The creation of click and collect services
- Contactless payments (and the subsequent increase of contactless limits)
- A shift between pick-ups and services being delivered
- A reduction in in-person services, with online delivery instead
With pandemic-induced shopping behaviours set to stay, digital transformation is critical for businesses to thrive — not only now, but in the coming years, as customer expectations, the volume of competition and the amount of information available online are only set to increase.
By truly engaging with your customer on their beliefs, providing a great customer experience at all touchpoints and meeting ever-changing customer expectations, you can consistently stand out among the competition — driving brand loyalty and revenue for the medium to long term.
Adopting digital transformation practice is, ultimately, unavoidable for businesses to succeed. While not an overnight fix, successful investment in this area of your business will lead to lower costs, improved customer satisfaction and brand loyalty.