Seize the moment. Business digitalization

21/ 08/ 2018

Oleksandr Farkosh. Sales Director of JTI Ukraine, 16 years of experience in marketing and sales Have you ever thought about how much the world has changed over the last 100 years? Let’s go back to 1918 for a while. People just realized what the gravitation is and we still do not know the DNA structure. The first computer will appear only 23 years later, a prototype of the Internet in 51 years and mobile phone - after 56 years. Do you imagine your life without these inventions? Meanwhile, progress goes on and technologies change the business environment every day. Who is a modern customer? The consumer’s profile is rapidly changing as well. Globally there are four key trends: Urbanization. Urban population grew up rapidly from 751 million in 1950 to 4.2 billion in 2018. By 2050, 68% of the worlds population is expected to live in cities. Aging population. The percentage of people aged 60+ will double by 2050 and reach 2 billion. Households size drop. In India, for instance, average household size has fallen from 5.6 in 1990 to 4.5 in 2015. It will fall to 3.9 in 2020 Smartphonizing. In 2015, 25% of the world’s population used a smartphone. In 2018, this figure increased to 33%. The modern shopper has become more demanding and dictates to the market his own terms. Now, business should predict, which need the consumer will have tomorrow, and prepare to meet it today. The customer’s priorities have changed. He focuses on convenience and time saving. People are no longer ready to stand for hours in the lines for “deficiency”. They want to spend less time in the shop, but more on their own interests. Modern customers have become more educated. It is easy to find the information about a product in the Internet era. When a customer comes to buy the product, he is already well familiar with its characteristics and substitutes. He expects much more awareness from shop assistants and consultants. Distribution channels. Where did the retail trade move? In 2017, consumers made online 10.2% of all purchases, which is 2304 billion USD. The forecast is that this figure will more than double by 2021. Mobile phones are influencing shopper behavior inside and outside the store. Percentage of all global web pages served to mobile phones increased from 0.7% in 2009 to 52.2% in 2018. In addition, one-fifth of all online purchases in USA in 2017 was made via mobile. In addition, due to the widespread use of smartphones, the average level of customer attention span has dropped from 12 seconds in 2008 to 8 seconds in 2015. For example, buyers are more inclined to look into phones than on the product shelves, while waiting at the checkout. Now, business is struggling for the shopper attention with their smartphones. Even a special term has appeared ‒ “mobile blindness”. Some companies started placing advertisements on the sidewalks to make them easier to see for people who use smartphones while walking. German city of Augsburg has installed traffic lights on the sidewalks to protect such inattentive pedestrians. Business digitalization How should business operate in the modern environment? The only answer is to adapt. To make technologies your friend, not enemy, you need to think about its usage now. Perceive it as means of improvement, but not as a disruptive factor. Digitalization can apply to both internal and external business aspects. Internal ones include the product (or service) improvements, automation of production or other internal company’s processes. Technologies make it possible to process large amount of data thereby it simplifies and speeds up the work. For example, we use picture recognition for the analysis of the product placement on the shelf. Therefore, a sales representative does not need to enter information into a special program manually. He only needs to take a photo. The algorithm recognizes the product brand, its price, and sends information to an automated database. As a result, we save 30% of time per point of sale visit with data accuracy of 98%. External aspects include communication with partners and consumers. Modern technologies help to improve interaction and increase its quantity. It is nowadays reality that a chat bot informs partners about potential out-of-stock caused by holidays or other events in their cities, and reminds them to increase the order volume. Some of the bots even analyze weather conditions, if it can affect sales. This is relevant for seasonal products such as ice cream or refreshments. The future begins today Not quite right – the future began yesterday. And your competitors have already made first steps towards digital tools usage. Therefore, “now” is the right time to embark on a path of digitalization and upgrade your business. After all, it’s up to you choose to take a lead or stay behind.

Oleksandr Farkosh

Sales Director of JTI Ukraine, 16 years of experience in marketing and sales

Have you ever thought about how much the world has changed over the last 100 years? Let’s go back to 1918 for a while. People just realized what the gravitation is and we still do not know the DNA structure. The first computer will appear only 23 years later, a prototype of the Internet in 51 years and mobile phone – after 56 years. Do you imagine your life without these inventions? Meanwhile, progress goes on and technologies change the business environment every day.

Who is a modern customer?

The consumer’s profile is rapidly changing as well. Globally there are four key trends:

Urbanization. Urban population grew up rapidly from 751 million in 1950 to 4.2 billion in 2018. By 2050, 68% of the world’s population is expected to live in cities.
Aging population. The percentage of people aged 60+ will double by 2050 and reach 2 billion.
Households size drop. In India, for instance, average household size has fallen from 5.6 in 1990 to 4.5 in 2015. It will fall to 3.9 in 2020
Smartphonizing. In 2015, 25% of the world’s population used a smartphone. In 2018, this figure increased to 33%.

The modern shopper has become more demanding and dictates to the market his own terms. Now, business should predict, which need the consumer will have tomorrow, and prepare to meet it today.

The customer’s priorities have changed. He focuses on convenience and time saving. People are no longer ready to stand for hours in the lines for “deficiency”. They want to spend less time in the shop, but more on their own interests.

Modern customers have become more educated. It is easy to find the information about a product in the Internet era. When a customer comes to buy the product, he is already well familiar with its characteristics and substitutes. He expects much more awareness from shop assistants and consultants.

Distribution channels. Where did the retail trade move?

In 2017, consumers made online 10.2% of all purchases, which is 2304 billion USD. The forecast is that this figure will more than double by 2021.

Mobile phones are influencing shopper behavior inside and outside the store. Percentage of all global web pages served to mobile phones increased from 0.7% in 2009 to 52.2% in 2018. In addition, one-fifth of all online purchases in USA in 2017 was made via mobile.

In addition, due to the widespread use of smartphones, the average level of customer attention span has dropped from 12 seconds in 2008 to 8 seconds in 2015. For example, buyers are more inclined to look into phones than on the product shelves, while waiting at the checkout. Now, business is struggling for the shopper attention with their smartphones.

Even a special term has appeared ‒ “mobile blindness”. Some companies started placing advertisements on the sidewalks to make them easier to see for people who use smartphones while walking.

German city of Augsburg has installed traffic lights on the sidewalks to protect such inattentive pedestrians.

Business digitalization

How should business operate in the modern environment? The only answer is to adapt.

To make technologies your friend, not enemy, you need to think about its usage now. Perceive it as means of improvement, but not as a disruptive factor. Digitalization can apply to both internal and external business aspects.

Internal ones include the product (or service) improvements, automation of production or other internal company’s processes. Technologies make it possible to process large amount of data thereby it simplifies and speeds up the work. For example, we use picture recognition for the analysis of the product placement on the shelf. Therefore, a sales representative does not need to enter information into a special program manually. He only needs to take a photo. The algorithm recognizes the product brand, its price, and sends information to an automated database. As a result, we save 30% of time per point of sale visit with data accuracy of 98%.

External aspects include communication with partners and consumers. Modern technologies help to improve interaction and increase its quantity. It is nowadays reality that a chat bot informs partners about potential out-of-stock caused by holidays or other events in their cities, and reminds them to increase the order volume. Some of the bots even analyze weather conditions, if it can affect sales. This is relevant for seasonal products such as ice cream or refreshments.

The future begins today

Not quite right – the future began yesterday. And your competitors have already made first steps towards digital tools usage.

Therefore, “now” is the right time to embark on a path of digitalization and upgrade your business. After all, it’s up to you choose to take a lead or stay behind.