The rush into the digital sphere is challenging the ability of companies to build and sustain successful brands. Digitalization now permeates every aspect of a business. It turns out to be an extremely disruptive force because it accelerates operational processes and innovation, it transforms the customer experience and it forces the corporate world to align their strategies with an incessantly changing business environment. If you want to create a prolific customer engagement in the digital world, you need a new corporate culture, more speed and an interactive communication that not only makes you part of the online conversation but also allows you to detect changes in customer habits, purchasing decisions and evolving new tastes in real-time. The biggest challenge, though, will be training your employees for this new era.
Acceleration and Disruption
Technology has invaded all aspects of our private lives and the corporate world. It has constantly increased the speed at which it is changing our way of life and the way we do business. According to ABB, a pioneering technology leader that works closely with utility, industry, transportation and infrastructure customers to write the future of industrial digitalization, by 2020 there will be “one million new devices online per hour.” A presentation by the company outlines that companies need to think in totally new ways. Leapfrogging is the new master game and disruptions define the new now: a taxi company like Uber owns no taxi, an accomodation provider like Airbnb owns no real estate and a retailer like Alibaba has no inventory. In the digital economy established companies need to leverage their full potential because newcomers challenge established giants more frequently. Fascination will drive value, and everything accelerates. It took the telephone 75 years to reach 50 million users. Television needed only 13 years to reach this dissemination. And Facebook achieved it after just 3.5 years.
Processing power and connectivity have not only allowed the speed of change to increase, they have created unprecedented amounts of information and are causing an inflation of technology-enabled business models. Nowhere is this more visible and dramatic than in the emerging world, where telecommunication has leapfrogged the fixed-line era to go directly to mobile. In the late 1990s, just three percent of the world’s population was using a mobile phone. Now, two out of three people on this planet have one. And two thirds of humanity are connected in some way to the internet.
An astonishing 44 percent of global executives surveyed by the Harvard Business Review´s Analytic Services are expecting a significant disruption of their industries within 3 years. This furious pace of change forces corporate leaders to adjust or completely rewrite their strategies more often than ever before. If you don´t keep up with the latest developments, your brand might quickly be out of the market. This is why even traditionally cautious industries like luxury watches are trying to lose no more time going online and joining the e-commerce bandwagon. When Omega launched its “Speedy Tuesday” model in January – its first watch sold directly online – the whole batch of 2,012 pieces was sold out in slightly more than four hours.
The Bumble Bee Economy
Technology is changing consumers and their daily routines in a fundamental way. Consumers are flooded with news and information and confronted with ever more choices. They are better and faster informed than at any time in history. Mobile devices have become the most important tools they use to navigate, communicate and buy things. You purchase a product, you order a specific service, rent a holiday home, or share a car? There is almost nothing left, that can´t be done online. This has created what insiders call the “Bumble Bee Economy.” It is driven by empowered consumers who are more connected and proactive than they have ever been.
This new digital economy is replacing traditional market places with online platforms. It offers faster connections and larger personal networks. And it fundamentally changes how people interact with friends and brands, get advice, examine their choices and research product quality. Media consumption is quickly realigned with the internet. This transformation towards the Bumble Bee Economy has changed perceptions to an extent where things don´t seem to happen if they are not visible on the internet. But in the face of all this rapid transformation companies seem slow to adapt. “Today a lot of companies are going through radical digital transformation in an effort to better engage with their customers, but as yet too few companies are doing it right”, says Giulia Miglio, Junior Consultant at globeone in Zurich.
Brand Building on Steroids
The good news is that in the digital era brands will be as central and essential for your business as ever. But there will be a major difference in what it takes to build a brand and make it stay relevant. First of all, marketers will enter an age in which rules will be rewritten much faster than before. Second, the landscape for marketing and media will be much more fragmented. In 2014, according to the Harvard Business Review, there were more than 1,000 companies selling marketing technologies. Three years prior to that there were only 150. Now, there are 20 times as many. Not a long time ago, paying for brand building was a limited exercise. Spending was simply allocated to advertising and media. In the Bumble-Bee economy it will be hard to afford to pay for brand building, at least in a traditional sense.
Companies need to find new ways of engagement with consumers in order to stay relevant. Tesla is a great example. The electric car manufacturer is building a strong brand in a very unconventional way. The company is able to convince 500,000 consumers to pay for a car that has not even been produced, hasn´t arrived in any showroom and can’t be test-driven. Still, more and more consumers are willing to invest in such a car. Tesla has showcased to us the power of building a brand and of connecting brand strategy with the business strategy. Tesla’s customers don´t just buy a product, they buy the whole company, its vision and everything that its co-founder and CEO Elon Musk and the company stand for.
In the digital era there will be even more brands to choose from. So whoever wants to stay in the business needs to become part of what some experts call the “Inner Sanctum” of a consumer´s brands. It´s a selection of brands consumers consider to be part of their lives because they connect with them constantly and identify themselves with. In the digital age branding will not be about the color or the design, or the name of your logo. The brand will be the face of your business strategy. For your brand to stay relevant, it needs to be managed very effectively. That means to find new ways of increasing, nurturing and measuring social relevance, both in traditional as well (and even more importantly) as in digital media channels and platforms. A brand´s most crucial strength will be its “social currency.” Consulting company Vivaldi Partners defined this term as the extent to which people share the brand or information about the brand as part of their everyday social lives, be it at work or at home.
This customer experience needs to be the key goal of the digital transformation. Without a consistent and positive experience through such a “passion brand” that aligns with their values and needs customers will simply turn away and disappear. In order to stay engaged with them, new technology and brand improvements need to be ascertained, assessed, tested and implemented in a real-time manner. “Understanding these behaviors and necessities will represent a crucial lever for the success of any business transformation effort. Developing brands that engage with customers, are agile, purpose-driven, created with a digital-first thinking and aligned with the overall business strategy is the new master game. That is where the music is playing”, underlines Carina Hauswald, Managing Director at globeone in Zurich.