[MUSIC] This video's about the digital transformation, the internet, the whole way the world's been changing. And with the view and experiences, now I was the director, or the founding director, of the E-Business program at MIT back in the late 1990s. My timing was of course impeccable, just before the dot.com bubble exploded. But what was interesting to note at that time we really thought of the Internet as the big Disintermediators. So we took out sort of channel members, we took out the human contact if you will. Even products that we could physically, or services that we had encountered such as our tax services they became digital through things like TurboTax. That journey was accelerated. It became an easy price comparison engine. So there were predictions made that basically the internet is going to be this vast digital commodity pit. And it would be the greatest force. Of shifting value creation from experience and effectiveness to efficiency. But that's not really happened. Now, of course efficiency is a great benefit. So if you think about some data show if I have a transaction which is face-to-face, the cost to the organization might be upwards even of ten pounds. A telephone interaction might be less expensive, it's somewhere in the middle, maybe three to six pounds, maybe around five pounds. And a digital interaction, often self-service, we're talking about pennies. Less than ten pennies. So, there's a vast a vast difference in cost between physical and digital experiences which has really kind of re-emphasized that efficiency focus. And taken companies away from thinking about experiences yet as we see digital data and digital opportunities of course exactly the opposite has happened. What has not happened as much, at least not for all companies, is to think about not just the journey as being one that's convenient, smooth, easy to understand and intuitive. Which is kind of a generic way to make experiences that are digital and valuable. But to really think about, how do we think about digital and the internet as part of the expression of our brand. Are there aspects of this journey which might be destroying the brand? Or are there ones we can actually use the digital aspects to enhance our brand is part of that journey. So if you think about how do I create a branded experience? Let's go to Nespresso and their business model is not just about making high-end coffee machines. But it's that whole club experience, where you're a member of a club. And you get to have coffee advice on the telephone for example, and they spent a lot of money and they hired the right kind of people to deliver that experience. As a matter of fact, they're part of Nestle and they really couldn't survive and built that luxury coffee culture in their Nestle headquarters. They created their own space, which was much more luxurious, wood paneled walls, etc.. So they could have an authentic luxury experience over the telephone with their club members, their customers. Now when the Internet came along, this really fed into Nespresso's business model, they could enrich the experience even further. So as a customer you can now come and you can really learn about the coffee in ways where you might not be so embarrassed to talk somebody about coffee. They can provide a much richer interaction. They can show you where the beans came from, the way the beans are made through video and other sources. So just learning about the coffee became richer. They also learned a lot more about you. What are the variants you looked at, they could update you in unobtrusive ways. Remind you of maybe when to order the coffee. They could invest in events like they invest in the ocean racing and really amplify that investment by sharing that online. They could engage their customers. They have done things like your best golf shop for example. They are high end customers many of them are golfers that really provided a grand experience. And when it moved onto the mobile platform they're in for quit a surprise, because it's a massive investment for an espresso to go there. And they reached their sales targets far, far quicker, than they ever anticipated. Because of course, if you think about it, if I open my drawer in the morning and I realize I'm running low on espresso. It's much easier to grab my phone, to order it right then and there than to maybe go and boot up my computer and to follow the process to call, express on themselves. So, they're always trying to enhance the experience, they've also invested in boutiques and put technology in the boutiques as well but, the intent really fed into their business model. And I've given you a couple of other examples, the Nike fuel band, the Disney magic band, the Lamborghini accessory. All of those things enhance the customer experience around what the brand actually tries to deliver, around the brand purpose if you will. Now it doesn’t look like branding like a logo would, but these are digital experiences that add up in a consistent way to deliver on the brand promise. Another brand I'd mentioned in the first module was Burberry. Now Burberry was a brand that fell on hard times because of of course their brand in a sense was hijacked. By a certain group of customers that were not luxury customers there, the chavs. But part of that turnaround, they were quite bold. They didn't go after the traditional luxury customer, they went after millennials, those born around the millennium. And these customers are digerati. They're natural in the digital environment. So the digital experience became core to Burberry. Not just their web space, their web presence, but if you go to their flagship store here in Regent street in London. The idea was to create a retail environment where you're literally walking into a website, a living and breathing website. And they have certain aspects which you might think are kind of gimmicky, but they might have a radio frequency ID so, RFID tags on some of their products like their bags. And you could hold up to this magic mirror, and the mirror would then play a video which showed you the craftsmanship. That goes into making the bag, which of course is really poor to luxury products, the whole heritage, the craftsmanship, the stories that go into this beautiful piece of leather. It's worth a lot more when you understand what stands behind it. So that's really using digital to deliver on brand. They could also take the runways shows in Paris, and show them on this huge giant digital scene they have in this flagship store. And have events around this, which of course are on brand as well. But it really goes deeper, it's not just a marketing device, because digital becomes part of the customer experience. If you go into a store, their sales staff is equipped with iPads or phones which link into the whole operational processes in terms of ordering devices. I was with a colleague who was visiting from Mexico and he wanted to buy his wife something and he says, I'm not so sure, does the store in Mexico have it? And the sales associate was able to go online and say well they actually they do carry this line they do have it in your wife's size. Well he decided to buy it anyway on site. When the sales person did it, send the message to the associate in Mexico and said hey this customer has just bought it here. They're really one of your customers. If they really want to exchange it, etc., etc.. They could treat the customer in different ways. So that's really about the digital being core to the brand and feeding it to every aspect of the organization. [MUSIC]
