Today’s TextileFuture Newsletter presents to you two features, namely an insight in “Four Winning Patterns of Digital Transformation” offered by Bain & Company. Digital Transformation seems to be the most discussed development during the pandemic, thus we decided to provide some prominent information to you.
The second feature is a portrait of a Canadian innovator, entitled “Livescale enables Seamless Live Shopping Experience”, a contribution from guest author Deborah Weinswig, CEO and Founder, Coresight Research.
We sincerely hope that the two items will find your keen interest!
The beinning of the first item starts here:
Four Winning Patterns of Digital Transformation
While retooling to compete in a digital world is a major challenge, there’s a lot to learn from the companies getting it right.
By guest authors James Anderson and Laura Polasek from Bain Company
Companies responding to digital disruption inevitably focus on speed first.
They make changes quickly where it matters most—launching apps, forming Agile squads, deploying new analytics, and testing innovative digital business models. The primary objective is to stay one step ahead of the change.
Yet after an initial phase of success, these promising digital transformation initiatives too often lose momentum. On the way to scale and lasting impact, they run aground on legacy issues such as aging technology infrastructure, mismatched operating models, old ways of working, or cultures resistant to change.
This shows up in our annual survey of more than 1200 business leaders around the world.
Three years ago, when we asked respondents to prioritize what it takes to establish digital leadership, their answers boiled down to making faster decisions and executing quickly to create differentiated offerings. Today, there is a growing realization that speed on its own isn’t enough. While moving quickly to differentiate remains essential, capturing the full value of digital transformation involves scaling a company’s best initiatives across the organization for broad impact. That typically requires retooling the technology architecture while also building digital fluency and capabilities throughout the organization (see Figure 1).
The advantage that digital disrupters such as Amazon or Tesla have over incumbent companies is that they were built for purpose. Not only is their underlying tech infrastructure tailored specifically to their digital ambition but so is the way they operate, how they make decisions, and the way they use technology in their everyday approach to business.
Many incumbent companies have done a remarkable job of mobilizing to fight back against these disrupters through rapid deployment of new digital services and tweaks to their operating models. But they can only go so far before they run into the old ways of doing things—namely, a spaghetti tangle of legacy enterprise systems; a complex, siloed bureaucracy that slows decision making; and a cultural divide between IT and business operations.
Competing in a digital world ultimately means transforming both hard capabilities (the tech stack) and soft capabilities (the operating model) to create a business environment in which change can take root at scale and strategy is fully enabled by digital technology. Yet that presents a fundamental risk: How do you avoid disrupting your business just when you can least afford it?
Leadership teams undertaking digital transformation are starting to figure that out. Companies have enough experience at this point that they are seeing creative ways to build new bridges to the future without creating traffic jams in the legacy business. Looking at the most effective efforts, we’ve identified four patterns of digital transformation that allow companies to rebuild and compete at the same time (see Figure 2).
Pattern No. 1: Laying down the digital foundations
The first pattern involves companies that are under pressure to develop new digital capabilities and are essentially starting from scratch. The threat is clear and evolving steadily but has yet to produce a burning platform for change. Many industrial companies find themselves in this situation.
Large manufacturers, for instance, have long used technologies such as robotics to automate and optimize the production process. But the industrial application of data and analytics is evolving into a new basis of competition. Companies are using advanced analytics and predictive models to improve everything from supply chain management to maintenance and service. Implementing a new digital infrastructure requires an entirely new set of foundational capabilities, particularly around sensors and analytics used to collect and interpret relevant information across the company.
For one global auto company, starting from scratch meant that it was unburdened by a tangle of legacy tech infrastructure. But getting proficient in collecting the right data and building predictive models amounted to a major investment in technology and capabilities. At the same time, the company had to adopt new ways of working and change the way it made decisions. Adding to the challenge was the lack of a clear and immediate competitive threat that could galvanize the organization around the need to change quickly.
The automaker’s answer was to start small and build steadily. It launched a set of highly specific initiatives to gather data that could be fed into predictive models. It rapidly built prototype solutions that could prove out the investment and provide a clear demonstration of how powerfully the models could improve decision making. A predictive system targeting rework and maintenance, for instance, produced 90% improvement in performance and cut costs significantly. As pull for the solutions increased internally, the company began to scale both the new solutions and new ways of working that were critical to getting full potential from the investment. Step-by-step, it built both a new tech infrastructure and a new operating model to take advantage of it.
Pattern No. 2: Integrating a fragmented digital landscape
Companies that fall into this next pattern suffer from digital fragmentation—that is, they have no shortage of digital projects bubbling up across the company, but they lack the ability to prioritize the most promising initiatives and scale them across the organization.
This is common among global consumer goods companies with legacy IT systems that vary from one geography or function to another. While they may be doing lots of innovative things locally to serve customers, mismatched technology makes it difficult for the entire company to learn from those ideas and deploy them.
One global retailer found itself in this position several years ago when it recognized that the future of fashion retailing was in providing customers with a personalized omnichannel experience that seamlessly combined physical stores and digital channels. Making that work would mean changes to both the company’s technology infrastructure and its operating model.
On the tech side, the company needed to create a unified IT platform for capturing, scrubbing, and storing consumer data from across the web. A common data reservoir would let all parts of the organisation, from merchandising to finance, tap into the data to better understand customers and anticipate what they want in terms of personalisation. Taking full advantage of these new capabilities, however, also required a shift in management structure. Rather than try to develop initiatives ad hoc, the retailer created a data and analytics centre of excellence that could prioritize the best ideas emerging from around the business and enhance them using sophisticated machine learning and statistical models. That led to scalable solutions that could generate impact on a corporate scale.
Pattern No. 3: Digital transformation front to back
The third pattern also confronts the legacy conundrum in the core business, but the problem in this case is different. Rather than a fragmented IT architecture, these companies have years of accumulated systems that were built on top of each other as the business evolved. The resulting tangle of tech infrastructure ends up being inefficient and inflexible, slowing down the company’s reaction time.
This was the issue several years ago, when a large telecom operator recognized that it couldn’t keep up with rivals that were much faster at rolling out new price plans and tariffs. The competition was capable of launching quick, targeted pricing experiments to learn what worked with various demographic groups and then quickly double down on the winners. But the company’s complex legacy systems required it to code each change into the back end by hand, which limited its ability to quickly counter price moves or launch its own salvos to learn what might stick.
Aggressively tearing up the tech stack to start fresh ran the real risk of creating major disruption in the core business, so it launched a modular approach that allowed it to continue innovating on the front end while selectively rebuilding on the back end. The tech team essentially isolated the new front-end pricing systems from the legacy architecture and then built an application programming interface between the two, allowing communication where it was necessary but keeping everything else separate. That bought time to evaluate and modernize the back end as necessary, one module at a time. Managers threw out the parts that weren’t adding value, isolated the legacy systems that did work, and rebuilt or replaced the rest to match the new needs of the business. The result? The company cut time to market for new price plans by 75% and decreased the cost of those changes by 80 %.
Pattern No. 4: Launching a new digital attacker
Sometimes, the magnitude and pace of disruption in an industry require more change than an incumbent company can support. Its size, complexity, or resistance to change might prevent it from moving fast enough to remain competitive. Increasingly, the answer is to launch an entirely new business to attack opportunities that the core business cannot. This can be a bold bet that involves substantial risk. But it’s probably no riskier than hunkering down behind the moat and hoping that incremental improvement will be enough to fend off insurgent competitors.
A digital attacker is both an offensive and a defensive bet. On offense, it allows companies to enter a new market with a tailored, lightweight solution that is free of legacy baggage. On defence, it gives the company a fresh value proposition to attract new customers within its existing market—for instance, aiming at millennials, students, and young professionals to build the customer base of the future.
Consider the choice made by one traditional retail bank. While there was nothing immediately wrong with its core business—catering to affluent customers with complex financial needs—the client base was aging, raising questions about the bank’s ability to compete in the future. Retooling the core operation to attract a younger clientele would not only be disruptive but it would also take too long. Instead, leadership decided to launch an entirely new online bank with a separate brand built to appeal to a tech-savvy customer.
The project required substantial investment in a modern cloud-based technology infrastructure. The bank had to commission a mobile-only user experience powered by state-of-the-art payment systems and frictionless customer journeys. But within 12 months, the mother ship had hatched a digital competitor with a cost base that was approximately 70 % lower than the traditional operation. And in addition to tapping a new set of customers that it can cultivate with more sophisticated financial services over time, the new platform became an invaluable engine of innovation. It offered a test bed for next-generation banking technologies that eventually could be imported into the core operation.
Finding your way to boldness
These four patterns, of course, can’t capture the myriad risks and challenges companies face as they contemplate how best to transform themselves to compete in a digital world. They are meant as broad archetypes that highlight the interplay of practical realities that any transformation journey entails, especially during a time of accelerated disruption. They encourage corporate leaders to consider two critical factors.
What is the nature and immediacy of the digital disruption our industry is likely to face?
What must change within our technology stack and operating model to enable the company to move fast enough to keep pace?
We find that there’s a tendency to underestimate on both scores: Disruption is probably happening faster than you think, and the challenge of transforming a company to remain competitive is probably harder than you expect. That tendency too often leads to incrementalism or a strategy of launching small digital initiatives that ultimately fail to move the needle.
The companies that fall into our four patterns recognize that any successful digital transformation depends on a balancing act—namely, the ability to scale meaningful change without disrupting the core. Every company finds its own path, but all winning digital transformations share one thing in common: a willingness to be bold.
Here starts the second feature:
Innovator Profile: Livescale Enables Seamless Live Shopping Experiences
By guest author Deborah Weinswig, CEO and Founder, Coresight Research
As part of our Innovator Profile series, we profile Livescale, a platform that provides e-commerce infrastructure for brands and retailers to host seamless and engaging live shopping experiences.
• Livescale’s livestream shopping technology offers a complete customer-branded solution to give merchants full control over the look and feel of their live shopping experiences.
• By enabling brands to integrate their live store fronts across channels, Livescale is supporting brands to provide seamless livestream shopping and payment services.
• Livescale identifies its brand-owned experience offering and high level of customer service among its key competitive advantages in the livestreaming space.
What’s the Story?
This report is part of our Innovator Profile series, which focuses on emerging technologies that are disrupting traditional retail and fuelling innovation across the retail value chain.
In this report, we profile Livescale, a platform that enables brands and retailers to host engaging live shopping sessions and make purchases directly within a livestream via the dedicated app. Coresight Research collaborated with Livescale to offer insights into its service capabilities and Offerings.
Why It Matters
Livestream shopping is set to continue growing rapidly, with the US livestream e-commerce market set to reach USD 11 billion in 2021 and USD 35 billion in 2024, Coresight Research estimates.
Brands and retailers will increasingly turn to live shopping channels to engage consumers.
Livescale’s livestream shopping technology offers a complete customer-branded solution to give merchants full control over the look and feel of their live shopping experiences. In addition, Livescale focuses on enabling retailers to integrate and manage their inventory and live storefronts across channels. The company also offers actionable business insights to ensure visibility into the online customer journey, which is crucial as consumers return to more normal ways of
living, working and spending.
Livescale: In Detail
What Problem Is the Company Solving?
In the emerging livestream e-commerce landscape, brands are struggling to integrate and manage their inventory and live store fronts across channels. Livescale enables brands to manage their inventory, customer experience and payment functions within one seamlessinterface. In addition, Livescale’s 2020 partnership with Shopify will accelerate the integration of seamless live shopping for small and medium brands as inventory and e-commerce features are automatically synced between the Livescale and Shopify operating systems.
For example, in June 2021, Livescale enabled L’Oréal Canada to participate in North America’s first Live Shopping Beauty Festival across multiple channels, managing inventory across its website and various social media channels. Livescale created a three-day shopping experience with 20, events featuring celebrity hosts and exclusive deals. To date, L’Oreal Canada has seen an average of three times more sales across its Livescale live shopping events than on its e-commerce channels.
Additionally, the company claims that its integrated checkout, immersive client resources andoutstanding customer service are unique within the industry, leading it to be recognised my LVMH as one of 2020’s most innovative technology companies.
1. Seamless payments: Many of today’s consumers shop across a variety of livestreaming channels, making it increasingly important for retailers to provide seamless shopping experiences within a live shopping session. Livescale’s solution enables brands to present items discussed on livestreams to consumers, offering the option for shoppers to read more information and finish payments within the same page.
2. High level of brand control over customer experiences: Livescale differentiates its offering with its capability to pair directly with a custom, brand-owned product dashboard, allowing the broadcasting team to create their own fully branded end-user experience. This comprises choosing from and tailoring a range of features, such as a branded landing page, color customisation, enhanced gamification features (polls, chats, quizzes) and a unique giveaway function that allows one-to-one user communication.
The company claims to stand apart from its competitors with this level of investment in gamification, shopper engagement and community management within live shopping. In addition, the company updates and revamps these features on a monthly basis.
3. Live shopping ecosystem: The company has built a unique training and educational database named “Livescale Academy,” where clients can access hundreds of documents, videos and content to become sales category experts. Livescale updates its database every day.
4. Customer service support: Livescale provides a designated customer success team for each client, which consists of a group of experts from all over the world, always on-call toensure each live shopping show goes off without a hitch, and that each host/brandmember is trained and empowered to sell and engage with as much confidence as possible. Especially for early adopters to the solution, the support and education is paramount.
Strategy for the Post-Pandemic Market
Pandemic-related lifestyle changes have led to a huge swing in demand for livestream shopping for retail companies largely accustomed to incremental shifts. Livescale aims to adapt to the dynamic retail environment to increase value for brands through enhanced analytics offerings, new live shopping features and improving its connected live shopping ecosystem. Additionally, Livescale states that it has the most accessible pricing options for small and enterprise level merchants, ensuring an easy path to growth.
Livescale is looking to continue creating solutions for brands beyond cutting-edge live shopping technology. This comprises offering a wider range of pricing opportunities for brands of all sizes and enhanced modules and analytics for clients, both in real time and for after events.
What We Think
Many brands and retailers already leverage live shopping features in their online business. However, Livescale enables brands to integrate their e-commerce inventory and customer journey to provide a seamless livestream purchase experience. In addition, Livescale’s comprehensive live shopping training materials and high level of brand control and customisation should prove valuable to emerging businesses in managing their live video
Newsletter of last week
Forward Thinking on economic recovery and gender equality with Laura Tyson https://textile-future.com/archives/73508
The highlights of last week’s NEWS, for your convenience, just click on the feature to read.
Foot Locker to buy Two Retailers for USD 1.1 Billion https://textile-future.com/archives/73673
One in twelve adults in the EU consumes alcohol every day https://textile-future.com/archives/73846
First Lithium Solid State Battery Produced by 3D Printing Start-up Sakuu https://textile-future.com/archives/73541
New York Auto Show cancelled because of Delta Variant https://textile-future.com/archives/73764
China causes nervousness in financial markets https://textile-future.com/archives/73564
BASF and SINOPEC to further expand their Verbund site in Nanjing, China https://textile-future.com/archives/73792
Industrial Policy’ Is Back: The West Dusts Off Old Idea to Counter China https://textile-future.com/archives/73513
The Restory Expands into Clothing Aftercare https://textile-future.com/archives/73691
LK Bennett launches clothing rental service LK Borrowed https://textile-future.com/archives/73789
Swiss Empa: Concrete – Prestressed plasters for old buildings https://textile-future.com/archives/73657
VF Reports First Quarter Fiscal 2022 Results; Raises Full Year Fiscal 2022 Outlook https://textile-future.com/archives/73525
Swiss Forbo with Double-digit organic sales growth – disproportionately higher operating profit – group profit doubled – guidance increased for full year 2021 https://textile-future.com/archives/73556
L’Oréal’s New Digital Chief takes Cosmetics Virtual https://textile-future.com/archives/73820
ICAC: Revival Expected in World Cotton Production in 2021/22 Season https://textile-future.com/archives/73669
Strong upswing in Swiss consumer sentiment over pre-crisis levels https://textile-future.com/archives/73585
OECD annual inflation picks up to 4.1 % in June 2021 https://textile-future.com/archives/73642
OECD household income grows strongly in the first quarter of 2021, driven by significant fiscal expansion in the United States https://textile-future.com/archives/73739
The McKinsey week in Charts https://textile-future.com/archives/73896
Schools Look for Help From AI Teacher’s Assistants https://textile-future.com/archives/73855
Worth Reading: Production Transformation Policy Review of Egypt by OECD https://textile-future.com/archives/73784
FILTECH 2022: Innovation Forum presents solutions for detecting, removing and preventing microplastics https://textile-future.com/archives/73613
Autumn Editions of Intertextile Shanghai and Yarn Expo rescheduled to October https://textile-future.com/archives/73666
Why plus-sized fashion makes business sense https://textile-future.com/archives/73552
Domotex: Interiew with Hany Amin, Export Manager of Oriental Weavers https://textile-future.com/archives/73732
Latest updates on the Conference Programme of the Conference on Sustainable Finishing of Textiles https://textile-future.com/archives/73777
Is the fashion industry suffering from influencer fatigue? https://textile-future.com/archives/73728
OETI – Institute for Ecology, Technology and Innovation on Flooring Technology https://textile-future.com/archives/73686
Coats raises thousands of pounds for Save the Children https://textile-future.com/archives/73547
Fliers are fed up with Airlines. It’s time for a new Bill of Rights https://textile-future.com/archives/73700
Teijin to donate Medical Protective Equipment for Healthcare Professionals in India https://textile-future.com/archives/73678
The Mascot Whisperer https://textile-future.com/archives/73864
CIRC to partner with Andritz to commercialise recycling technology https://textile-future.com/archives/73876
276 200 under 15s got a European first residence permit for family reasons in 2019 https://textile-future.com/archives/73710
Officina+39 joins Bluesign to drive sustainability https://textile-future.com/archives/73881
GreenFiber launches Colour for 2021 https://textile-future.com/archives/73607
Econyl launches B2C platform for conscious consumers https://textile-future.com/archives/73795
Fanatics Brands gets accreditation from Fair Labour Association https://textile-future.com/archives/73803
Dotte introduces resale collective to promote circularity https://textile-future.com/archives/73812
PureCycle to build polypropylene recycling plant in Georgia https://textile-future.com/archives/73826
Reliance Industries plans to double PET recycling capacity https://textile-future.com/archives/73860
PrAna achieves its goal of zero plastic packaging https://textile-future.com/archives/73886
AATCC: Transparency: A Clear Foundation for Standards Development https://textile-future.com/archives/73722
Stream These 12 Titles Before They Expire in August https://textile-future.com/archives/73832
Thomas Jefferson Gave the U.S. Constitution 19 Years. Look Where We Are Now https://textile-future.com/archives/73752
Swiss Federal Councillor Ignazio Cassis in Vietnam: political talks focused on strengthening trade relations https://textile-future.com/archives/73800
SDGs & me: Life below water https://textile-future.com/archives/73569
Think Sustainability Is Simple? This Sheep Farmer Would Like a Word https://textile-future.com/archives/73579
Global Apparel Issue 48 and White Paper “Rethinking LCA and Product Stewardship for Sustainable Businesses”- concrete support for companies https://textile-future.com/archives/73600
Workwear Range made by Freudenberg: Optimal protection and maximum flexibility for workwear https://textile-future.com/archives/73596