COVID-19 accelerated the need to undergo a digital transformation by roughly five years, and forced companies to adapt how they did business. Some navigated these changes better than others, such as Credera client Chili’s.
“We didn't have to scramble when the pandemic hit,” said Chili’s CEO Wyman Roberts, speaking to their success during the pandemic. “As a result, we set the bar in casual dining, landing the top spot in sales and traffic for three straight months according to Knapp-Track. And we're poised for continued future success.”
With the business environment moving into a more digital world, we wanted to better understand what characteristics were signals for success. We interviewed several Credera leaders for their perspectives and identified three common traits we felt were vital for companies to find success:
Interacts virtually with customers.
Centralizes and curates data.
Activates quickly and effectively on data.
1. Interacts Virtually With Customers
Purchases through ecommerce channels by new and low frequency users increased by 169% since the pandemic outbreak, and 37% of these users are expected to continue this behavior post-pandemic.
“COVID-19 decentralized the customer experience by reducing in-person touchpoints and made it more difficult to engage with the customer,” said Credera’s Chief Data Scientist Vincent Yates.
This decentralization made virtual touchpoints with customers, employees, and students essential for success and emphasized the importance of establishing new strategies to accommodate this new normal.
Credera’s Chief Digital Officer Phil Lockhart saw an uptick in Credera’s clients seeking more innovative solutions such as offering curbside pickup or direct-to-consumer (DTC) options. “Customers are seeking ways to engage without needing an in-person visit to the store,” Lockhart said.
Big box retailers who already had curbside pickup or DTC solutions in place before the pandemic had positioned themselves for unprecedented growth in their online business sectors. For instance, in the second quarter 2020, Walmart U.S. experienced a 97% growth in ecommerce sales.
Using Online Data
Enabling virtual touchpoints generates vast quantities of online data, which as Yates pointed out, “is one of the richest sources of data and feeds the virtuous cycle.” As more data is collected, the more mature an organization’s analytics can become, which encourages more customer interaction. As customer interactions increase, so does data enrichment, which further improves the organization’s analytical maturity, facilitating a better customer experience.
Credera partner, Cody Case, spoke on how this shift not only creates more data, but also reshapes how organizations approach their foot traffic. Case went on to pose the question, “Going forward, how will companies change their real estate operation’s footprint to accommodate the shift in guest traffic?”
He referenced how Chipotle tripled their digital sales in the third quarter 2020 and have now opened their first digital kitchen. This digital kitchen reimagines how restaurants approach their real estate footprint, eliminating a traditional dining room or guest-facing makeline, but instead only offering digital order pick-up and catering.
Aligning Corporate and Data Strategy
However, as Credera’s Chief Innovation Officer Jake Carter pointed out, it’s imperative that companies make these changes sooner rather than later. “As more and more companies implement solutions such as DTC or curbside pickup, it shifts away from being innovative and more the standard. It’s important that a company’s strategy shifts accordingly,” Carter said.
This sentiment was echoed further by Yates who stressed the importance of incorporating corporate strategy with data strategy. “If you are going to be a data-driven company, your data strategy must be the same as your corporate strategy,” Yates said. “If that is not true, then you are not data driven and your corporate strategy is probably misaligned because you are not taking advantage of the data within your organization.”
Enabling a data-driven culture means companies must consider how data will be collected, stored, and activated, which leads us into our next trait for success—centralized and curated data.
2. Centralizes and Curates Data
Digital touchpoints may unlock a treasure trove of insights, but if the collected data is not properly curated it becomes ineffective. Companies who do this correctly are able to make data-driven decisions and are 1.5 times more likely to report year-over-year revenue growth.
“Companies have the heightened sense that they can no longer fly by intuition, especially now due to the stakes being higher,” Carter said. Harboring a data-driven culture is becoming increasingly more important.
Effective data curation involves establishing a single source of truth through a centralized data repository, as Thomas Davenport wrote in the Harvard Business Review. It brings advantages such as improved data integrity, reduced data redundancy, readily accessible data, and increased data security. It also enables a better understanding of the customer through a single view of the customer solution that tracks customer behaviors, traits, and needs.
Unifying Customer Data
“Understanding who your customer is, what they want, and how they prefer to be interacted with was always crucial to success,” said Lockhart. “Companies who understood this positioned themselves for success even prior to the pandemic, and ultimately navigated it better than others.”
For instance, in 2019, Chewy’s CEO Sumit Singh spoke to the value and power they gained after investments into centralizing their data. “Our new data-management platform, combined with our ongoing optimizations in marketing data science is enabling us to more efficiently target existing and new customer audiences across the industry, resulting in more efficient use of our marketing spend,” Singh said.
The pandemic further emphasized the business value for improved data capture and curation as the new normal forced customer expectations to shift. Companies that were able to track and surface this data were able to pivot. In the second quarter 2020, Chewy reported a 47.4% increase in net sales and attributed this success to their ability to reach customers through their comprehensive customer view that enabled marketing data science capabilities. This ability to not just track changes, but effectively and quickly respond leads us into our next trait–quick and effective activation of data.
3. Activates Quickly and Effectively on Data
Although centralized data provides companies the ability to glean key insights, it’s predicted that through 2022, only 20% of analytic insights will drive business outcomes. This stems from an inability to activate on the findings that matter most. Credera’s Chief Technology Officer Jason Goth asserted that companies should be asking themselves if they know their best sellers, top customers, common customer channels, and if anomalies were exposed by the pandemic.
Companies that can quickly answer these questions were able to respond sooner and distinguish themselves within the market. “Speeding up the time from data ingestion to activation can be the differentiator between an industry leader and an industry laggard,” said Credera partner and Data Analytics leader, Andrew Stewart.
Companies that were able to activate on their data quicker became models for success at navigating the pandemic and positioned themselves for future success, as seen with both Chili’s and Chewy. Both had previously invested heavily into transitioning toward a digital environment and harnessing the data it provided, which allowed them to succeed through the pandemic and set the standards within their industries.
Leveraging a Data-Driven Strategy
Spotify, a global leader in music streaming, also experienced a major shift in their business environment. Spotify’s free subscription tier relies on users listening to advertisements for revenue, and when the pandemic hit, 81% of large advertisers deferred ads. This drastic reduction of advertising posed significant revenue concerns. However, they were able to quickly identify this risk and mitigate it through a pivot in their strategy by offering users original podcast content. Within one month, Spotify uploaded more than 150,000 podcasts, which contributed to a 14% increase in total revenue for the company despite the changes to their revenue model.
Minimizing the lag time between data ingestion and data activation allows companies to shift away from traditional batch analytics and into real-time and prescriptive analytics like machine learning. This enables them to make data-driven decisions to enhance their business insights and effectively activate on their data. The faster a company can make these decisions, the more opportunities they will have to pivot and position themselves for success.
Adapting for the Future
As we emerge from the pandemic, companies who are able to virtually interact with their consumers and are harnessing quick insights from their curated and centralized data will continue to outshine their competitors.
Implementing these solutions can be difficult and it’s important to ensure your company has the necessary building blocks to succeed. Credera has helped numerous clients assess their current maturity, identify strategic initiatives, and achieve their future goals through our expertise in strategy, product development, technology, and data.
If you’re starting your transformation, or just looking to enhance it, we would love to partner with you on the journey. If you’re interested in connecting, please reach out to us at email@example.com.