In part 1 of our series on Digital Adaptation, we made the case for why it’s so important to scale digital infrastructure put in place during the pandemic. In part 2, we’re going to look at some of the most high-profile failed digital transformations and how an adaptation model can prevent you from making the same mistakes!
Four big failures
The pace of digital adaptation this past year has been faster than is comfortable. That’s a given. But this actually isn’t a new trend! Around 50% of digital transformation efforts in 2018 stalled to a stop. It’s obvious that, even without a pandemic driving change, some business leaders have a habit of getting ahead of themselves. Why is that? Let’s look at a few examples.
“Blockbuster Movie Pass” launched October 1, 2011. It was a disorganized bundle of Dish Network cable, a library of around 3,000 movies, and Blockbuster’s similarly late-to-the-party DVD delivery service. Clearly, this service was designed to compete with Netflix. It was rushed and, as we all now know, failed miserably. The major problem was that they still charged a rental fee per title instead of a flat subscription. While Blockbuster adapted their existing service to work in a digital space, they failed to transform the business model to give customers what they actually wanted – which was a feeling of unlimited choice, not Pay Per View.
Have you ever read about how innovative Dominoes is? It’s worth your time. Pizza Hut sensed that they were falling behind with an outdated dining room experience. They spent millions developing an app, online ordering capabilities, and a complex delivery infrastructure. In 2018, they had to admit to shareholders that after all that work they failed to put in place a marketing plan that actually let customers know about all this expensive innovation.
It just makes sense that the most recognizable sports brand in the world would be at the forefront of a new fitness revolution. In 2012, Nike launched its wearable fitness tracker, Nike+ Fuelband. It lasted only three years. The question with wearables has always been “what does a user get for doing all this tracking?” For Fitbit, the answer was reimbursements from your insurance or employer. For Nike+ Fuelband it was…Fuel Points. Don’t worry if you can’t figure out what a Fuel Point is, neither could their users.
There was a time when Kodak nearly made Instagram. In the early 2000s, the photo company created a service called Kodak Gallery that allowed you to store and share your photos online for free. Sadly, they were so blinded by an obsolete business model that they forced users to buy printed copies of their digital photos or they’d be deleted after 90 days. As part of their bankruptcy, Kodak sold the site to competitor Shutterfly in 2012.
Scaling your adaptations
What all of these examples have in common is a market pressure that demanded innovation, and a knee-jerk response to that pressure that failed to transform legacy business practices. COVID created incredible pressure to innovate, and if you’re still in business then you likely did. The problem facing you now is whether you’ll evolve those digital adaptations into something transformative.
A great example of digital adaptation in the wild is Airbnb. In April 2020 they launched Airbnb Online Experiences, which lets you book a hosted experience for everything from a coffee tasting class to hanging out with llamas. It was clearly designed to meet the immediate needs stemming from COVID-19 quarantines, but will the service continue and grow and transform into an integral part of the Airbnb experience? Signs point to yes, and you can bet we’re keeping an eye on this one.
Closer to home, we helped our clients at She Runs It bring their live events online. For now, the events tab on their site only has one option under it — virtual. Even when they do return to having in-person programming I doubt that virtual option will go away. It’s easy to imagine how integrating digital tools into live sessions, like chat and Q&A, might eventually transform how they run all of their events.
COVID-19 is showing us a new model for digital transformation. Instead of reacting to marketplace pressures with major overhauls that could miss the mark, we can instead imagine it as a series of smaller adaptations that, when iterated upon, can guide a tactical evolution. The perils of Nike and Kodak and so many others can be avoided. Digital partners like FATFREE take everything you’ve built during COVID-19 and work with you to piece it together into an ad hoc transformation strategy that meets the demands of the market and not just the demands of the moment.
Keep an eye out for part 3 where we’ll discuss what a step-by-step digital transformation looks like!