We are nearing a digital tipping point
In 2018, the UK online business to consumer (B2C) sales accounted for nearly 20% of total expenditure, and we are now the 3rd biggest e-commerce retail market in the world. What’s more, is over 40% of those online sales now take place via mobile phones and tablets.
Online business to business (B2B) sales accounts for the same percentage of trade sales. B2B transactions are expected to increase rapidly as 80% of business buyers now expect the same kind of efficiency and speed from trade suppliers that they enjoy as consumers. And it is not just orders and payments that are taking place online. Technical drawings and specifications can be sent quickly to manufacturers around the world. Contracts and agreements can be reviewed collaboratively without the need for time-consuming meetings. Scarce expertise can be interviewed remotely, then contribute to a company without the upheaval of relocation through mobile and home-based working.
Obviously, 80% of both consumer and trade transactions are still done offline. However, as the benefits of online become more apparent, in terms of speed, convenience and cost, an increasing number of customers will gravitate towards those suppliers that offer digital services, and away from those that don’t.
In just a few years it is expected that the 10+% annual shift from off to online will increase to a tipping point where online and mobile availability become the norm. Companies that cannot, or will not, meet new digital business practices could well, as the term says, ‘fade to black’. (sources: McKinsey, Statista, CRR)
Digital Disruption is a two-edged sword
In the past ten years, a substantial number of 2-3 person digital start-ups have disrupted long-established industries and gone on to become the global leaders including retail, travel, holiday rental, local transport, and film and music distribution.
Known as ‘digital natives’ these entrepreneurs first looked at everything that digital technologies could do. Especially how to harvest and use the data that becomes available as a by-product of being digital. Then they shaped their strategies to address new customer needs or resolve customer gripes that traditional companies had ignored.
In reaction, large established corporations have begun their own digital transformation programs with the goal of competing with their nimbler, digital-only rivals. Their multi-million-pound programs tend to be large in scope and ambition but are not without severe risks. According to Forrester, corporate transformation efforts often run into disruptions of their own making, including uncommitted leadership with vague goals, no well-defined plans, lack of business process analysis & redesign, unwillingness to tackle structural silos and cultural folklore, as well as the classic human resistance reactions from a workforce who feel ‘done to’ rather than ‘doing with’.
If you would like to understand how digital transformation applies to your business, and how you can embrace this new wave of technology read about our digital transformation services here, or get in touch.
Next week is the fourth and final blog post in our Digital Transformation series. We explore how your business can take its first steps into a Digital Transformation.
Former CIO, Ross Harling, has helped numerous organisations with technology-driven business transformations. He has received numerous Business, Ethical and Environmental awards for his work in this and other fields. Since 2014 Ross has also been an Expert Evaluator for the European Commission on Business and Technology Innovations.