How Adidas, Wholefoods and GE benefitted by going digital?

Sonal Desai

The next generation of revenue will come from digital business, according to analyst firm Gartner.

Digital business is the creation of new businesses by blurring the physical and digital businesses, explains Partha Iyenger, Vice President, Distinguished Analyst, Head of Research, Gartner India.

So whose going digital?

While there are many pilots, we present you examples of three organizations from different verticals that have benefitted by going digital.

US-based food chain, Wholefoods is using digital to increase customer loyalty. Wholefoods developed a technology which is pushing recipes to the customers based on the ingredients and the volumes they buy. For instance once the customer has purchased some ingredients in volumes, he or she immediately gets 5 fast party recipes on the mobile phone! How cool is that? This initiative has seen a s spike in customer loyalty at Wholefoods.

Adidas no longer wants to be identified its brand as a shoe manufacturer. Thanks to digital, it is transforming itself into a fitness brand globally. What Adidas has done is that it has installed a sensor in the shoes it manufacturers. The sensors allow them to capture data on the kilometers a wearer has run, and allows the runner to share the information on his or her social networking site. This initiative has seen Adidas customers coming back to the company for more.

GE is yet another company that is using digital to generate revenues. By installing sensors in the turbine, it sends real-time information that is being used to filter in revenue. GE has admitted that the next generation of its revenue from its digital business.

Back home in India, the State Bank of India, the largest public sector bank in the country, will soon bank on digital to propel its ambition to become the largest bank not only in India, but in the entire region. Iyenger asserts, "Arundhati Bhattacharya, Chairperson, SBI, is focusing on digital to make it happen. The fact that regulators such as RBI and SEBI are also opening upto digital is a big draw."

Is India ready?

In a survey of Indian CEOs, Gartner found that 10 percent of the CEO were already running a digital business, and the number would spurt to 41 percent in the next three years. Secondly, 62 percent of the CEOs reported that they have someone with a digital background on their board.

But be prepared for a change in reporting structure

Although CIOs and IT directors are the logical leaders to lead the digital business strategies, a new breed comprising the CMOs and Chief digital Officer (CDOs) are giving them stiff competition. Says Iyenger, "A parallel structure is emerging where organizations are looking at business impact of digital and therefore, CEOs are appointing a new breed of CIOs who report to the CMOs to make customer-centric investments; whereas the overall CIO continues to support the overall IT infrastructure. Therefore, for a digital strategy to succeed, a CTO and CMO should be joined at the hip, Iyenger remarks.

What will determine your digital readiness?

The top investment trends have changed to staffing, IT followed by R&D and automation, Iyenger concludes.