4 Brands That Are Likely To Face Losses Because of Late Digital Transformation
As digital transformation continues to disrupt industries, there’s a widening gap between brands that get it and those who lag behind. Those who are already digitally mature are reaping enormous benefits in market share, growth, and sustainability while the laggards are losing ground.
Here are four companies that, for various reasons, are late to the table with their digitization efforts. As a result, they are dramatically behind their competitors and could soon face stark choices about the direction of their brands.
GE’s failure with digital transformation is no secret. In the early days of digital (2011), they were light years ahead of most brands when they put sensors in their industrial products and built their own IoT platform for managing the data that would soon start pouring in. They also launched GE Digital, which would serve to help the company leverage data in order to rule the technology space.
Sadly, these initiatives died on the vine, and in the simplified version of what went wrong, they focused too much on short-term goals rather than investing in long-term strategic initiatives that would change the company from the inside out. Digitization must start with a vision and GE had none — which meant their actions – creating GE Digital, for example – weren’t really transformative at all. Rather, they were mere empty nods to the idea of transformation.
Today, GE still struggles as a latecomer to true digital transformation. Despite early IoT initiatives in the industrial unit, that area is predicted to have cash outflows (1). Their healthcare division is suffering low growth partly because of transformation challenges in the financial supply chain.
2. Barnes & Noble
Barnes & Noble has limped along for years now, after the failure of its Nook e-reader to overtake Amazon’s Kindle. And for a brand that started early in digital by launching an online bookstore only two years after Amazon, they’ve surprisingly behind the times with digital transformation.
B&N has paid lip service to the idea digital transformation for years now, but with few analysts predicting success (2). The reason: there seems to be little to show for it. The company went eight years without a website refresh and just two years ago was still struggling to define their brand (3) — late to the table, indeed. They’re already facing losses — to the tune of $1bn, sliding sales for over a decade, and a stock price that has fallen as much as 8% (4).
With the likes of Volvo making serious headway with digital transformation, Ford lags behind, suffering a falling stock price and quality issues. The company has invested heavily in digital but, as latecomers, they’re finding that the early adopters in this sector have the upper hand.
Volvo, for instance, has hired former McDonald’s CDO to spearhead their digital transformation efforts. He’s the guy responsible for those digital kiosks now delighting customers in most McDonald’s locations. But while Volvo is focusing on customer-facing apps, connected cars, and digital touchpoints, Ford quarantined its “Ford Smart Mobility” division away from the rest of the company and subsequently watched their digital transformation campaign fail. What’s more, it’s questionable whether they’re using data to predict the market. By discontinuing production of most sedans and focusing on trucks and SUV’s, they’re taking huge gambles with future markets. The outlook for the brand is bleak (5).
Like most insurance brands, Allstate is woefully far behind on their digital transformation journey. But unlike many of their competitors, they’re now stepping up their game with major digital efforts in the insurtech space.
The problem is, these initiatives were begun just a short time ago, placing the brand in serious jeopardy, compared to their more digitally apt competitors. With their strong initiatives to transform their business with data, however, many see the company as making a comeback. However, despite heavy investment in data and analytics, they’re still rated among the 10 lowest-rated auto insurers in the nation (6).
It’s clear that, as we become more digital, there will be winners and losers in the transformative journey. Whether it’s due to misguided attempts or “head in the sand” syndrome, the risk is too great for brands who come late to digital transformation. Laggards may pay the ultimate price, just as Toys ‘R Us did: bankruptcy.
Whether leaders like it or not, the business landscape is changing at the speed of light. Failing to digitize their companies means failing to accelerate their business and, eventually, failure to capture market share and profits as the champions of transformation take over.