1. Proprietary and confidential. Do not distribute.
Charlene Li, Principal Analyst @charleneli
Altimeter, a Prophet Company charlene@altimetergroup.com
January 26, 2016
The Digital Transformation
Helping Your Company Thrive in the
Digital Era

2. 2

3. 3
What are the Important Trends?
With limited time and resources,
what should you focus on in 2016?
What are crucial areas to focus on to
drive digital transformation?
What can we safely ignore?

4. 4
Drives Measurable Business Value

5. 5
Technology Maturity
2005 20152010 2020
Social Cloud Mobile Data
Internet
of Things
Virtual
Reality
AdoptionRates

6. 6
Top 10 Priorities for Digital Transformation in 2016
1 Customer
Experience
2 Culture &
Leadership
3 Content
Strategy
4 Digital
Ecosystem
5 Paid Social
Watch and Prepare
6 Wearables 7 Visual Web 8 Internet of
Things
9 Artificial IQ 10 Virtual
Reality
Top Priorities

7. 1. Customer Experience
Everything that you do (and don’t do) impacts the brand
Priority: Map out and use the digital customer journey

8. 8
Customer Journeys Are Not
Connected to Digital Transformation
Is your organization undergoing a
digital transformation?
Source: Altimeter Group Digital Transformation Study, 2014.
88%
12%
Yes
No
42%
25%
12%
12%
3%
The need to do so
hasn’t come up or been
made a priority
We have not officially
researched the digital
customer journey but
we have updated
digital touch points
with new social and
mobile technologies
and investments
We’ve talked about the
need to do so but no one
has taken the lead yet
We are researching
customer behavior now
and waiting for results to
inform our digital
transformation strategy
We have completely mapped out
the customer journey within the
last year and have a clear
understanding of new digital
touch-points
Which best describes your company’s efforts around
the customer journey/experience?

9. 9
Nordstrom’s purpose: To provide a fabulous customer experience
by empowering customers and the employees who serve them.

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The Top 50 Relentlessly Relevant Brands
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11. Relentlessly Relevant brands have four
key characteristics
CUSTOMER
OBSESSED
DISTINCTIVELY
INSPIRED
PERVASIVELY
INNOVATIVE
RUTHLESSLY
PRAGMATIC

12. 12
Traditional Journeys
• Personas
• Linear
• Optimization focus
• Functional
• Episodic designed
• Static
• Survey & heuristic based
Next Gen Experiences
• Behavior-based segments
• Unpredictable, shared
• Strategic focus
• Emotional
• Continuously designed
• Dynamic, real-time
• Data-based
Creating Next Generation Consumer Experiences

13. 13
Sephora’s Marries Digital and Retail Data for
Customized Experiences

14. 14
An Ethical Data Strategy Becomes a Brand Issue

15. 15
This isn’t a
Technology
Problem

16. “You’ve got to start with the
customer experience and work
backwards to the technology.”
- Steve Jobs

17. 17
The Customer Experience Cloud

18. 2. Culture & Leadership
Priority: Support and amplify your brand internally

19. 19
Biggest Challenges of Digital Transformation

20. 20
Better Employee Relationships  Better Customer Experiences  Better Customer Relationships

21. 21
Employee Engagement Has Very Slowly Improved
US EMPLOYEE ENGAGEMENT
Figures show are for February of each year
28.1
30.5 30.4 31.4 32.9
52.0 50.4 50.8 50.8 50.3
19.9 19.1 18.8 17.8 16.8
2011 2012 2013 2014 2015
Engaged Not engaged Actively disengaged
Source: GALLUP

22. 22

23. 23
The Engaged Leader Framework
Listen at
Scale
Share to
Shape
Engage to
Transform

24. 24
“I don’t have the time.”

25. 25
#MKTNATION
“It’s not about me.”

26. 26
“It’s marketing’s job.”

27. 27
#MKTNATION
“I don’t want to get
my company in trouble.”

28. 3. Content Strategy
Priority: A cohesive strategy that address
content needs across the organization

29. 29
Do You Have a Cohesive Content Strategy?

30. 30
Content Management Team
Case Study: Nespresso
• Sets governance for content production
process, guidelines for tone, visuals and
messaging
• Orchestrates content across PR, customer
service, local markets and commercial teams.
• Works closely with CRM and customer
insights group
The Content Management Team:
• Turns customer insights into relevant content.
• Hosts digital/creative assets.
• Sets governance for how content is used.
• Establishes guidelines for consistent voice,
message and tone.
• Looks for integration between paid, earned
and owned content.

31. 31
Be Clear About The Purpose of Each Type of Content

33. 4. Digital Ecosystem Rationalization
Priority: Break social and digital silos,
distribute digital throughout the
organization and leadership

34. 34

35. 35
Break Down Silos to Align Customer Experience Priorities
• Different KPIs lead to competing efforts
• Consumer data lives in silos, each department has
partial insight
• Same channels have disparate content

36. 36
Key Players in Digital Transformation
CHRO
CMO
CIO

37. 5. Paid Social
Priority: For Marketers, take a measured
approach to paid social’s place in the
strategy and budget

38. 38

39. 39
Three Key Issues Around Paid Social
Paid Social Ads
Social Community
Management
Social Customer Care
Will brands shift resources from engaging customers
through community management to paid social for
reach, and shift engagement to social customer care?

40. 40
Three Key Issues Around Paid Social
Paid Social Ads Employee
Advocates
Or will the rise of employee advocacy increase reach
and thus reduce social ad spend?

41. 41
Three Key Issues Around Paid Social
Paid Social Ads
Will brand teams continue to use social at the top of the
sales/marketing funnel?
Or will digital advertising use paid social ads to drive e-commerce?
Brand Marketers Digital Advertising

42. 6. Wearables
Why Wait: Primarily health/fitness use
cases
Why Act: Develop content that can be
consumed on these emerging platforms

43. 43
Few Wearable Categories Will Break Out Beyond Health – Marketing Opportunities Will Be Scarce
Have a strong
content strategy
and capabilities to
take advantage of
emerging platforms

44. 7. Visual Web
Why Wait: Technology to identify and
analyze your visual brand are still nascent
Why Act: Your brand is under fire/being
lauded/ignored and you don’t know

45. 45
How Is Your Visual Brand Being Used?

46. 8. Internet of Things
Why Wait: Standards are a complete mess
Why Act: Post-purchase experiences and opportunities to
build loyalty/advocacy

47. 47
Diageo piloted connects bottle to smartphone
campaign for a personalized content experience
• 72%  sales during pilot
• Expanded program to 6 countries
• 100k unique QR code downloads
•  supply chain efficiency/visibility

48. 9. Artificial Intelligence Virtual Assistants
Why Wait: Still very early in development
Why Act: Build trusted relationships with
recommendations/ads via AI-powered virtual assistants

49. 49
Place Voice Artificial Intelligence in the Context of The Customer Experience and Ethical Data Use

50. 10. Virtual Reality
Why Wait: Proprietary platforms are just launching this
year, standards are still emerging
Why Act: Study and develop new storytelling capabilities

51. 51
Prepare Content and Customer Experiences for VR by Exploring Storytelling
Oculus Rift, March, $599 HTC Vive Pre, March
Sony PlayStation VR, H1 ‘16
Samsun Gear VR, $99
Microsoft HoloLens, 2016 $3,000 Google Cardboard, $30

52. 52
Top 10 Priorities for Digital Transformation in 2016
1 Customer
Experience
2 Culture &
Leadership
3 Content
Strategy
4 Digital
Ecosystem
5 Paid Social
Watch and Prepare
6 Wearables 7 Visual Web 8 Internet of
Things
9 Artificial IQ 10 Virtual
Reality
Top Priorities

53. For more information please contact:
Charlene Li
Principal Analyst
charlene@altimetergroup.com
@charleneli
www.altimetergroup.com
www.charleneli.com