What does digital transformation really mean?

By: David Coombs

3rd September 2020

Change is often not a popular thing. Humans are creatures of habit – and through our daily routines and rituals we reinforce these habits as time goes on, making it harder to bend or mould them later on. More often than not it requires a radical shift in either attitude or circumstance, which doesn’t just change the habit, but rather breaks it entirely. 

An internal change of attitude can give people the motivation to break bad habits and transform their health, fitness or follow a new diet. But the most powerful change occurs when the context of our lives changes, altering our circumstance and consequently shifting our needs and routines. And there have been few drivers of behavioural change more powerful than COVID-19. 

The ongoing health crisis has altered all of our lives. Take, for example, my parents. Both have been doing their weekly shop in a local supermarket for much of their lives. It is how they shop.  If I asked them to order their weekly shop online this time last year, they would have looked at me as if I was speaking another language. Now they are swiping and tapping their way through Ocado’s app like they’ve been doing it for decades.

Cheil recently partnered with Censuswide to understand how COVID-19 was impacting businesses’ digital transformation plans. The research aimed to discover what digital transformation meant to businesses and whether their plans have accelerated since the pandemic. It looked at the areas businesses plan to invest in digitally, and which businesses have impressed the most with their digital offerings. 

Surprisingly, our survey found that more than half (56%) of UK business leaders have said they’re not planning to invest more in digital transformation – with 39% saying their plans have remained the same and 17% have even rolled back their plans – despite the health crisis slamming its foot on the accelerator of changing consumers needs and habits.

The research shone a light on an even more important point: many of us still don’t fully understand what digital transformation is. Telecoms business leaders, for example, appeared to share the same vision; focusing on moving people from offline to online. However, retail leaders lacked unity, with the majority of respondents in this sector not agreeing on what digital transformation means for their industry.

Digital transformation is about much more than moving and selling products online. It’s a fundamental shift in the habits and culture of a business, it’s embracing habit changes to create new revenue streams. 

Innovation can come in many forms. It can be delivering an engaging new online experience. It can also be using new technology to keep consumers safe in store – or a new system which allows your brand to better capture and process customer data. It’s VR, AR, 5G, contactless payments, apps that can track and trace contact and manage the flow of people and work. 

Digital transformation is a cultural mindset of a business. It’s delivering a service that meets the needs of customers. In some cases – this can mean taking one step back to go two steps forward. One of the most prominent case studies of digital transformation came through McDonalds, who over the last decade introduced efficient touch screen services which sped up customer ordering and paying – making fast food even faster. 

But now, in a post-COVID world where we’re all more conscious of touching shared surfaces – is this still an effective example? At Cheil we’re working on projects which feature ‘Untact’ technology – which uses infrared technology so consumers don’t have to touch screens physically, we are also working on voice activated retail solutions. But Digital transformation isn’t just about getting touch screens – it’s having a business culture which means your services are always going to be of maximum use and value to customers. 

Change is not always a popular thing. As we’ve seen with the health crisis however, forced change can result in longer term behaviour change.  My parents may not do all their shopping online moving forward but they will definitely be doing more than they were before. As consumer habits shift and reform at an unprecedented pace, businesses need to make sure they are following suit. This is a time to develop new routines, embrace innovation and put digital transformation at the heart of the organisation. Because digital transformation is not a single act or experience – it’s a habit.