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What next for digital services?

Danny Hicks, who co-ordinates our Thought Leadership Programmes at Virgin Media O2, assess the impact of some of the effective uses of digital services during the pandemic, and what they tell us about considerations for continued improvement.

However disruptive the last eighteen months have proved, COVID’s impact has compelled organisations, both small and large, to deliver on their digital transformation programmes more quickly than they originally intended or planned. In fact, our recent Cebr research suggests we witnessed an average of three years of accelerated digital transformation, with some industries like health experiencing as much as five years.

Such acceleration has enabled new and disruptive business models to emerge, as well as innovation in digital services and the way they are delivered. Looking at how digital services have evolved since March 2020, an obvious question to ask is “What next?”

Distribution

I found the rise of Uber Eats and Just Eat during the pandemic fascinating. At a critical time, it enabled the final step from getting your restaurant meal to your kitchen table. Yet delivery alone was not enough – what makes restaurants willing to trust these third parties with their reputation is the levels of engagement and interaction that their apps offer. I can see when my food has left the restaurant, where my driver is on the route and what time my food will arrive. I am reminded of what I ordered last time, and when my favourite restaurants offer special deals.

There is a caveat, however. A restaurant’s rating and reputation is now partly in the hands of a third party. If your meal arrives late, incomplete or cold then you’re likely to blame the restaurant as much as the delivery service. Outsourcing to third parties, in the way restaurants do with delivery services, can affect any business. So what can brands do? I believe they need to consider how to interact more effectively with their customers, and offer them almost game-like levels of engagement. For some brands it might involve building their own app, especially as the digital engagement sphere is a noisy and busy place these days. But whether it does or not, the aim should be to have more control over the products or content that you distribute, including messaging and ultimately customer engagement opportunities.

Cloud

When Microsoft’s CEO Satya Nadella delivered the quarterly earnings report to Wall Street last year, he said that the company had seen “two years’ worth of digital transformation in two months” as organisations had accelerated adoption of cloud computing in their drive towards digital transformation.

According to Gartner, worldwide public cloud end-user spending was forecast to grow 23% in 2021, and to continue growing at pace in the years to come. Furthermore, Forbes reported earlier this year that cloud computing was driving an “evolution of business operations” which have had to adapt for the socially distanced era – with an increased demand for e-learning, robotics, chatbots, digital payments and virtual retail experiences.

This adoption of cloud computing has contributed to a reduction in the need for office space. In fact, a survey by McKinsey last year found that on average, businesses planned to reduce office space by as much as 30 percent. Wherever you stand in the ‘return to the office’ debate, we are likely to see a lot of office space being repurposed over the coming years. What should we do with it? How could you use the space in a different way, like providing spaces for community activities or customer engagement and experience centres? It’s a debate that will run for some time to come. Cloud services, however, have been shown to provide scalability to allow for business resilience and an opportunity to explore what else could be moved onto digital platforms.

Digital print services

Before 2020, I remember walking through central London during rush hour, and watching as thousands of commuters stopped at street corners and station entrances to collect a daily newspaper. With advertising accounting for 90% of turnover, the Evening Standard reported a £17m loss in July, having more than halved its revenues between April and September last year.

According to the Press Gazette, the newspaper has spent £4.3m in 2021 restructuring the now digital-first business “to create a sustainable cost base and ensure the future viability of the business”.

It’s a step a great number of newspaper and magazine publishers are taking, or have taken already – offering digital subscriptions to their readers, either direct, or through a third party digital distributor like Really, Apple News + or Kindle Unlimited. It might be premature to predict the demise of printed newspapers – I remember when people said the same about paperback books – but I am quite sure that the digital first model is well positioned to dominate. This comes from easier distribution models, coupled with the potential of video and interactive content to extend engagement levels. Digital media can deliver additional insights into content relevance and customer preferences, which in turn enable further tailoring of content, advertising and marketing –  resulting in additional revenue opportunities for publishers.

The most important engagement tool there is

There is a lesson here for every business striving to connect and engage with their customers – you need to engage with them via the single device they would never be without – arguably the most important engagement tool there is – their mobile phone. Research varies, but few studies report average mobile device usage at much less than four hours every day.

What are you doing to engage with your audience? What are you doing to break through the digital noise? I’d love to hear from you. You can connect with me via LinkedIn.



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