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Digital Transformation: Challenges and Opportunities

The sooner businesses understand and adapt to the new realities and embrace digital transformation, the bigger their chances of survival and growth.

Published on by Alex Cristache, Director of Design

Over the last two decades of my design career I’ve experienced a lot of ups and downs across the digital landscape. Poor management, personal decisions, and economic crises have all shaped my professional path. Here we are today in another challenging time, with people and businesses significantly impacted all over the world. But to those who have embraced digital transformation, these challenges have opened the door to new opportunities.

The current global health crisis has put an extraordinary strain on both businesses and consumers. Leisure, hospitality, and retail are among the industries that are being affected; B2B and B2C businesses need to rethink their short and long term strategies to survive. Some have already started their digital transformation, but for others the imperative for them to join the digital era and commit to it fully is now Let’s take a quick look at the landscape they will encounter in the digital world.

The Digital Landscape Today and Beyond

Over the years, the digital landscape has seen an amazing evolution that has pushed progress beyond some of our wildest dreams. Internet penetration has steadily grown and traffic has shifted from desktop to mobile usage. At the start of 2020 in the United States, 85.8% (284.05 M users) of the total population had accessed the Internet using any kind of device available. That number is projected to rise to 296.73 M users, meaning 87.2% of the total US population by 2025.

Retail eCommerce Sales Trend in the United States (2017-2023)

While this steady growth in internet adoption rate is a clear sign of a shift toward digital, if we look at statistics for age groups or eCommerce / online spending numbers, we see that the shift to digital is even stronger and forecasted to keep on accelerating.

The common belief is that the Internet is the playground of the young, and while adoption rates for the 18-49 age group are as high as they can be, it is worth noting that as of 2019, 88% of those aged 50 to 64, and 73% of the 65+ US population is accessing and using the Internet.

Digital Population and Internet Usage by Age Group in the USA
Digital Population, USA, January 2020
Internet Usage by Age Group, USA, 2019

Challenges and Opportunities in the New Digital Landscape

As people become more sophisticated along their digital journey, their habits will  change. The voluntary shift toward digital and eCommerce will be doubled by the need to adapt to the new realities of the world around us. With the abrupt decrease in pedestrian traffic, old marketing and promotional techniques are losing ground. Human billboards, sign spinners, and window promotions will not be as effective for the businesses that previously relied on them to capture the attention of passers-by. So, what does that mean for the future of their businesses? What are the new challenges they will need to face and what opportunities will arise in this new landscape?

Challenge: An Influx of New Users

The current healthcare crisis will only drive the aforementioned numbers up faster than predicted. Social distancing motivates people to explore new means of communication and interaction. For a lot of us, using the internet for purchasing meals, groceries, clothing, or even entertainment on-demand has been a day-to-day reality. Now, a lot of people that rarely engage with these services will become part of the digital economy, and will continue utilizing these online services in the future.

Opportunity: A New Momentum for Business Growth

With the influx of new users, businesses will face a broader market to target. That means new business opportunities, new leads, and new revenue. There’s a lot of potential for growth in this new environment, but success is not guaranteed. Bigger markets don’t directly translate to bigger profits. It takes a solid business and digital strategy to adapt to a market that has seen a rush of new, yet less tech-savvy people join. How businesses engage with these new users, and how they incorporate empathy into their business strategy and digital transformation will be their key to success.

Opportunity: Educating New Users

With new people interacting with the digital market, there’s an opportunity to provide guidance and education. Businesses can ease their entry and learning curve as they engage with a landscape they are unfamiliar with. Creating engaging and familiar user experiences is crucial for the success of these new interactions.

For a long time, businesses have been playing catch-up with their audiences. Now they have a chance at hitting the reset button. Digital transformation is not a one way street. It is not only businesses that (need to) go through it, but their customers as well. Demand is growing and so are the opportunities in this new digital world.

Challenge: A More Digitally Educated Audience

In the long run, businesses will face an even bigger and more digitally adept audience. If digital transformation didn’t seem vital before, it surely is now. Businesses have postponed, or very slowly implemented, digital transformation strategies for too long. While traditional methodologies allowed some to navigate the pre-crisis waters, nothing drives change like a do-or-die situation.

Digital Transformation across all age groups

Opportunity: Accelerating Digital Transformation

Through these times of hardship, survival of the fittest means hitting the fast-forward button on digital strategy. It is through digital transformation organizations can get lean and mean, allowing them to not just get through this period but come out the other side an optimized version of themselves. What will you do when there's no walk-in traffic to your store? What will you do when traffic resumes, but people's habits have changed, and online ordering becomes the norm?

The sooner businesses adapt to the new realities, they can accelerate their digital transformation, and increase their chances of survival and growth. Click To Tweet

Challenge: Growing Competition in the Digital World

With the accelerated adoption rates we’re seeing in the digital world, more and more businesses are ready to take the extra step needed to transform. Some will be more successful than others, but one thing is sure: there will be fierce competition. Businesses will have to be decisive in their actions. A slight redesign will not be a feasible long term strategy. Professional Services providers will have to adapt too to this new reality by optimizing their offerings, and the skill sets of their personnel.

Opportunity: Be a Leader in Challenging the Status Quo

People love strong, brave leaders. Crises don’t build character, they reveal it. This is an opportunity for businesses and their leaders to shine. Clients will look back at their time of need and remember who was there, helping them get through hardship. Many consider online ordering and delivery staff to be the heroes we’ve needed to maintain a sense of normalcy and balance through this because of their ability to act fast and with empathy. Be mindful of the realities of your customers and challenges they go through and it will translate into long term loyalty. Customers will look you up, industry peers will look up to you, competitors will try to be you. There’s nothing more flattering than successfully leading change you want to see in the world.

Digital Transformation is a Reset and Rebirth. Embrace it!

Change is hard. It is challenging and demanding. It requires time, money, and most of all the right people. More often than not, businesses fail to change because they lack the one key action that sets it in motion: the decision to do so. Due to our current market conditions, people and organizations will be forced to make those decisions, work through their fears of “too much change, too soon”, and collaborate with the right partners to not only survive, but thrive in an ever-evolving marketplace.

At Crowd Favorite, we build the future of the digital experience. We’ve been bringing established and scaling brands to digital optimization through our renowned digital strategy, design, development and digital support services.

If you have any questions or would like to discuss how your digital transformation is going, Contact us.