Electronics retailer JB Hi-Fi had a record financial H1 in 2017, seeing their profits increase 21%. However, just as the news of this achievement was being reported, something strange happened: people began selling off their shares.
Why would this happen? According to market commentators, it wasn’t because of JB Hi-Fi – it was because of Amazon’s impending launch into the Australian market. While Amazon’s arrival in late 2017 may not have had the huge impact many predicted, 2018 is a whole different story as they look to expand the number of distribution hubs and services they can offer to consumers.
For the people asking how JB Hi-Fi’s stock price could fall despite record profits, the answer was clear. The strategy that JB Hi-Fi (and its traditional competitors like Harvey Norman) continue to implement is based on making the most of the market in its current state. Amazon’s is based on shaping the market and predicting where it will go in the future.
To ensure you can get ahead, you have to think ahead.
In the current marketing landscape, having a short-term view of the world can leave a brand racing to catch up. If you visit a JB Hi-Fi store today, you’ll see far more items on discount than you would have in the past, and while this is great for the consumer, it isn’t a sustainable business practise for the company or its investors.
This is particularly true in the worlds of data, technology and innovation, where the right solution isn’t necessarily just around the corner, but rather a journey and mindset. Thinking about the next transaction rather than how you can build a bigger and better understanding of your consumers to execute against, leads to greater inefficiencies, a less personalised consumer experience and more work to do in the future. Playing catch-up as the market develops beyond your capability can be extremely tough.
To help ensure our clients are not caught in this, iProspect is launching a new framework. The Digital Maturity Index is our new way of measuring how well brands are set up today and for the future. Covering eight different business areas, each of which are ranked from transactional (data, tech and infrastructure for today) through to transformational (a capability to drive change through tech and innovation that will be relevant far into the future), identifying where progress needs to be made to help future-proof their setup.
How we measure a brand’s key digital capabilities.
The areas audited as part of the index start with understanding what detail can be derived from the brand’s business objectives, how they have set up their channel splits, and what flexibility is available. This then moves through to detailing the understanding a brand has about their customers and target segments.
In the second half, we move away from knowledge and concentrate more on the tracking, measurement and executional side. We start with how the brand executes against its segments, how it looks to improve the user’s experience throughout a journey, and how it measures marketing success. Only when we have visibility of all of these factors do we deliver an informed analysis on what ‘great’ looks like for each brand.
Starting today, but focusing on the future.
As part of our Future Focus roadshow, we talk about trends that will have an impact on the marketing landscape over the next 24 to 36 months. And whilst the “year of (insert here)” label will no doubt be thrown about again and again, we understand that 12 months has never been – and will never be – the lifetime of an innovation. Rather, the Digital Maturity Index is there to build a short, medium and long-term implementation plan to deliver benefits across a business’ marketing and consumer-facing functions.
The starting point is to understand where a brand sits within the index today. Combining this with the goals over the coming three to five years, we are able to pinpoint the key areas of focus that the business should take to make sure they are a set up to deliver a quality of execution long into the future.
With the world of data and technology becoming more complex on a daily basis, it is important for all brands to make continual improvements. iProspect’s Digital Maturity Index will make sure this is part of your business as usual rather than an afterthought, keeping your brand at the forefront of performance and innovation.
To discuss the Digital Maturity Index and what it may uncover for your business, get in touch with your iProspect representative.