Forrester Research Welcomes You to the Digital Revolution

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It feels like 1999 all over again at the 2013 Forrester Research eBusiness & Channel Strategy Forum, whose theme is “Lead the Digital Business Revolution.” About 750 attendees from big brands like Southwest Airlines are coming to grips with a wily consumer who uses digital to disrupt entire industries, just as consumers did when the Internet exploded more than 10 years ago. Only this time, consumers are creating their own digital journeys in far more sophisticated ways, across multiple devices, websites, and social spaces. According to Forrester Research, executives of big brands need to transform themselves into digital leaders to thrive amid a new digital revolution.

Forrester issued the challenge through two opening presentations on November 5, one by Vice President of Research Bill Doyle and the other by Vice President Martin Gill, who recently co-authored the report, “The Chief Digital Officer: Fad or Future?”

According to Doyle, “The digital revolution is at the doorstep. But senior leaders are not devoting serious money or resources to digital. They don’t appreciate the urgency.”

Doyle indicated that the Internet is even more disruptive and dangerous than it ever was, causing major brands like Blockbuster and Borders to fold and other institutions such as The Washington Post to be sold to unexpected entrants like Amazon. Commenting on the Amazon/Washington Post deal, Doyle said, “If this is not the sure sign of a revolution afoot, I don’t know what is.”

He said, “Digital is changing the product itself,” in industries such as hospitality, where Airbnb has disrupted traditional models for lodging, and shared services such as Lyft have disrupted transportation. Even technology leaders like Microsoft and Oracle are facing threats from new digital players.

At the heart of this change is the “digital first” consumer who increasingly turns to digital to understand brands and interact with them. He pointed out that 82 percent of all consumers research a product before buying, and most of them use digital channels to do so.

“Most U.S. adults are always connected,” he said. According to Forrester data, more than one fourth of U.S. adults have made the “mobile mind shift,” becoming people who connected frequently with multiple devices from multiple locations.

“Consumers who have made the mobile mind shift expect the desired goods or services to be available on their device at their moment of need,” he said. “If you are not present, you will not get discovered.”

So what’s a smart business to do in order to connect with the “digital first” consumer? According to Doyle, the leaders will embrace digital by:

  • Becoming customer obsessed. For instance, Domino’s has achieved $2 billion in online sales and uses social to understand consumer behavior.
  • Rebuilding around what customers want. Allied Irish Banks is transforming into a digital bank in the aftermath of the financial meltdown of 2008.
  • Anointing a digital change agent. For example, Hallmark named Paul Barker to the role of chief digital officer to make the fabled brand more responsive to digital.
  • Reallocating budget. Krispy Kreme has eliminated traditional advertising and relies on digital to spread word of mouth.
  • Giving people control over data.

Gill, speaking after Doyle, took a closer — and tough — look at the role of the digital change agent.

“Businesses need revolutionaries,” he said simply. “But the first revolutionaries through the wall are going to get a bloody nose,” he continued, paraphrasing the movie Moneyball. “You are going to have fights. You are going to have arguments. You are going to get bloody.” Those digital skirmishes will happen because big brands are mired in big-time problems, such as having antiquated information technologies or lacking digital strategies. According to Gill, only 56 percent of executives surveyed by Forrester possess digital strategies, and only 23 percent believe they can deliver on the ones they have.

But there is good news, too: revolutionaries have access to far more performance data than they ever had — data that substantiates how digital consistently increases sales and improves efficiencies. “Revolutionaries can build clear cases for their organizations to become more digitally mature,” he said. The revolutionaries willing to get their noses bloody, can, in fact, succeed. According to Gill, here’s how:

  • Start with a digital vision. Be like Burberry, which fundamentally altered its business processes through within an overarching vision for transforming customer services.
  • Create conditions for transformation. For instance, consolidate your digital strategy under single customer-focused leaders, which Nespresso has done by establishing a digital team that provides core platforms and processes. Or organize around your customer, not around a function, as CVS Pharmacy has done. Or be like Nissan, which has adopted a faster, more iterative approach to adopting digital.
  • Master three essential digital skills: setting and communicate a digital strategy; managing digital change; and operating and optimizing digital touchpoints.

“You need to step up and start driving this transformation,” Gill said, challenging all the brands in the audience.

To be sure, Doyle and Gill outlined a tough scenario. But there is good news as well: business leaders now have more data at their disposal to understand consumers. And big brands like Nissan have learned how to be agile and change rapidly. Words like “revolution” and “transformation” no longer seem so intimidating as they did when the Internet exploded in 1999. The leaders of the current revolution will develop a vision for change and continuously embrace change themselves.

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