The power of customers
'Customer is king' is a maxim that has been around for some time, even though reality often looked very different. Nowadays, customers, especially the younger ones, act in fact like royalty, since their smartphone gives them the power to. Comparing prices, reviews, recommendations and analyses on certain games and retailers – all of this is available in seconds so that toy retailers are faced for the first time with enormous market transparency and super well-informed clientele. The fact that the smartphone (just like the tablet or notebook) even doubles as a game console, and/or extension to analogue games makes the overall situation even more complex.
To exist in this hyper competitive environment – and ideally, to bypass the pricing competition a little – both retailers and manufacturers need to offer more than just a product. They must become relevant to customers by, for example, recommending new games or game extensions which de facto match their preferences. If they manage to build this type of a personalised relationship, they will create loyalty and retain their customer base. Especially if available 24/7 on every channel the customer desires.
Deriving the customer's wishes from data
To know one's customers, businesses need to collect data on them and gain workable knowledge they can use from this information which in turn forms the basis for their relevant and personalised communication with the customer. Currently, most businesses are very far away from this target vision. They often cultivate one elementary direct interface with their customers at the most. The IT tools that are necessary for this type of transformation already exist or are being developed. High-performance omnichannel, marketing, and CRM software is available, just like relatively easy-to-use packages for Advanced Analytics and Artificial Intelligence.
When looking at the individual segments of the consumer goods industry – whether basic commodities, sports articles or otherwise – one quickly realises that businesses that consistently modernise their IT systems and drive digitalisation will outperform their competitors. The issue of restriction due to storage capacities has in the meantime been solved with the help of today's cloud technology which, in fact, offers unlimited as well as flexible scalability. And on a final note, large IT restructuring measures, such as a complex, monolithic software launch, no longer require a business to shut down for years. Companies can simply up the speed of the adaptation, evolve organically, while at the same time keep operations running. This works, for example, by establishing agile methods and flexible structures, by launching DevOp – an approach to improving the software development and IT operation – and API Management (Web Application Programming Interfaces).
Next to IT, in-company transformation is decisive
IT is without a doubt a deciding factor, but far from the only, or even most relevant one. The deciding thing is to which extent the transformation is not of technological nature alone, but also strategic, organisational, and cultural. A Chief Digital Officer, for example, will hardly be of use if the position is nothing but a shell without content. Changing towards a customer-centric business will only work if financial ratios are replaced by customer-centric KPIs (Key Performance Indicators). If agile methods are to bring the desired success, such success must tear down the walls between the silos and establish cross-functional teams as the go-to standard. If, consequently, everyone at a company will adopt a data-centric and customer-minded approach, the business will be able to "own and master the interface with the customer".