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COVID-19 has jolted businesses around the world. For most businesses, being in a shutdown mode for an extended and unknown period of time has coerced them to reconsider their business models. Businesses that were reliant on offline channels suffered huge losses during the lockdown period and pushed many of them on the brink of extinction.
Going digital is the way forward in the post-COVID era and this blog shall highlight what it takes to create a digital business or digital company.
1. Digital mindset
According to a McKinsey report, we have jumped 5 years forward in consumer and business digital adoption in a span of 8 weeks.
More and more consumers are shifting to digital shopping. This is particularly evident since April 2020. Many previously apprehensive consumers are now opting for online purchases especially for essentials like grocery and medical items. This tectonic shift in the consumer mindset is going to give a major thrust to eCommerce.
The same phenomenon is also visible on the business front. In India, automobile companies like Tata Motors, Maruti Suzuki, Hyundai, Renault, Nisan, and MG Motor have intensified their online selling efforts. This is a never-before-seen trend. Patanjali Ayurveda has gone digital by announcing a partnership with eCommerce platforms like Amazon, Flipkart and others.
Clearly, the mindset of consumers and businesses is giving way to digital commerce.
The post-COVID-19 era up till now can be divided into three phases:
- The March Phase – when everyone was confused
- The April Phase- unprepared to go digital
- The May Phase- started the digital journey
A critical question to ask today is whether you are in the March phase, the April phase or the May phase.
Besides, there are two grave mistakes that entrepreneurs and businessmen who are new to the digital ways of doing business generally end up making.
Trial and error:
The first mistake to avoid in digital business development is the trial and error approach. Many think they can identify the routes to digital success through trial and error. Businesses may not get a second chance to prove their mettle in the digital world as the scope of competition here is fierce and wide. Trial and error approach could be time-consuming or even risky for business.
Treating digital as secondary:
Another common mistake that SME digital businesses make is treating their digital business as secondary. Going digital is foundational in many respects. Committing and investing the necessary time, money, and manpower skills are critical for building the foundation of a digital business ecosystem right.
According to Edward de Bono’s Six Thinking Hats, the green hat is for ideas. Today is the time that you don the green hat – to think out of the box and unleash your creativity to find ways to take your business online.
2. Digital strategy
Whether it is going to be a startup digital or an existing enterprise considering going digital, crafting the right digital strategy is the foremost thing to do.
A niche is something that differentiates you from your competitors; an area where you excel and stand out as a service/product provider. The right niche acts like a magnet – customers come to you instead of you going after them.
Finding your niche is one of the most important steps that you need take to achieve digital success because unlike in a traditional business where you get many opportunities to establish communication with your customers at various physical touchpoints, but in digital business, it is what you display on your website/app, digital marketing campaigns and activities on social media and search engines, etc. that will determine your brand positioning and uniqueness.
By establishing and effectively presenting your business niche, you will be able to attract the right audience in the digital platforms and drive up the conversion rate among your visitors. As a digital marketing solutions provider, we understand that many businesses do not focus on the role of the niche in their digital strategy.
There is a simple three-point checklist to identify your niche:
- The industry you are into (e.g. fashion)
- Business within your industry (e.g. T-shirts)
- The audience you wish to sell (e.g. teenagers)
Once you are clear about your niche, your digital strategy can be made more effective. You may also consider using the services of a digital business strategist here.
3. Digital sales
Creating a digital business is much more than building a website or an app or creating business pages on Facebook, Instagram, etc. or just getting listed on a marketplace platform. What you will need here is a holistic and systematic approach.
You will have to take a broader perspective of the sales channels to figure out the best options for your business. If you are a B2C product business, then your options are to start your own web/app and/or go through marketplace platforms like Amazon and Flipkart. Similarly, for B2B product businesses also there are various marketplace platforms like Amazon Business, Indiamart, Udaan, etc. If you are a service provider, you will find many marketplace platforms depending upon your services (OYO, Upwork, Naukri, Swiggy, etc.). For any digital business, the option of having your own sales channel (via website/app) is always there. A third option is to go for digital partnerships or vertical collaborations with non-competing partners.
But an important consideration at this juncture would be – what channel(s) should you pick?
Short-term Approach (Proof of Concept): You can start your digital journey through a marketplace platform to gain feedback and insights on digital sales and the performance of your products. This will help you gauge the waters if you are contemplating building your own sales channel.
Long-term Approach (Invest): Take this approach when your products have performed well in the online marketplaces. This is where you augment your digital strategy and build your digital sales channel.
4. Digital marketing
Before you start your digital marketing journey, the first question to ask is what type of marketing you are following. These are three popular types of marketing channels which businesses follow:
- Traditional – newspaper ads, radio ads, hoardings and pamphlets, etc.p
- Conventional – cold calling, on-field marketing, SMS marketing, etc.
- Digital – Social Media, SEO, and video marketing, etc.
The second question you should be asking is where your audience/customers are? As we all know today’s consumers are spending most of their time on smartphones and the internet. If a majority of your target audience is spending a significant chunk of their time on digital platforms or are constantly connected to digital platforms, then that is where you should be focusing your advertising and other promotional efforts.
Once it is clear that you should be focusing on digital marketing, the third pertinent question should be – how do you maximize your ROI from digital marketing? You will need to figure out the 5W’s to define your customer segment and narrow down the focus of your efforts to have cost-effective digital marketing on one hand and strive for better ROI on the other:
- Who is your audience?
- Where can you find them?
- What do they do?
- Why will they come to you?
- When will they buy it?
Once you have identified your target customers, then the next step is to engage them with your brand through good quality content. The content can be in the form of photos, videos, animations, illustrations, text, etc. In the ambit of digital marketing, you can use the following ways to reach out to your target audience:
- Social Media Marketing
- Affiliate Marketing
- Email, videos, etc.
5. Digital operations
Now comes the operations part. There are various aspects involved in operating a digital business. In other words, how the wheels of digital will work in your business. These digital operations will include:
- Website management
- Managing social media pages
- Content management
- Digital marketing campaigns
- Robust IT system (ERPs, CRM, order fulfilment, etc.)
- Logistic vendors (distribution, delivery, logistics, etc.)
If you choose to work with any marketplace platform, then a major part of your operations are addressed by them (like software/web/app and logistics). Working with marketplace platforms takes off a majority of the operational burden. But once a business decides to go with its own channel, these operations will have to be absorbed.
Today, we – as both customers and businesses are majorly drifting towards digital commerce. The on-going pandemic situation has only hastened this process. So, as businessmen, we cannot afford to ignore this digital embrace as something secondary in business. From strategy to operations, we must know what it takes to have a good digital business architecture.