Most startups were born digital, but how do mature and well-established companies apply digital transformation to their strategies and maintain their competitive advantage in the market?
As it happens, most startups were born digital, which gives them a considerable advantage over some more mature companies who haven’t got their foot in the door when it comes to digital. Therefore it is really interesting to explore how the giant well-established companies are applying the digital transformation tools to their strategies to keep their competitiveness in the market. Discover how Volkswagen, Starbucks, IKEA, Lego and Domino’s Pizza did it.
Digital Transformation Success Cases: Real World Examples
Thriving in the digital age is closely related to innovation and digital transformation strategies. While many companies are still struggling with how to channel their digital ambition, there are others whose strategies stand out and who thanks to embracing new technologies have strengthened their empire. In this post, we are going to take a look at the success cases from different industries.
German automaker Volkswagen (VW) will invest $4 billion by 2025 to reinforce its digital ecosystem. The massive investment won’t just enable Volkswagen to appeal to consumers as the auto industry undergoes a digital transformation, it will also help the firm take on competitors who are launching comparable strategies.
As a result of the investments, from 2020 onwards, five million new Volkswagen brand vehicles per year will be connected to the Internet of Things. Various mobility solutions will also be introduced to the consumers in the hope that soon they will become integrated into their daily lives. For example, a solution that enables car owners to have packages delivered to their car rather than a specific address is currently being developed, as well as a parking app with integrated billing, and real-time personalized recommendations based on location.
The company is also launching a new car-sharing service dubbed “WeShare” that will debut in Berlin probably in the second half of 2019 with 2,000 electric vehicles. As we could learn from the tweet of Jürgen Stackmann, Volkswagen’s sales and marketing director, they are currently beta testing WeShare in the streets of Berlin. With this launch, VW hopes to open itself to a new market of consumers who are not interested in car ownership. VW has stated that it expects to make around $1.1 billion in sales by 2025 from new digital services, such as the above-mentioned car-sharing, parking, and parcel delivery services.
2) Domino’s Pizza
Listening to clients feedback and embracing digital permitted Domino’s to be crowned the largest pizza company in the world and to finally pass its old rival Pizza Hut. Therefore, there is no surprise that today four-fifths of Domino’s sales come from digital channels.
To arrive where they are today, Domino’s changed the company’s entire ethos, transforming it from a fast food business into a company imbued with programming hires, digital marketers, and other tech personnel. The entire corporate structure was also revised and the focus shifted towards digital sales and advertising. It was crucial that everyone at the top, from the Board of Directors to the CEO, was on board. As a result, Domino’s is an “e-commerce company that happens to sell pizza.”
Thanks to Dom the Pizza bot, customers can now order from whatever channel they choose (Slack, Facebook Messenger, the Company’s mobile app, on Twitter with the use of emojis, Google Assistant & Alexa, Smart TVs). These practices help to make the user experience more fun and less frictionless.
Domino’s has also taken an interest in self-driving cars and delivery robots to develop an automatic delivery system.
Starbucks’ digital strategy, and its innovative use of data analytics, in particular, remain at the forefront of its growth and continue to pay off.
For example, since 2008 Starbucks has taken a much more analytical approach when it comes to placing their stores. They are now using data like population density, average incomes, and traffic patterns to identify target areas for a new store.
Starbucks also uses data to help align its menu and product lines with consumer preferences. Meanwhile, they have started testing digital menu boards, which will allow Starbucks to change the featured products to drive and increase sales strategically depending on the time of the day.
However, the company’s true competitive advantage is its trove of exclusive customer data from Starbucks Rewards loyalty program, which with its more than 14 million users will be the key to their continued success.
Swedish furniture giant is also taking steps to stay relevant and competitive in the future. By providing innovative and highly valuable experiences for both online and offline customers, IKEA has taken the first steps on the path of transforming into a tech company.
In 2017, the IKEA Place app, an augmented reality tool that allows users to visualize how furniture will look in their own home, was launched. This helps the customers to try out different options beforehand and decide on what to purchase. This app has been downloaded 2 million times and been widely used.
Ikea has also entered the smart home market and is offering speakers and smart plugs. The development of this kind of products, services, and strategies will allow IKEA to compete better in the future.
Other technology-driven campaigns (such as its virtual reality experiment) and its recent sustainability-focused content series have contributed to its status as a digitally-innovative brand.
Through movies, mobile applications and mobile games, LEGO has managed to appeal to today’s digitally savvy consumer groups. An updated digital strategy helped the company to escape the brink of bankruptcy and to start to thrive.
By now, it has achieved many content marketing triumphs that most other brands would kill for and a social strategy that puts the majority of its focus on community engagement.
LEGO’s online community allows fans to submit their own ideas for new sets and vote on the suggestions that they like the most. If a project gets 10,000 votes, LEGO reviews the idea, picks a winner, and creates a new LEGO set that is sold worldwide. This means that LEGO has recognized that its customers are its greatest source for new ideas and innovations. This approach has helped the company to keep releasing new product ranges that its fans love and helped to maintain a close relationship with its customers around the world.
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