Channel digitization is nothing new. Most companies have already embraced digital routes to market, such as websites and social media. So what’s changed? The key difference now is customers will increasingly connect with a business via a digital channel first. To put it another way, the days of considering digital as an “add-on” is over – welcome to a brave new world of digital-first interactions.
This channel digitization is a huge consumer trend that I see across almost all industries. And that means it’s a trend all businesses must consider. In my opinion, the best way to deal with this trend is to focus on three specific areas: apps, the omnichannel experience, and digital-only products. Let’s explore each category in turn.
No doubt about it, this is the era of apps. There are now around 7 million apps available (although I’m sure that figure has increased by the time you read this article). I’ll bet you already use a number of apps on a daily basis, whether that’s to check your bank account, chat with family, keep track of your exercise, or whatever.
Bottom line, all industries are being disrupted by apps – even traditional customer-facing industries like banking, hospitality, and retail. Apps are fast becoming the central point of contact with customers and a precious tool for acquiring customers, learning more about them, and improving their experience.
McDonald’s provides a great example of how the customer experience is migrating from the physical world to the digital one. The MyMcDonald’s app already has more than 22 million active users in the US alone (the app topped the most-downloaded lists in 2021). Using the app, customers can place an order and pick it up at a drive-thru (restaurant staff will start preparing the order when the customer gets close to the store). Or, with the "Click & Serve" feature, customers can have their food brought to their car. There are also special deals for app users and a MyMcDonald’s Rewards feature that already has 12 million participants. Digital sales for McDonald’s reached almost $8 billion in the first six months of 2021, a 70 percent increase from the previous year, so it's clear that the brand's big push into apps is paying off.
We’re also seeing the rise of apps that function as a complete ecosystem – where customers can do anything from chatting with friends, to managing their money, to ordering a taxi, all within one app. Gojek, Grab, and WeChat are great examples of these so-called super apps.
Building a seamless omnichannel experience
Creating an engaging app is a good start, but you’ll need to go further. Indeed, businesses must increasingly create a successful hybrid world where customers can interact with the brand and its products/services across multiple channels in a highly integrated way. From offline to online and back again, customers expect a seamless hybrid experience. This is what’s known as an omnichannel experience.
Don’t confuse omnichannel with multichannel. In a multichannel environment, customers can connect with your brand in multiple ways, but those channels aren't necessarily joined up and cohesive. But with an omnichannel approach, the customer or user can move between different channels – mobile app, desktop website, in-store, on the phone – and enjoy a truly cohesive experience. Research shows that brands with a strong omnichannel strategy retain, on average, 89 percent of customers, in comparison to 33 percent of companies with a weak omnichannel approach.
Yet again, we can look to McDonald’s as a good example of how to successfully integrate multiple touchpoints and create a holistic customer experience. Customers can move seamlessly between the app and the restaurant environment. Being able to order ahead of time and then have that order be prepared as you get closer to the restaurant, so it’s ready to hand to you when you arrive, is pretty cool. McDonald’s is so committed to building a holistic brand experience that the company has created a dedicated team to guide its end-to-end customer experience. The team will be responsible for everything from the physical design of restaurants to embedding the digital experience at every step of the customer journey.
Investing in new, digital-only products
It should be clear by now that the boundary between the real world and the digital one is becoming increasingly porous (if not meaningless). And this means many companies will want to start thinking about digital-only products.
So many sectors have already shifted from physical to digital goods – music being a prime example, but there are also books, magazines, art, and gaming. Take Rocket League as an example. My two boys love this game, which is a bit like playing football in an arena but with cars. The makers have created a whole ecosystem where you can buy or trade fancier cars and accessories – and, with my kids at least, these are the products kids are talking about at school. So, rather than having the latest must-have sneakers, kids increasingly want the latest must-have digital accessories.
The takeaway here? Whatever your industry, now is the time to start thinking about the impact that digital-only products may have on your company.
Of course, one of the major advantages of investing in digital channels and products – over and above the obvious advantages around customer engagement – is that you get to collect even more data on customer actions and preferences. And this precious data can help you design smarter products and services and offer your customers greater personalization.