Many businesses have boosted digital sales in the pandemic, but it will take a new commitment to speed to keep up with the digital leaders.
In mid-2020, the CEO of a Fortune 500 company was looking at the spike in the business’s digital sales and the remarkable speed of its growth.
He was pleasantly surprised by how well the digital side of the business had performed, and he complimented his digital leaders. Secure that the digital business was doing well, he turned his attention quickly to the next agenda item.
What this CEO failed to appreciate was that the improvements in digital sales had almost nothing to do with what the company had done and almost everything to do with the realities of life during the pandemic, when people were flocking to digital channels. Rather than invest more in digital capabilities or rethink his business’s strategy, he took its good fortune as validation of its existing digital posture and “business as usual.”
He is not alone. While many are justifiably proud of their enormous accomplishments during the pandemic, we have found that a false sense of their digital capabilities has settled on many companies. Digital traffic and commerce made huge leaps for almost every institution, no matter how good their digital capabilities were—so much so that laggards were able to make up some lost ground on digital leaders.
While market-leading pure plays have grown fast during COVID-19, due to capacity restraints, they have been outpaced in digital growth by Best Buy, AEON, and Tesco, respectively.1 Tellingly, according to McKinsey research, customer satisfaction scores have grown faster at traditional retailers that have stepped up.
While many digital habits are sticking, the easing of constraints where COVID has abated has led, as expected, to a return to some non-digital habits. A recent McKinsey survey suggests that while industries across countries and regions experienced an average of 20 percent growth in “fully digital” users in the six months ending April 2021, the acceleration into digital channels now seems to be leveling off in both the United States and Europe.
Can Companies Build On Their Digital Surge?
This development is likely to lead many beneficiaries of the digital surge to find themselves struggling to build on their digital wins because the slowing pace of digital adoption masks two more fundamental realities: digital is here to stay for many new customers, and the pace of change is continuing to accelerate.
Digital leaders, meanwhile, are keeping their foot on the accelerator pedal. While top economic performers are already significantly ahead of their peers in specific digital capabilities (automation, for example), they are also moving much more quickly than their peers in key business areas.
Top tech companies, for example, share test-and-learn findings across the business, reallocate digital talent, and use multiple sources of insight about customers weekly, while average performers do those tasks monthly.2
These developments underscore the importance of speed as the cornerstone of digital success, as we wrote in Fast Times. In our book, we covered 18 areas where businesses can build transformative speed into their organizations.
For this article, we highlight four of those areas that executives have continually highlighted in our conversations as having acquired particular importance during the crisis: strategy, talent, data, and technology.