We’ve heard about digital transformation. We know that it has become imperative. In fact, we said in a previous article that businesses must be able to ride the waves of the continuous and fast-paced digital progress otherwise risk being eliminated. However, we also defined digital transformation, essentially, as integrating digital technology at the end-to-end of the business value chain, affecting changes in operations, company culture, and delivery of value to customers. Now, that last portion is worth noting. While we focused, then, on the challenges of having still so much to learn to take in all the opportunities of a complete transition to digital, the challenge of still being able to deliver value to customers－despite the gaps here and there in a digital divide－remains a top priority.
Towards a digital economy: transitions and revolutions
The business landscape has been through transitions, with dynamics developing and occurring alongside industrial revolutions. The ease of mass production thanks to the development of assembly lines and electrical energy in the second industrial revolution meant the availability of more products. From then on, it took a while, as though a really slow rise from an ebb and flow of tides, from being a (1) product-driven business landscape, to (2) being customer-centric, to (3) being human-centric. Such was the theme of the book, Marketing 3.0, published in 2010, “that the future of the marketing lies in creating products, services, and company cultures that embrace and reflect human values” (Marketing 4.0, 2017).
The path to digital transformation
Coincidentally, another industrial revolution was taking place: the rise of computers, automation, IT systems, and robotics. The world saw in the business landscape the paving of the pathway towards a digital economy. Crisscrossing along the path, if you will, are various ways of adopting new technologies. Some were eager to just stay on the path, committing to wherever it may take them. There were those who preferred an omnichannel approach. Some preferred a “sharing” economy. Some preferred just previews, augmenting their physical environment with a taste of a virtual reality.
Thus, in the paving of the pathway towards digital transformation, the lines have blurred. The traditional market segmentation became mixed, forming new groups, shaping new communities, and connecting subcultures. With this shift, businesses had to “adapt to the changing nature of customer paths in the digital economy.” In the “Marketing 4.0” transition, what happens, essentially, is “a deepening and a broadening of human-centric marketing to cover every aspect of the customer’s journey.” (Marketing 4.0)
AI, machine learning, Internet of Things. Some want to embrace all of these, some are skeptical, and some fear a dystopian takeover of a Cybermen-like future. So we hear about a “fourth industrial revolution,” autonomous decision-making of cyber-physical systems using machine learning through cloud technology. And then there is Web 3.0. But what does the landscape look like?
The gaps in the digital divide
Well, there is the coexistence and confusion of at least five generations developed from different sociocultural environments now living together. There is the aging economic powerhouse that is the Baby Boomers, the forgotten middle child Gen X, the Gen-“Why?” Generation Y, the first digital natives known as the Gen Z, and the more tech-savvy (also observed as more inclusive and social) children of the Millennials now referred to as Gen Alpha.
Across all these, economically, there is still an imbalance and inequality in wealth distribution: a polarization of the growing luxury market for the upper class and an expanding mass market at the bottom. Aside from the gap between income levels and related economic effects, there is also the gap and related geographical restrictions between the more economically developed countries having access to a wide variety of technology and the less economically developed who lack not only the technology but also the needed infrastructure. (See Digital Divide Council’s What is the Digital Divide?)
In other words, businesses, today, are facing at least three major challenges in the run-up towards digital transformation: the digital divide, generation gap, and prosperity polarization. To counter the trend of polarization, businesses might want to consider inclusivity and sustainability. For businesses to be sustainable, “growth plans must include a key element of societal development” (Marketing 5.0, 2021). However, they must also make sure that they are doing these authentically, especially since the generations Z and Alpha not only are still young to be on guard for a very long time but also they are the influencers of the other generations’ buying decisions. “And thanks to the Internet, companies are under constant scrutiny, and it is easier for customers to monitor the ethical aspects of businesses” (2021).
Universal connectivity to close the digital divide
As of mid-2021, UNDP reported that only around 60% of the world’s population is online. We still have to wait until 2030 for a 90% penetration, that is, the UN’s target for universal connectivity as illustrated through their digital cooperation roadmap.
Earlier, we observed the transitions and revolutions towards full digital transformation picking up speed. We observed the attitudes and adoption levels of businesses, the reception of the different generations and communities of consumers, and the challenges in the environment and the current terrain in the global digital roadmap. It seems, instead of moving fast towards an unknown, perhaps dreadful, dystopian future of digital transformation, all those technologies are still, basically, tools for our use. All advancements in technology are for the use, ease, and convenience of businesses, employees, customers, the general public－in a word: of humanity.
Takeaway: Technology to deliver value
As technology is for humanity, businesses can make use of new technologies as tools to be on the side of sustainability and inclusivity while being consistent in delivering value. Enhanced with the latest tools, businesses can make more informed decisions and predict outcomes of simulated strategies and tactics. They can make use, for example, of big data and intelligence amplification (IA), i.e., augmenting human intelligence with technology. Technology can also empower businesses to bring contextual digital experience to the physical space, facilitating a seamless omnichannel experience. In other words, high-tech but also high-touch. I.e., instead of an impersonal one-size-fits-all, augmenting customer-facing company representatives with the latest technologies to tailor their approach to provide a personalized treatment and deliver value. And, finally, speed－agility in executing operations at pace and scale.
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Guterres, A. “UN Secretary-General’s Roadmap for Digital Cooperation.” United Nations. June 2020.
Kotler, P., Kartajaya, H., and Setiawan, I. (2021). Marketing 5.0: Technology for Humanity. John Wiley & Sons, Inc.
Kotler, P., Kartajaya, H., and Setiawan, I. (2017). Marketing 4.0: Moving from Traditional to Digital. John Wiley & Sons, Inc.
Opp, R. “The evolving digital divide.” United Nations Development Programme. July 14, 2021.