COVID-19 Accelerates Digital Transformation & Growing Customer Data Importance
The coronavirus pandemic has presented a serious business challenge for many industries. This has ranged from supply chain interruptions to an upheaval in consumer behavior. During recent months, brands have had a unique opportunity to evaluate the appropriate response to unforeseen external challenges.
Some companies have looked inward, examining their own internal digital competencies in lieu of changing real world customer expectations. In many cases, brands with a strong digital presence have reaped untold benefits. Others have discovered key gaps in how they operate—forcing management to accelerate the need for better digital transformation planning and delivery.
As brands adapt to this new normal, where should they focus their digital transformation efforts? What are the marketing practices and technologies that will yield the best results? And what is the role of customer data?
In a recent fireside chat, we explored these topics and more, with two leading industry thought leaders in the digital marketing ecosystem.
Lucas Borgas is Senior Global IT Manager at Anheuser-Busch InBev, one of the world’s best known beer brands. AB InBev has made a big push in recent years to harness its customer data to deliver highly personalized messaging via social media, advertising, mobile, and more. Stephano Fanfarillo is Director of Personalization and Digital Marketing at the Boston Consulting Group (BCG), a leading global strategy consulting firm. BCG has led a number of digital transformation initiatives for key Fortune 500 companies.
The conversation provided unique perspectives on digital transformation trends—both from AB InBev, representing an end-user of marketing technology, and BCG, representing the architect of digital transformation strategy and operations.
We’ve summarized four key takeaways below.
#1. Digital transformation is now an enterprise-wide goal.
The concept of digital transformation is constantly evolving, and Fanfarillo has witnessed these changes firsthand. Only a few years ago, transformation initiatives were typically led from the bottom up, spearheaded by individual departments to achieve narrow goals like digitizing records libraries. Today, however, digital transformation is a C-level agenda with a much broader scope that encompasses multiple departments—and is truly enterprise-wide. Companies’ strategic visions are also usually more ambitious and overarching. Examples might be implementing more effective and creative methods for connecting with customers in a digital environment.
Moving forward, how organizations approach digital transformation today will determine whether they successfully beat the competition tomorrow. “The key is that [digital transformation] is no longer about a destination,” says Fanfarillo. “It’s more about whether an organization is traveling in the right direction and adjusting that direction along the way.”
During the past few years, AB InBev has been pursuing numerous digital initiatives. While once viewed as burdensome expenses, internal attitudes have recently changed. “Many people are now seeing these initiatives with a new perspective, and they’re treating them as an investment and an opportunity to grow,” says Borgas.
This truth really sunk in when the pandemic hit and AB InBev had the IT infrastructure already set up to facilitate a work-from-home reality. Because it was ahead of the curve, AB InBev was able to quickly launch a coronavirus response to help essential workers, local businesses, and consumers. One of its first initiatives in March 2020 was a pivot toward manufacturing hand sanitizer for healthcare workers at its breweries and distilleries. The company also developed a digital tracker to help consumers locate local bars and restaurants open for takeout amid the pandemic shutdown.
#2. Opportunities: Customer data is central to digital transformation, even in CPG verticals.
Savvy marketers want to deeply understand customers. Achieving that goal, however, can be challenging especially for consumer packaged goods (CPG) companies like AB InBev. With most products distributed through intermediaries like supermarkets, it’s difficult to capture customer data for deep insights. To solve this problem, some CPG companies are partnering with retailers to share data in a clean room environment.
Many other companies are building out their digital media capabilities to establish a direct customer relationship to gather their own first-party customer data. Fanfarillo mentioned an example where Scott’s, a CPG grass seed company, created an app to help consumers design and maintain their lawns. Other CPG companies are launching direct-to-consumer (DTC) businesses, like Nestle Ready Refresh which gives consumers a way to order beverage delivery directly online. The goal with these digital projects is not only capturing first-party customer data but offering something in return. “Our research shows that consumers are open to sharing their information in exchange for value,” says Fanfarillo.
Over the past few years, AB InBev has done a lot of work to directly connect with customers, like running its own pubs and creating DTC channels, loyalty programs, and more. However, one of its biggest challenges has been connecting all of its disparate data for deep insights. Says Borgas: “AB InBev needed a way to connect [customer data] all in a single database to build a unified consumer understanding. Here at AB InBev, our CDP (customer data platform) is now our single source of truth…. I think our CDP—combined with other platforms in our martech stack—is going to support us big time in the future.”
Big data has been generating buzz for quite a while now. Traditionally, the goal of many digital transformation initiatives has been to collect data. What’s been missing, however, is the ability to collect and analyze data from all data sources, not just what’s conveniently available. Marrying offline and online customer data, for example, requires a lot of data transformation and translation. This is often seen as a complex and inconvenient data technology hurdle.
Another obstacle remains: How to analyze and interpret all this data elegantly, in an elegant business framework that makes sense to the marketer? Customer journey mapping is a great example. How do I get customers to move from awareness to consideration to purchase more quickly with personalized messaging? How do I accomplish this in a data-driven way?
Rising up to the big data challenge has been a steady evolution of marketing technology—most recently, customer data platforms (CDPs). CDPs help marketers collect, analyze, and activate data that reside in different silos that don’t talk to each other. With access to a broader set of customer data, marketers can now use CDPs to get a richer and more holistic understanding of their customers, their buying preferences, and how to best reach them through personalized messaging.
#3. Look where leaders are focusing digital transformation investment during the pandemic.
The pandemic has changed all of our lives in significant and unforeseen ways. To adapt, organizations have sped up their embrace of digital transformation. Boston Consulting Group’s Fanfarillo has seen a big surge in demand for ecommerce, digital experience management, and digital marketing capabilities.
The pandemic also taught organizations some valuable lessons about data management. There has been a push to implement solutions for data capture and dissemination. Having seen firsthand how important it is to keep employees and customers updated, organizations are looking to streamline communications. Also, surges in demand for certain products early in the pandemic meant products often went out of stock. Now organizations are working to leverage external signals and merge them with internal data to better manage operations.
For AB InBev, the pandemic has inspired new creative marketing directions to forge better connections with consumers. Borgas says this has meant diverting marketing spend from live sectors like sports and entertainment to virtual events. Instead of being in advertising mode, AB InBev has focused its marketing investments on being relevant.
These virtual events were launched in April 2020 as AB InBev worked to help people cope with the new normal. Several of AB InBev’s brands sponsored music entertainment through their digital channels. In one example, Bud Light hosted a “Dive Bar Tour: Home Edition” that featured popular bands and musicians likely to be enjoyed by the brand’s customer base. In another, Michelob Ultra sponsored live-streamed workouts featuring trainers and studios across the country who were out of work due to the shutdown.
#4. Plan strategies for using digital transformation to prepare for what’s next.
Typically in a recession advertising and marketing budgets are slashed and new strategic programs are put on hold. Currently, Fanfarillo says that overall marketing spend is down while digital marketing is up. But no two recessions are the same, and the impact of the crisis has varied widely by sector.
However, all sectors share an urgency for digital transformation because they’ve witnessed its fundamental importance. In this light, brands are adapting and reallocating investments very quickly. “We’re seeing projects that would have typically taken six months now being done in six weeks,” notes Fanfarillo.
Looking ahead, two major trends are reshaping organizations as they plan for the future.
First is ecommerce. Since the pandemic began, there has been a 25 percent increase in U.S. ecommerce transactions, which is expected to grow exponentially larger. The second trend relates to the workforce. Organizations understand their employees need to be productive while working remotely, and operations management needs to take place in safe, contactless interactions. Digital transformation technologies in these areas are a priority, according to Fanfarillo.
Position your brand for success
In times of uncertainty, it’s also incredibly helpful to harness your big data for organizational efficiency. Borgas says that AB InBev has found its Treasure Data CDP to be an invaluable tool for connecting to customers and putting data at the center of its marketing operations. “Before [deploying a CDP], we weren’t able to connect all our data signals,” says Borgas. “Now we can connect all consumer signals into one centralized database for the entire company. So we’re able to apply all our learnings—using machine learning or data generated from our algorithms—to understand more about our consumers. And once we find something interesting, we can implement and scale it very fast within the business.”
For more insight into how brands are using digital transformation across the enterprise, listen to the entire panel conversation “Digital Transformation and the Role of Customer Data.”