Digital investments: what to prioritise in uncertain times
Today’s brave new world is polarising companies. Some are stalling their digital investments amidst market disruption and uncertainty. Others are fast-tracking digital initiatives as Coronavirus moves even more aspects of our lives online.
Here we look at how companies can pivot to agile problem-solving and smart digital investment in a time of rapid disruption.
Innovate or die: a time for action
The mass channel shift to online was already well underway; Coronavirus has simply accelerated this change. The biggest consequence of rapid digitisation is that innovation is no longer a nice-to-have; it’s absolutely essential.
It’s encouraging to see how quickly some brands have understood this, and have identified today’s disruptive times as an opportunity to accelerate long-term growth.
Retailer Next, for example, despite anticipating Coronavirus-related losses of more than £1 billion, has spoken of the need to embrace change despite the crisis. It’s powering ahead with its investments in online systems in line with its long-term business strategy.
Other brands have been quick to demonstrate their brand values in action, helping medical workers on the frontline, and rapidly iterating new digital services and digital experiences that tackle social isolation and meet rapidly-changing needs.
Nike, for example, has made the premium part of its exercise app free (for a capped number of days), has promised continued pay for staff despite store closures, and is helping support healthcare messaging around staying indoors through its digital campaigns.
We know, in times like these, that strong brands get even stronger
A period of mass disruption doesn’t just level the playing field; it rewrites the rules of the game. You don’t have to ‘be Nike’ to establish yourself as a brand leader in this climate, but you do need the digital culture and technology to innovate at scale and pivot in line with your customers’ changing needs and perception of value.
What’s really concerning, however, is the number of businesses that are standing still at a time that calls for urgent action.
Digital investment is key to long-term success
Faced with economic uncertainty, tighter-than-ever margins, and rapidly-changing market dynamics, many major brands are freezing new hires, cutting funding for digital initiatives, and pausing digital transformation programmes.
Recent research from Econsultancy (conducted ahead of the UK Coronavirus lock-down) found that 91% of UK brands expect a rise in the use of digital products and services.
But 43% of the same respondents say planned technology or infrastructure spending is delayed or under review. Another 47% say their digital transformation or strategic initiatives are delayed or under review.
Businesses are delaying their investments in digital transformation at the very time these transformation initiatives are needed most – as digital technologies play an even bigger role in all areas of life.
Easier, more ‘normal’ times allow for less-than-perfect value propositions, digital products, and customer journeys. But in adverse times, only great digital products backed by agile operating models survive – where both can be quickly adapted in response to changing customer expectations around value and customer journeys.
Short-term survival is obviously a priority, but so is maintaining sight of your long-term goals, and learning how to survive and thrive in the medium and long term.
Even if an organisation is able to scale its supply chain, distribution operations, and order fulfilment processes, failing to go ahead with a long-needed ecommerce platform or technical architecture upgrade, for example, could make the difference between gaining (or maintaining) your competitive edge and losing it all together.
Those with the best chance of survival will be those that prioritise digital investments based on their impact against the organisation's strategic goals, rather than those who pause investments altogether (or invest in the wrong initiatives).
The winners will be those that closely monitor the needs of their customer base, ensuring their strategy is still aligned with those changing needs and market dynamics.
How to ensure return on digital investments in uncertain times
The below capture some of the key challenges facing companies right now. We’ve distilled these into core user needs and remedial next steps to help brands take positive action.
Remember that addressing a small number of issues that will have the biggest impact against your goals and user needs can deliver significant results. And with a rich array of cost-effective digital tools available to facilitate remote strategic workshops, user research, and usability testing, social isolation is no excuse for mothballing your strategic planning or crucial UX activities.
User story 1
Markets are changing and your personas may be out-of-date, so long-term success is not just about improving your digital product; it’s about continuously questioning your strategic direction.
Define the outcomes you want for you and your customers. Even where you need to pivot your proposition to stay relevant, you need a clear digital strategy. This is essential for making sure your stakeholders have a shared vision of where the organisation needs to be (and how to get there).
Going back to the drawing board may reveal that you don’t need to do drastic remodelling; you just need to refocus your efforts around a particular goal. As an example, we work with a leading supermarket that has a long-term goal of driving operational efficiencies in its online order fulfillment processes.
Revisiting its digital strategy during the Coronavirus crisis has proven this goal to be the single most important focus for digital initiatives going forward. As a result, they’ve accelerated digital upgrades to several of their order management and fulfilment systems, because the current situation is showing how much of a capacity constraint these are causing.
User story 2
A digital roadmap is key to negotiating risk and ensuring your digital initiatives deliver ROI.
It enables you to convert your business vision into a realistic action plan, aligning digital initiatives with your short- and long-term business goals, and prioritising them based on the impact they will have against those goals.
In today’s uncertain, rapidly-changing environment, rigid plans are no longer valuable. So your digital roadmap should act as a kind of GPS system for the organisation’s digital strategy, establishing a clear direction of travel, but allowing you to refine the exact route on a continuous basis using real-time customer insight.
Without this, you could prioritise digital initiatives that fail to deliver a ROI, or that have no measurable impact on the business goals.
User story 3
Customer experience was already the top brand differentiator. During a crisis, it’s more important than ever to listen to your customers and use real-time insights to evolve your digital proposition around their changing expectations.
Customer insight must still underpin everything you do. Understanding your audience’s needs, behaviours, and expectations, and how these align with your strategic goals, is still the first step you need to take in any digital initiative.
Web analytics will help identify friction points, but speaking with your customers directly will uncover improvement opportunities you’ll never gain from looking at analytics alone.
Use polls to help you continually evaluate what you customers need, how they’re feeling, and their emotional connection when engaging with your digital product.
Use a blend of quantitative and qualitative, remotely executed user research to constantly review what the customer experience should look like. Test, iterate, and act on what you find. Gather the insights that help answer the questions you have.
Use remote usability testing to see how customers are interacting with your digital product or prototype.
At Inviqa, our global client list means that we’re already well-versed in using tools like Zoom to interview and test prototypes with people around the world. We’re also using digital note-taking and whiteboarding tools (like Mural & Airtable) to engage our clients into the analysis process and help us all work together to identify trends and insights.
User story 4
Econsultancy found that 45% of the UK brands are delaying or reviewing new hires, but these brands could be negatively impacting their ability to pivot and adapt their digital proposition in line with the changing situation caused by the Coronavirus crisis.
Brands that are concerned about the cost of new hires should strongly consider buying capacity from third-party consultancies and experienced agencies to help plug gaps in the short term and move quickly. But they should be sure to work with partners that help them develop their own digital capability at the same time.
Working with high-performance teams of consultants, designers, and software engineers can help you:
- Quickly conduct remote research with your customers
- Identify and validate new opportunities for innovation
- Rapidly design, prototype, and remotely test your ideas with real users
- Quickly launch or optimise digital products and online services that delight your customers drive loyalty
- Ship high-quality software faster
- Cope with dramatic scaling demands, optimising your applications for performance
- Ensure accessibility and security are built into your digital platforms
How to pivot when customer demands change
Gathering and acting on real-time customer insight is key to getting through a period of disruption. But what if the insight you’re getting suggests that you need to fundamentally change your business model or customer journey?
The reality is that brand leaders face this challenge in ‘normal’ times too, and rising to that challenge is key to survival.
Take Inviqa client Brompton Bicycles, for example. The company had long considered itself a manufacturing business. They weren’t interested in owning the customer (that, as head of customer experience Harry Mann explains, ‘was for the bike shops selling our product’).
But user research clearly showed that customers wanted to transact online and build a direct relationship with the brand. Brompton responded by using user research and customer experience mapping to entirely remodel the end-to-end experience, repositioning itself as a lifecycle brand and establishing a successful D2C business model.
The bottom line: user research, together with rapid prototyping and testing, are crucial when you need to quickly pivot in line with changing customer needs and market dynamics.
The perils of waiting for things to ‘blow over’
The long-term effects of the COVID-19 epidemic remain to be seen. But, chances are, this period of rapid digitalisation will leave a lasting legacy as consumers form new habits and shift more areas of their lives online.
Will people want to return to their long commutes and the traditional 9-5 model of working after spending so long with their families and enjoying the flexibility of remote working?
Will customers used to the convenience of online shopping want to return to the world of physical stores? And will their preference for local shops over superstores continue?
Much of these are still unknowns, but organisations need to ask themselves what these outcomes could look like, and whether there’s a place for them in this new world. And, if not, how can they forge a new place?
What’s clear is that the brands that survive this period of disruption and find long-term success will be those that took action, rather than those who buried their heads in the sand or waited for this ‘to all blow over’.
It will be those that took decisive action to help tackle Coronavirus, those that reinvented physical experiences as virtual ones, and those who rapidly executed digital products and services to help people achieve their goals and stay connected.
Above all, the winners will be those that maintain a close view of their strategic goals and the changing needs and expectations of their customers.
About the author
Brett has 22 years’ experience in digital, IT, and retail, working for leading international brands. Brett has held roles such as Head of Online for a multi-million pound online business and Global Head of Business Systems for a £1bn+ international visitor attraction operator, sitting on operational boards for both.
At Inviqa, Brett helps clients resolve complex business challenges, develop their strategies, expand their digital propositions, and ensure a positive return on investment.