Guess which of the three companies has to be careful with the word fake in a digital world?
At last Disney has launched an online service (albeit limited) and Walmart has changed how it thinks about its store and customers. However, Amazon has a fake review issue that could damage its real-world credibility. Take the chart from this article and see if you are missing any key trends that could be delaying the speed and direction for your digital transformation.
Three stories from the digital transformation frontier (Walmart, Disney and Amazon) illustrate the power of digital to develop new digital DNA, so why did they leave it so long? Amazon may well be not fully understanding the trust it needs to sustain in a digital world. These are all traps we can fall into. They act as great metaphors for our own journeys trying to transform to thrive.
Story One: Walmart’s cleaning upside reveals the power of combining assets in a digital age
Walmart announced this week that they are replacing cleaners and some store stacking functions done by people for robots. The machines look big and a little warehouse like (the video looks great). This opens up the connection between physical stores, online ordering and automated fulfilment with machines working around humans to fulfil orders from the same shelves. Basically, consumers and robots will shop together. They will bring the store to the shopper versus only trying to get people to the 6,300 brick and mortar stores they have in the US.
If Walmart had just thought about shifting from a bring the shopper to the store mentality to a bring the store to the increasingly digital consumer five years ago. A small shift in language and digital transformation mindset might have added billions of dollars to their capital value. Imagine the power of digital and physical world data about each consumer now with A.I? The world of digital transformation offers Walmart a vastly bigger universe of insights than ever before and they could have been there earlier if they had just imagined it.
Story Two: Disney gets the move from a movie event towards a stream of moments (at last
At long last Disney did the obvious and launched it's own media streaming business. I posted something on LinkedIn on August 10, 2017 questioning if the Disney Death Star could re-vector itself. However, Disney’s new online service can’t be released in one big burst because a large amount of its content is still in the hands of brands like Netflix (20% of Netflix’s content is Disney based). Imagine planning a film not just as a one-off event, but as a continual stream of moments and revenue? A new way of thinking about opportunity might have got them here way earlier. Note on the DOW the day after the announcement Disney stock hit a record high. What could have happened to Disney’s market value if they had done this four years ago?
Story three: Amazon has to be more aware of the deluge of fake in a digital world
Fake product reviews and fake news are not new stories, but the focus on Amazon and fake product reviews illustrate the concerning power of fake to overpower true verified reviews. The research from the UK by Which! Illustrates that the volume of fake overwhelms the verified reviews in a huge range of categories. As much as Disney and Walmart have been far too slow to rethink their business in light of the drivers of a digitally transforming world Amazon cannot sustain its position without fundamentally reviewing how it handles the truth of reviews in its platform. We can no longer touch and feel products or get feedback from a professional in a store, so the inherent trust and sustaining it in a digital world is vital for trust because not all reviews are born equal.
These stories reveal the inherent complexity involved in digital transformation processes and five indicators every company needs to think about on their own digital frontiers
- You have to think about asset bases very differently, like the idea of bringing the store to the people or streaming moments not just as events
Assets in a digital world can be really different and applying old world ideas of consumption and economics is highly risky. 90% of digitally thriving corporations (28% of the G2000) said they revealed new ways of thinking about their assets as a key part of their new digital DNA. They were able to see patterns converging that have led to new ways of thinking about their asset bases. This was true in all 11 industries in the G2000. Disney and Walmart were slow and Amazon should not be thinking about these fake reviews as an asset for their platform.
- You can get OPEX cuts and simultaneous growth in sales in a digital world – Disney must be licking their lips now.
Digitally successful corporations get how to cut OPEX and at the same time as getting increases in revenue opportunities. 28% of all corporations get this with their use of AI and robotics. 92% of all those digitally thriving corporations (the 28%) were able to get simultaneous major shifts in OPEX, SGA and revenue growth. Digital enables unique new combinations of actions to bring together new economic formulas. Imagine how much Walmart will save in marketing and driving demand as it can sell two ways to a consumer. Imagine the new formula for Disney with low reach but long tail streaming projects? Different economic formulas thrive in a digital world. Imagine if Walmart and Disney had got this idea five years ago and how much their economic model would have grown because of it?
- Customers have portfolios of experience. Do not limit your corporation to just one of them, Walmart gets it.
Disney and Walmart did not open their thinking enough about what other experiences they could serve and service a customer. Everybody knows that customers have portfolios of experiences, but successful digitally transforming corporations were actively doing something about it. They were three times more likely to build their business models this way than their competitors locked into more incremental approaches. Imagine if Walmart and Disney had got this idea five years ago and had been building from then towards it and not just since last year?
- Amazon needs to protect the inherent trust it has to avoid new traps generated in a digital-first world.
The reality for any digital brand or one transforming to one is that the threats of the past are rarely the threats of the future. Walmart will have to think about what it means to have customers and robots cohabiting the floors with professional shoppers/shelf pickers. Disney will have to look over its direct to customer service and support model in very different ways and Amazon must pay attention to moving away from the volume of reviews mattering towards the volume of authentic and verified reviews being the true asset. Moments (every one of them) matters in a digital world in building and decaying trust for a platform.
- You have to learn to spot trends differently in a digitally converging world. All three brands could be better at it.
Disney and Walmart are incredibly successful corporations but both (one with Amazon and one with Netflix) have wasted valuable time and money chasing (too slowly) digital’s new giants. One of the reasons for this is that they have struggled to get escape velocity from the old-world ways of thinking. 72% of corporations in our research illustrated this problem about not being able to see new convergences of trends. Drop me a note and I will happily send the chapter to you and the trend spotting chart to us.
Nothing is predictable in a new digital world, but you cannot ignore convergences too easily. AI and digital transformation can and should radically transform the nature of markets. Amazon should know where and how these fake reviews are affecting its brand, Large giants like Walmart and Disney need to think far earlier about the new ways to think and act that will enable digital economy success for them. Ask yourself where you are as an organization?
