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Never has the opportunity for digital transformation in CPG and retail been so clear: in a holiday shopping season in which people continue to shy away from in-person shopping, Adobe forecasts that online sales will increase by 33 percent to $189M, essentially accounting for two holiday shopping seasons in one.
So why is digital transformation still so complicated for companies? According to McKinsey, 70 percent of digital transformation projects fail. As we look to the burgeoning holiday shopping season, what can we do to amp up our digital transformation initiatives?
For a recent web event Move faster, work better, sell more — with AI, we brought together three experts:
- Ritu Jyoti, the head of global artificial intelligence research at IDC
- Sumaiya Balbale, CMO at Sequoia Capital and former CMO at Jet.com and
- Declan Roche, Worldwide Director Global Digital Applications & Americas, at Colgate-Palmolive.
Here are three takeaways that emerged from a very energetic session:
1. Know exactly what you’re transforming.
Digital transformation means a lot of different things to people - and much of it is wrong. “A lot of times, it's a very superficial set of words that get used when companies are talking about staying ahead of the curve without necessarily the depth that's required to understand why you're pursuing a change you wanted to actually have on your business.”
Transformation is a cultural change for business; it’s not simply, as all the panelists said, about the technology. For Roche, digital transformation is a “means to an end” and must be outcome driven. “Digital transformation for a company like Colgate, which is over 200 years old, is an absolute necessity to continue to grow in the current climate. [And] it's really been accentuated in terms of the importance of it during the last seven or eight months as well.”
As you take on digital transformation, don’t start with the technology: start with the purpose - with the understanding that any business transformation takes time and patience.
2. AI plays a critical role in driving growth and efficiencies - when you automate the correct processes.
Most AI projects fail. That’s simply reality because, like digital transformation, companies often think too broadly and take on too much as they approach AI.
So when you sit down, what should you automate for? Roche and Balbale point to three areas:
- Efficiency. Roche advises asking yourself, “What can we do that's pretty repetitive that could be easily automated and that’s a clear opportunity?” These processes are typically manual, tedious processes that, when automated, free up employees to focus on more strategic or business critical tasks. Creative departments may use automation to help manage the incredible volume of imagery, merchant organizations might apply automation for supply chain management.
- Growth. At Colgate-Palmolive, Roche has overseen automation that has a direct impact on the bottom line. For instance, the company uses meta tagging with images so that they can be shared with e-commerce sites. But what about revenue teams that can develop personalization engines?
- Insight. There are product management, product information management, creative asset management, and data asset management tasks that are very laborious to do. The knowledge gained through automation can “provide greater organizational insight on where you might place product development and how you might want to connect with your customer in greater detail.”
3. Data - the volume of it, the completeness of it, and your trust in it - drives everything you do.
As Balbale said, “there will be times you trust your automation engine but there are other times you’ll need to step in and make adjustments. And this speaks to such a big piece of digital transformation and automation, that a human feedback loop is critical to success.
“These machines only learn and they only spit back to you based on the quality of the training data you give it,’ said Roche. “But, you don't want to make it about this human versus the machine because you'll keep fighting what it's doing. So if it's suggesting something you have to go with it to a certain extent and have some trust.”
There’s a lot more in the recording - including an anecdote about a connected toothbrush that every kid needs in his stocking this holiday season - so we hope you’ll check it out. Stay tuned for our next Enabling AI Success webinar session, which we plan to announce later this month.