Good digital, bad digital — why all digital transformations aren’t equal
Picture yourself at a bustling restaurant, ready to indulge in your favorite food. This time, however, there’s a twist — the menu has gone digital. A mere code scan at the table is meant to usher you into online ordering. An innovation that promises convenience, or so it seems.
Now, imagine that there’s no network to be found within the restaurant’s confines. No bars, no connectivity. No Wi-Fi either, leaving you stranded in a digital desert. So, a server duly offers you their phone, but a new twist emerges — you have to input your phone number to proceed! No number, no order. The very thing that was meant to delight the customers is driving even the admirers away.
This incident might appear trivial, but it sheds light on a critical aspect of modern consumer interactions. As brands and businesses eagerly embrace digital, one must unsparingly examine its meaningfulness to consumers. Any transformation that serves you more than your consumers is simply not worth.
Not all digital transformations are equal; not all innovations resonate with the pulse of the consumer.
In this article, we explore the dichotomy between “Good digital” and “Bad digital”, where we challenge the notion that all transitions into digital are equal and dissect the fine balance that businesses must strike in their digital pursuits.
In the domain of thermodynamics, there’s a fundamental principle known as the Second Law of Thermodynamics, often encapsulated in the phrase “entropy always increases”. This law tells us that in closed systems, disorder tends to rise over time, and energy disperses until equilibrium is reached. It’s a principle that governs the universe’s natural tendency towards chaos. Could it be that our relentless drive towards digitalization, akin to the spreading chaos in a closed system, may not always lead to a better, more efficient world?
At the heart of all digital transformations lie three irresistible promises — upgrading consumer experience, efficiency, and effectiveness. Seamless consumer experiences extend to convenience, where everything is a click or a tap away, but is also about being ‘in age’ with the life of the consumer. Efficiency becomes attainable through automation, streamlining operations, and optimizing processes. Cost reduction is often a compelling motivator to initiate the efficiency journey. And increasing effectiveness is a perennial lookout for competitive advantage.
But then, there are instances where the tangible, physical world maintains a distinct advantage over its digital counterparts. Sometimes, the enduring value of in-person experiences and interactions simply outshines what you can experience digitally. Take farmers markets, for instance. The in-person, sensory rich experience of selecting fresh produce and engaging with local growers continues to draw consumers. The tactile and personal nature of these markets provides an irreplaceable connection that transcends digital convenience. Another example to consider is that of online learning. The debate between in-person learning and online learning is seemingly intensifying as technology advances. The classroom, with its direct teacher-student interaction, immediate feedback, and dynamic discourse, fosters a depth of discourse that transcends what can be achieved through digital interfaces. While online learning offers convenience, it remains a parallel track, unable to fully replicate the richness of the in-person educational experience. As we navigate the digital age, it’s vital to recognize that while technology can augment education, the enduring value of in-person learning is rooted in its ability to shape not just knowledgeable individuals but well-rounded, socially adept, and resilient citizens of the world.
Neuromarketing, the study of how the brain responds to marketing stimuli, has unveiled fascinating revelations about the significance of tactile and olfactory experiences in shaping consumer behavior. When consumers physically interact with a product, they form a deeper connection with it. The texture of a fabric, the weight of a device, or the smoothness of a surface can evoke emotions and influence purchase decisions. This is why luxury car manufacturers meticulously craft the feel of leather on steering wheels. Tactile experiences create lasting impressions and enhance perceived product quality. The power of scent is a subtle yet a powerful force. Our sense of smell is intricately linked to memory and emotion. Fragrances can evoke nostalgia or comfort, instantly transporting consumers to specific moments of places.
And then there is multi-faceted nature of consumer context. Recognizing the emotional depth of certain occasions, such as buying a dream car or luxury furniture, “good digital” acknowledges that these moments demand an immersive, sensory rich experience. And if digital is not the platform to deliver on these moments as effectively as a real, world experience could, it best to stay out of that. “Bad digital” interferes with a perfect well accepted real-world experience, and plays spoilsport. “Bad digital treats” all interactions as transactions. “Good digital” facilitates not just the transactions but the full spectrum of emotions associated with these milestones. “Good digital” understands that life occasions often require a hybrid approach. While the experiential aspects may be celebrated in showrooms or events, seamless and efficient digital solutions can enhance the overall experience. For example, consumers may want to explore car options online, but they may also desire a physical test drive and a showroom visit.
Companies can win over consumers by finding the delicate equilibrium between the two realms — digital and physical. One way is to identify critical touchpoints, such as major life events or emotionally significant purchases. These interactions demand a physical presence. Companies should identify these moments within their consumer journey and ensure they offer immersive, sensory-rich experiences. This could involve establishing inviting showrooms, organizing special events, or providing opportunities for consumers to celebrate milestones in a tangible way. There is also something to be learnt from the success of click-and-mortar retail models, where digital and physical is well harmonized. For instance, consider offering incentives for online research and in-store visits to create symbiotic relationship between digital and physical.
Consider the economic perspective of marginal utility and diminishing returns. It needs to be recognized that while digitalization brings convenience, its value may plateau beyond a certain point. This is where “good digital” starts turning in “bad digital”. Take, for instance, the case of a multinational bank, let’s call it ABC bank, which has been aggressively digitizing its services over the years. They introduced a mobile banking app, online account management, and even a chatbot for consumer enquiries. These digital innovations initially provided significant conveniences to their consumers, allowing them to perform transactions, check balances, and access support without visiting physical branches.
However, as time went on, ABC bank continued to invest heavily in digitalization. They launched additional features like virtual reality-based financial advisory services, voice activated account management, and AI-driven loan approvals. While these advancements were impressive, customers began to feel overwhelmed by the digital desert they were thrown into. The bank’s effort to digitize every aspect of the consumer journey started to plateau in terms of improving the overall consumer experience.
The right digital strategy for ABC Bank would have been to apply the economic perspective of marginal utility. The bank should have conducted consumer surveys and analyzed usage data to analyze which digital tools and features were truly enhancing the consumer experience and which were becoming redundant. They might have found, for instance, that the initial digital innovations such as the mobile app and online account management, were the most value by their consumers, providing genuine convenience. The bank could have then redirected its focus on investing in enhancing the quality of these core digital services. For example, by improving the app’s user interface, implementing advanced security features, or expanding their online support resources.
It is imperative that companies discern between “good digital” and “bad digital” in their quest for digital transformation. The journey towards a fully digitized world must be guided by an acute understanding of consumer needs, preferences, and the nuances of human experience. While its clear that digitalization offers unparalleled convenience and efficiency, it reaches a point where its value plateaus, potentially transitioning from a boon to a burden. Striking the right balance between identifying critical touchpoints, and learning from successful business models are essential. Moreover, embracing an economic perspective that considers marginal utility and diminishing returns can steer companies away from digital excess. Business should continue to prioritize meaningful, seamless, and enriching experiences to their consumers. Don’t fall into the trap of being that restaurant that’s losing loyal consumers than winning new ones with its innovations. In the end, it’s the commitment of delivering value, that separates the “good digital” from the “bad”, ensuring that digital transformation remain a progress towards consumer values-first, more than anything else.
(All views expressed are that of the author)
