5 successful digital transformation examples

It’s hard to stay afloat in today’s digital-driven business world - not to mention thrive in it – without leaning into technologies. Every day, hundreds of companies decide to take the route of digital transformation. They go for it to keep meeting their customers’ needs and keep ahead of the competition.

In this article, we go into what a digital transformation entails and share a few examples of companies that successfully underwent it.

But first things first – let’s start with the basics.

What is a digital transformation?

Digital transformation means putting digital technologies into action to change the way a business operates and how it delivers value to customers. It’s a thorough change across all areas of the company.

Here are 4 crucial elements of a digital transformation:

1. Data
2. Customers
3. Technologies
4. Changes within the company

Adding some new tech isn’t enough to make for a successful digital transformation. 

It has to come with insights from data, focus on customers and adjustments in the company culture and processes. You also have to make sure you have people with the right skills on board – whether that means new hires or helping your current employees skill up.

If – or rather, when – you decide it’s time to take your company through a digital transformation, it will be a good idea to bring experienced partners on board with you to help you out.

Why do businesses go through a digital transformation?

Because it’s a must in the digital era. 

If you’re wondering whether your organization should take that huge leap, consider the cost of not doing so. If your customers are online… Will you be able to keep operating in a year? How about two years? Or three? You should accommodate your customers’ needs, and most people are online every day.

Benefits of a digital transformation

When it comes to its many benefits, a digital transformation helps companies to:

• continuously bring value to customers as their needs keep evolving
• stay ahead of the competition
• improve their business models
• better analyze and leverage data
• increase innovation across the company
• save cost and boosts revenue
• create a better work experience for employees
• boost the skillsets within the organization
• scale onboarding and training easier

Examples of successful digital transformations

Here are 5 examples of companies that underwent a successful digital transformation:

Shopping for home redesigned: IKEA

IKEA has been operating as a physical business for about eight decades. When they decided it was time for a digital transformation, they faced a challenge probably every company of their size would see: how to carry it out and keep the business true to what it was. They needed to make sure the transformation strategy included absolutely every part of the organization – from supplies to delivery.

Knowing it’s an endeavor that has to happen across the whole company, they were able to do it by simplifying their IT architecture, building a map of connections between the physical and digital touchpoints of their customers, and pushing the digital transformation within the organization as well as to external partners.

Among other areas, they focused on:

developing their e-commerce. They didn’t switch to online stores but rather connected the experiences of visiting your nearest IKEA and hopping to do some browsing online;

using a new business model. To better manage online sales, they started using their physical stores also as fulfillment centers – and all that was made possible by special algorithms;

making the customer experience seamless, merging the physical with the digital. With that change, you can now design your kitchen on their website and visit a store at a later, convenient time.

This strategy made the digital transformation work – so much so that about 80% of customers start their adventure with IKEA online in one way or another. Talk about a successful transformation!

Focusing on data: Nike

A few years back Nike realized they were getting less distinctive among numerous other spots brands. They need to strengthen their brand image and improve customer experience.

They doubled down on analyzing their customers' online behavior. The goals they were aiming at were innovating faster, bringing up their speed to market and doubling the number of connection points with customers.

They also reworked their membership options and improved the UX to better match customer needs.

Throughout the whole process of digital transformation, they kept their two main objectives in mind: improving customer experience and strengthening branding. If a giant like Nike was able to pull that off, so can you. Just do it.

Stirring up banking: Hanseatic Bank

Another example of a successful digital transformation is the German Hanseatic Bank.

They wanted to make it possible to introduce new business models, as well as improve their time-to-market. They knew that when carrying out a digital transformation, it’s extremely important to keep all the data secure – even more so in the case of a bank that’s often on the radar of scammers and fraudsters.

To go through the transformation and keep the data secure – while operating as usual at the time it was happening – they used the Open Banking API based on the WSO2 Open Banking technology stack.

Pushed by circumstances: DHL

The pandemic pushed tons of businesses toward the digital world - whether that meant charting a completely new territory or expanding. DHL was one of them, and they needed to adapt fast. 

DHL based their digital transformation strategy on artificial intelligence and machine learning. They’ve built an Advanced Quality Control Center - that’s where all the deliveries, shipments and any issues are analyzed to make predictions. The use of AI and machine learning means the AQCC is continuously improving on itself.

DHL also made sure to improve the customer experience with tech: the customers were able to track where their package is, schedule when exactly they would like it delivered and return a parcel with a QR code to minimize physical touch - which was a must during the COVID-19 pandemic.

Creating a personalized user experience: Sephora

The beauty brand Sephora saw the need to connect the physical world of their customers with the digital one. They turned one of their warehouses into a digital transformation hub, where they worked on bringing the two together in a seamless experience that the customers would love.

But they didn’t stop there. They also created new offers such as:

the Visual Artist app – it allows you to try makeup on by means of AR (augmented reality) before you buy it, so you can decide whether you like it

Sephora Flash – to make shipping faster (and free)

the Pocket Contour app – which analyzes users’ face features and suggests contouring tutorials based on that data

They also added AI-driven chatbots that can help you find and buy the products you’ve tested with the Visual Artist app, as well as to book appointments.

1 key takeaway

If there’s one thing we want you to take away from this article, is that a digital transformation won’t be successful if you’re not putting the customer in the spotlight. That’s right – the customer-centric approach is the way to go.

And if we may sneak in a second takeaway… It’s data. Make sure your team has the necessary customer data to take the company through the transformation.

To wrap it up

For many businesses digital transformation is becoming a matter of “when should we do it?” rather than “should we do it at all?”. 

Tapping into the latest technology, focusing on data and automation can greatly improve the experience customers have with your company, boosting the efficiency of your organization and giving you a leg up on the competitors. 

And from what we observe, it seems we’re only going to dive deeper into the digital era. Businesses that don’t try to realize the potential of digital transformation will – most probably – be left behind.

FAQ

Q1: What is a digital transformation? A1: Digital transformation is the integration of digital technologies into all areas of a business, fundamentally changing how it operates and delivers value to customers. It's a comprehensive change that encompasses data, customers, technologies, and internal changes within the company.

Q2: Why do businesses undergo digital transformation? A2: Businesses undergo digital transformation to stay competitive in the digital era. By adapting to customer needs and incorporating digital technologies, businesses can better meet evolving customer demands, streamline operations, improve business models, enhance data analysis, foster innovation, and more.

Q3: What are some successful digital transformation examples? A3: There are numerous successful digital transformation examples. For instance, IKEA has integrated digital technologies to enhance their e-commerce capabilities, optimize their supply chain and delivery, and improve the customer experience. Similarly, Nike and Sephora have focused on data and personalization to deliver better customer experiences.

Q4: How did IKEA carry out their digital transformation? A4: IKEA carried out their digital transformation by simplifying their IT architecture, developing a map of customer touchpoints (both physical and digital), and focusing on areas such as e-commerce and customer experience. They also adopted new business models, using physical stores as fulfillment centers, made possible by special algorithms.

Q5: What was the focus of Nike's digital transformation? A5: Nike focused on analyzing their customers' online behavior to improve customer experience and strengthen their brand image. This allowed them to innovate faster, improve speed to market, and increase the number of connection points with customers. They also enhanced their membership options and improved user experience.

Q6: How did Hanseatic Bank handle digital transformation? A6: Hanseatic Bank went through digital transformation to introduce new business models and improve their time-to-market. They used the Open Banking API based on the WSO2 Open Banking technology stack, ensuring data security throughout the transformation process.

Q7: How did DHL utilize artificial intelligence and machine learning in their digital transformation? A7: DHL built an Advanced Quality Control Center as part of their digital transformation strategy, leveraging artificial intelligence and machine learning. This center analyzes all deliveries, shipments, and issues to make predictive analyses and continuously improve operations.

Q8: What innovative measures did Sephora take in their digital transformation journey? A8: Sephora connected their physical and digital customer experiences and developed new offerings such as the Visual Artist app and Sephora Flash. They also utilized AI-driven chatbots for product recommendation and appointment bookings, enhancing the personalized user experience.

Q9: What are the benefits of digital transformation? A9: Digital transformation can offer numerous benefits including continuous adaptation to evolving customer needs, staying ahead of the competition, improving business models, enhancing data analysis, fostering company-wide innovation, cost-saving, revenue boosting, and creating a better work experience for employees.

Q10: What are the key elements of a successful digital transformation? A10: Successful digital transformation includes the integration of new technologies, data-driven insights, focus on customers, and changes in company culture and processes. Moreover, it involves having skilled personnel onboard to drive the transformation.

Q11: What role does data play in digital transformation? A11: Data plays a critical role in digital transformation. Data-driven insights can help businesses better understand customer needs, improve operational efficiency, foster innovation, and make strategic decisions.

Q12: What is the importance of customer-centricity in digital transformation? A12: Customer-centricity is crucial in digital transformation as it ensures that changes made align with the evolving needs and preferences of customers. A customer-centric approach can lead to improved customer experiences, loyalty, and ultimately, business success.

Q13: What sectors have seen successful digital transformations? A13: Many sectors, including retail, sports, banking, logistics, and beauty, have seen successful digital transformations. Companies like IKEA, Nike, Hanseatic Bank, DHL, and Sephora have transformed their businesses by leveraging digital technologies.

Q14: How can digital transformation provide a competitive edge? A14: Digital transformation can provide a competitive edge by helping businesses meet changing customer needs, improve operational efficiency, innovate quickly, make data-driven decisions, and stay ahead of industry trends. It can also open new avenues for growth and expansion.

Q15: What happens to businesses that do not embrace digital transformation? A15: Businesses that do not embrace digital transformation risk becoming irrelevant or less competitive in today's digital world. They may struggle to meet evolving customer expectations, adapt to new business models, and keep up with industry trends, potentially resulting in decreased profitability and market share.