Digital sameness

In this competitive market with increasingly digital-savvy customers, it has become challenging to stay relevant in one’s industry and market. Gone are the days when the question was whether or not to be digital. Now, the game is moving from simply having a digital presence to creating differentiated service offerings that stand out in the market — or risk becoming just another digital player.

Uber revolutionized the cab industry with a technology platform that connects cars and commuters, with less staff managing the operations. While it enjoyed an early advantage by beating taxi services at the game, it has been now caught by competitors. Customers now have several alternatives that have invested heavily in digital technologies to offer a similar customer experience. As a customer, I now choose the service based on cost and how quickly the cab arrives at my location. This means your competitors can catch up with you quickly by providing similar experiences, including the look and feel of the apps. The question for Uber — which disrupted the market to become a digital leader — is how to stay relevant and continue to enjoy its market-leading position?

In the online travel industry, the dynamics are similar. Sites like Booking.com or MakeMyTrip have no true differentiation today. They all offer discounts on package tours, hotels and flights. They all have AI-driven dynamic pricing and third-party API integrations to provide a one-stop solution for travelers. As a consumer, this dynamic pricing is becoming a bit of nuisance because the algorithm works purely on the artificial demand created by the number of requests at that moment. At times, I have been just about to book a flight when the Ajax call dynamically increased the price and sent me a beautiful apology message. I just closed the browser without buying. Today, it’s difficult to choose one travel site over another. Since I get basically the same pricing but none of the customer service or extra assistance, I would rather use them as portal to aggregate pricing data, then book flights directly from an airline.

The story of digital sameness is no different in e-Commerce, mobile wallets, and other industries. The big question is how do we deliver the differentiation that brings a competitive advantage? The relentless pace of change — whether driven by digital-savvy consumers or technology advancement — is allowing companies to run the business using new models. The direct-to-consumer model helps companies own and manage their customer data and experience. To scale the business, companies can leverage retailers or marketplaces with preferred partnerships — allowing them to continue to innovate creatively without relinquishing control.

Gone are the days when the question was whether or not to be digital. Now, the game is moving from simply having a digital presence to creating differentiated service offerings that stand out in the market — or risk becoming just another digital player.

Differentiated digital companies

Millennials and Gen Z believe in enjoying experiences rather than owning a service or product, which may be attributable to their relatively lower purchasing power as compared to older generations. They want to participate in the process and enjoy those moments. It’s just not about buying a bottle of wine, but taking a vineyard tour, getting involved in winemaking, or simply be the gratification of gifting wine to someone special or supporting environmentally conscious wineries. It requires creative, rich content and human interactions to create the bond and trust to create the sorts of unique experiences that resonate with them personally. Can we get creative about diligently involving our consumers in the process to create a unique experience that will make them choose you over your competitors?

With increased automation and digitalization, we are losing sight of the human touchpoints. For example, Uber customer service does not have a telephone number that customers can call to discuss issues related to a trip. It is all managed via the mobile app. It may have made sense to have lean staff and high levels of automation to streamline the process and bring in efficiency. However, this could become a liability when customers want a someone to hear them out, understand their hassles and emotions. Unless the humanoids (aka chatbots) or digital assistants become smart and truly humanized, it is difficult to replace human interactions. The strategy that worked yesterday may not be relevant for the future.

Another problem worth mentioning is applying factory-approach thinking to everything we do. Most IT providers and some brands seek to replicate best practices that have worked in the past. While this is true to a certain extent, it may not be effective all the time. We have seen many creative campaigns win accolades in one geography yet fail in others. What works in one context may not make sense for another, so blindly replicating best practices as-is may not be a wise decision. Instead, use best practices as guiding principles and tailor them according to the context and needs to avoid digital sameness.

Amazon is constantly striving to create differentiated consumer experiences as competitors play catch-up by investing heavily in digital technologies. However, a plethora of customer-centric services keeps Amazon scoring high on customer satisfaction. In India, Reliance Jio is poised to disrupt the internet and cable market by offering both services at half the price. The box is also equipped to manage IoT devices at home, enabling easy e-Commerce transactions in the future. This is difficult for its competitors to match, because they lack the enormous underlying infrastructure to support such pricing and service offerings. Unless the incumbents match the pricing and provide differentiated offerings, it becomes difficult to sustain in the business.

So, how can you stay relevant and avoid becoming just another digital brand? I have summarized a few strategies below.

  • Automating for efficiency and cost advantage is fine, but continue to focus on human touchpoints and interactions.
  • Any SaaS-first approach must ensure that the platform allows you to add your own plug-ins to manage and control the experience. For example, figure out how to use your solutions rather than a SaaS platform’s built-in AI or insight systems. Develop headless microservices architectures with a focus on API-first to create your own experience layer. The crux here is to own the data.
  • Focus on the employee and customer experience. Organizations must focus on customer obsession, alignment and a leadership commitment to build something that competitors cannot easily replicate.
  • Bring in elements of creativity and human empathy, not a factory approach. Don’t blindly replicate best practices without considering context.
  • It is not always about doing different things but doing the same thing differently. Think of sustainable innovations.
  • Make your value proposition very hard for a competitor to match by taking advantage of your innate strengths and the assets at your disposal.

https://go.forrester.com/blogs/marketing-strategy-creativity/

By Santosh Madyalkar, Principal consultant

Posted on May 5

 

 

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About Santosh Madyalkar
Principal consultant
Santosh is a digital transformation leader with over 20 years of experience in digital technologies and business strategy. Has works at the intersection of the client’s vision and the execution team to evangelize a digital mindset in the organization. As part of the Atos Digital Transformation Consulting

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