CXO Bytes

Digital Transformation and Constantly Changing Consumer Behaviour

digital adoption

The modern global economy depends heavily on digital technologies. Digitisation has impacted the economy down to its grassroots and enabled smaller players to go global. It encompasses a whole reimagination of business processes, functions, regulations and ethics, transforming legacy systems while also enhancing customer experience and profitability. Industrial enterprises have benefited the most from digital transformation. Digitally transformed organisations are projected to contribute to more than half of the global gross domestic product (GDP) by 2023, accounting for USD 53.3 trillion (INR 4,237 trillion).

However, enhancing customer experience requires a thorough understanding of consumer behaviour and consumers’ changing needs and wants. Changing consumer behaviour has pushed the need for digitisation, and conversely, digitisation has helped consumer behaviour evolve.

While traditional demands focused on fair pricing and quality, modern consumer demands have evolved with needs like personalised interactions, connected experiences across digital channels and proactive services. For businesses to stay relevant in the future, understanding and predicting customer behaviour accurately has become critical. It requires accumulating, processing and analysing relevant consumer data and then using the insights to make data-driven decisions. Strategies can then be formulated to help acquire more customers and drive profits. A true digital transformation can only come about when customer journeys and needs are prioritised for the development of relevant, personalised, and agile products.


Catering to the next generation of consumers

The modern-day consumer is a well-informed digital native who does not shy away from asking tough questions and demanding superior experience. In many ways, digital transformation is being driven by consumers and their evolving needs. It’s no longer the monopoly of industries and legacy systems. Today, digitally native consumers are at the forefront of this evolution, and businesses are following their lead to create a wholesome digital experience.

One example is Apple’s self-service portal that enables users to personalise their digital experience. It acts as a key element of their omnichannel, digital experience and adds value to their customer service. Apart from enhancing customers’ digital experience, it also brings greater efficiency in customer care by automating processes that do not need individual attention.

Businesses, including legacy brands, have therefore been forced to rethink their business protocols to suit millennials and other digitally native generations. They are scaling multi-media tools and adopting new strategies like influencer marketing to generate brand awareness. Such adaptations are rather essential given that the Gen Z is growing up in a digital-first environment where the internet and other advanced technologies are all-pervasive. Today, even a two-year-old is a digital consumer and companies must manoeuvre their strategies accordingly.


Building a digital culture

While consumers are indeed driving the ongoing digital transformation, the progressively evolving digital experiences are also transforming consumer habits. The more digital experiences consumers go through, the greater their expectations from future technologies.

During the COVID-19 pandemic, a decade’s worth of digital transformation was pushed forward within months. With the ensuing global lockdown, digitisation became an absolute necessity for businesses to carry on, forcing even the most loyal legacy consumers to go digital. This was extensively witnessed by the banking industry, where traditional processes had to be replaced by digital alternatives in a very short time span, and consumers (especially the older generation) who otherwise preferred traditional banking had to adapt to digitisation. Consequently, 35 per cent of customers increased their online banking usage during COVID-19. However, digital transformation doesn’t end here. It is rather a new beginning where meeting changing customer needs has emerged as one of the biggest challenges.

Meeting customer needs calls for embedding a culture of research and innovation across industries. Businesses must build and promote a culture where consumer behaviour is studied and understood well and innovative methods are adopted to meet rapidly evolving consumer requirements. It also calls for digital transformation practices that use improved data collection methods without compromising privacy and security. Businesses must let consumers know that their privacy is highly valued. Only then can they provide a truly seamless and intuitive experience to the customers.

The future of digital technologies looks more democratised than ever. Businesses must be transparent to remain relevant in the coming times. They must develop a regulatory framework that safeguards sensitive consumer data and lets customers exercise control over their data. It will also build greater trust among them, thus ensuring better business in the future.


Enabling a consumer-centric digital transformation

Digital transformation is a journey that will continue for many years. COVID-19 may have pushed forth the digital transformation by a decade, but to sustain this advancement, businesses will have to live up to the new levels of expectations that consumers are getting used to.

In the future, businesses will have to focus on understanding the factors that influence customer expectation. It would also be imperative to ensure compatibility with emerging technologies and the variables influencing customer experience. Businesses would also need to exceed new customer expectation by creating superior digital experiences and focusing on customisation, innovation and data protection. To be a business of the future, agility will remain an indispensable aspect of any operation. It enables a firm to embrace the ever-evolving business landscape and satisfy customers’ changing needs and desires. The approach of adapting to market shifts, however, shouldn’t hamper the core levers of a business.

In other words, future-proofing businesses will require a more flexible, innovative and consumer-centric approach that prioritises: ‘individuals and interactions over processes and tools, working software over comprehensive documentation, customer collaboration over contract negotiation and responding to change over following a plan.’ That’s what businesses would need to be future-ready.


(The author is Mr. Prasanna Singaraju, Co-Founder and CEO at Qentelli and the views expressed in this article are his own)

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