Tales from the digital frontline Part 1 - Graze, Booker Group and Lloyds Bank
- Summary:
- Three end user organizations from three different business sectors drill down on what it takes for effective digital transformation.
Last week I moderated a panel debate on the subject of digital transformation, run by Accenture as part of London Tech Week, which saw three very different businesses providing an insight into the challenges they face in the digital economy.
The one thing all three - health food provider Graze, food wholesaler Booker Group and financial services firm Lloyds Banking Group - have in common is that investment in digital has empowered or is empowering change in the business models for their respective sectors.
Anthony Fletcher is CEO of Graze, which ships boxes of healthy snacks to customers in homes and offices. Only five years old, Graze can legitimately be described as a digital native company. Fletcher says:
If you’re going to build an FMGC brand, then it’s much better to do it with technology. There are advantages that technology gives us that allows us to win against the competition.
Technology gives you new and superior ways of building brands. If you go to the average lady in the UK and ask her to name you a healthy snack brand, she’ll say Graze, followed by WeightWatchers and Special K, brands which have been around for many years and spent hundreds of millions of pounds in that time building their brands.
Technology lets you build your brand in new ways. Data lets you understand your customers quicker and in different and more intelligent ways. It lets you innovate in different ways. Many of the products that we make are inspired by the data and customer feedback. It means that we can release new products every fortnight rather than every year.
But sometimes it’s all about confidence and instinct, he adds:
When we launched in the USA, we launched with our UK range. We decided it made more sense to do zero market research, launch our UK range, be agile and respond to the data than even talk to an American.
Reinvention
By contrast, Fletcher’s fellow panelists represented businesses and sectors that have been around for centuries. Booker Group, for example, was founded in 1835, but is reinventing itself through strategic use of digital technology. Chief Digital Officer Arif Harbott explains:
At Booker we’re trying to take a business that’s had 300 years of running only one channel. When they started out, it was only boats and shipping goods across the Atlantic. How do you take a business with 300 years of one channel and bring it into the digital age?
My mission is to take digital and use it as a tool to help customers to save money or make money. Our business really focuses on two things - profit making and customer satisfaction. If I can use digital in both those corporate objectives, that’s much better than saying, ‘Hey, I’ve got this shiny new toy that may or may not be successful’.
It’s all about focusing on the customer and what it is that they want and letting that shape the digital strategy, advises Harbott:
If you concentrate on the customers and be where they want to be, that works. Some customers will just want to go into one of our big sheds. But more and more of them are trying to transact with us differently. A lot of our customers own their own businesses and their own retail outlets. People will say to me ‘We don’t need a mobile solution’, but then you go out and see these customers and they’ve got their iPad or their mobile out and they’re trying to pinch and zoom on a site that’s not mobile-optimized.
Such is the importance of meeting those customers digital expectations, digital transformation has become a board level agenda item within Booker. Harbott explains:
Because we are such a customer centric organization and we have customers telling us they want to do digital, then digital is now at the highest levels of the organization.
Our digital steering group has the CEO, the MD and all of the exec in it. They are coming to me now and saying, ’We have heard this from customers that there’s this digital tool’. Instead of me going out and shouting about it, they’re coming to me and that’s the way it should be.
Like Booker, Lloyds Banking Group represents an industry sector facing up to digital disruption. It’s an ongoing battle, says Phil Allen, Director, Digital, Wealth and Retail Investments at Lloyds Banking Group:
I’ve been in banking since the late 1980s and in digital since around 2000. So I’ve lived with digital disruption since then because every time we think we’ve got something right, it changes. I remember when we gave customers Nokia 8110s, the banana phones. They threw them straight back at us because WAP was rubbish. It took 15 minutes to log in. Now of course we all do banking on our mobiles.
Lloyds Banking Group has to address digital challenges on two fronts: the digital transformation of traditional banks and the rise of digital pureplay challenger banks. Allen says:
At Lloyds we’re aware of the challenge that people are eating our lunch, very very slowly and in small bites, but the threat is there. We have built our own innovation labs. We collaborate with the Fintech industry because we know that the customer expectations these days are much, much higher. The comparisons that people make every day are not with the competitor banks but with the way they buy music or the way they buy food. That’s where we focus.
As with Booker, Lloyds Banking Group has seen digital rise up the executive agenda:
When I started in digital banking I used to have to fight to talk to the marketing team to get digital on the agenda. I used to tell my team that one day we would be in that top ten of things that people think about when they launch a new product or service.
Nowadays my boss’s boss is a board member of LLoyds Banking Group. For me that’s an immensely proud moment to see digital that central. All industries are starting to see digital gravitate towards the center and to lead the development of the organization rather than following on as an add-on service.
For Lloyds Banking Group, there has been a recalibration of the balance between online and offline banking to reach a new detente. Allen explains:
In the old days we recognise that there was a channel grab. Digital wanted to be the winner and do everything and win over from the branches. It’s absolutely not that approach today. The customer is driving what we do and we know that customers have got complex needs. If they’re buying a mortgage it’s an emotional investment. We know that they can do so much of the research at home and start the process themselves, but they absolutely want to come into a branch to talk to someone and get that emotional connection. Making that process easier by letting customers do some research at home and then continuing that journey in a branch is.
In part two of this special report, Graze, Booker Group and Lloyds Banking Group consider the emerging role of wearables and pitch their ideas on the Internet of Things.