7 Examples Of How Digital Transformation Impacted Business Performance (2023)

Digital transformation involves more than just updating technology and processes; it also involves revenue and shareholders. Many companies are hesitant to invest in digital transformation without knowing if the investment will pay off. However, when done strategically, digital transformation can improve stock prices and revenue in the long run. These seven major companies show that changes might not occur overnight, but investing in digital transformation can make a large financial impact over time.

7 Years At Best Buy

Seven years ago, most people thought Best Buy was dead. Even people within the company didn’t believe it could survive against Amazon. But a new CEO and a fresh digital perspective transformed the electronics store from a place to buy CDs to a digital leader in technology. Instead of just selling products, the brand aims to enrich people’s lives with technology.

MORE FOR YOU

Patrick Byrne Of Overstock Fame Says He Was Involved In Monthslong Effort To Overturn 2020 Election
The Best New Movies And Shows On Netflix Today: October 22, 2022
(Video) Digital Transformation | What is Digital Transformation | Digital Transformation 2021 | Simplilearn

To make that happen, Best Buy made major efforts to improve its delivery times. It introduced a price matching program and switched its focus to advising customers, not just selling to them. Best Buy employees offer in-home consultations on how customers can best use their devices, and the Geek Squad will now fix anything in a customer’s home for a flat annual fee.

Best Buy also transitioned from predominately mail marketing to an almost entirely digital strategy. It uses data to create customer profiles to provide customized recommendations and assistance.

Best Buy’s digital transformation hasn’t been without hiccups, but the results are starting to show. Best Buy started 2012 with a stock price of $23.70. As of July 2019, it sells for around $74. Early growth was rather slow, but prices have been steadily increasing over the last three years. Revenue actually decreased over that same timeframe, but has increased steadily in the last three years, jumping from around $40 billion late 2017 to its current $43 billion.

8 Years At Target

Target outsourced its web presence which they saw as ancillary in 2004, to Amazon. But in 2011 Target saw the writing on the wall and decided to take back its digital presence from Amazon and focus on it as a main piece of business. Target has been investing in its stores to create a new, remodeled design that blurs the line between e-commerce and physical stores. More than 400 stores have been remodeled and equipped with new technology in the last two years and have introduced online ordering and in-store pickup and curbside grocery pickup services. Many new aspects of the store follow the D2C model by selling exclusive items at pop-ups from popular brands. Target has also made strides with a consistently engaging social media presence that allows customers to discover new products and even buy them directly through social media.

(Video) Business impact of digital transformation

The ongoing effort to build a more holistic digital strategy allows for deeper customization. And it’s clearly paying off. Target has been seeing steady growth since its lowest point in 2006. Target stocks started 2017 around $73 per share and dropped down to around $53 when the initiatives ramped in the middle of the year, but now currently trade around $88, with growth holding steady in that period. Over the last two years, Target’s revenue has increased from around $70 billion to $76 billion. And it’s not done yet: Target plans to remodel another 600 stores by 2020, at a cost of $7 billion.

7 Years At Hasbro

At Hasbro, digital transformation is child’s play. The toy and game company made big investments in its digital and data strategies that paid off in a big way. In late 2012, Hasbro realized that instead of focusing on children, it really should be marketing to their parents, who are the people who actually make the purchases. The company leveraged data to create targeted marketing campaigns on multiple channels, including a larger push on social media. The data helped the company better understand its customers and recommend relevant toys and games to parents. Using data also helped Hasbro create a frictionless experience as it better understood customers and could proactively meet their needs.

Hasbro also harnessed the power of digital storytelling through social media and video content. It combined nostalgic brands with forward-thinking channels to connect with customers. Omnichannel marketing kept the products front of customers’ minds for improved relationships with the brand.

The transformation didn’t come cheap. Hasbro increased its ad spend by 1100%, but was able to increase sales by $1 billion. In 2016, it hit $5 billion in sales for the first time. In 2013, Hasbro stock sold for $36; today, it sells for $109. The growth was disrupted by industry changes and volatility, but the focus on digital marketing and data has helped Hasbro weather the storm.

2 Years At Home Depot

Once just a hardware store, The Home Depot today has a robust data and IT department to fuel its ongoing digital transformation. In late 2017, the company said it would invest more than $11 billion over the next three years to improve and combine its physical and online shopping experiences. It also set out to hire 1,000 IT and user experience professionals. Instead of searching up and down dusty aisles, Home Depot is moving towards contractors and DIYers shopping online and picking up in store. The goal is to create a seamless experience across channels and to provide the best products and resources to customers. The investment has helped build up the back-end and distribution channels.

Home Depot has also improved its use of data to better understand customers. By tracking local trends, it can ensure the right items are in stock without losing money on excess inventory. It also added visual and voice search to its app to give customers more options. Instead of being overwhelmed by products, customers can easily find the right items and get help knowing how to make home repairs or complete a project.

(Video) Top 10 Change Impacts During Digital Transformation [Change Management Strategies and Tactics]

The blurring between online and in store is working. Home Depot’s stock has improved from $135 in early 2017 to $215 today. In the same time, revenue has grown from $93.3 billion to nearly $110 billion.

5 Years At Microsoft

Microsoft has long been known for its top products, Windows and Office suite. But lagging stock prices and increased competition from companies like Apple and Amazon led the company to re-think its strategy and create a more forward-focused cloud business.

When CEO Satya Nadella took over in 2014, the company began a shift towards its cloud networking systems. It moved the focus away from traditional software to a more fluid cloud system for both personal and enterprise use. Instead of shying away from partnerships like it had in the past, Microsoft changed course to build relationships with other software and technology companies. Public view also changed, as Microsoft went from being seen as an outdated or stagnant company to a forward-thinking cloud solution. As it proves itself with more deals and growth, Microsoft’s star continues to rise.

In early 2014, right before Microsoft’s transformation began, stocks were selling around $38 per share. Today, they’re worth around $136. Over that same period, revenue increased from $93.5 billion to $122 billion In 2019, Microsoft became just the third company to get a $1 trillion market cap, notably before its competitor Google. That accomplishment wasn’t even fathomable just a few years ago.

2 Years At Nike

Although a staple in shoes and athletic clothing, Nike started looking sluggish and outdate a few years ago. The company switched its mindset and underwent an ongoing digital transformation to reinvent its brand and supply chain.

Instead of going through middlemen, Nike improved its connection with customers through membership opportunities, stronger digital marketing and powerful data analytics. Instead of selling through other vendors, Nike started selling more directly to customers and partnered with Amazon for an updated e-commerce strategy. An end-to-end focus on consumer data better allows Nike to connect with customers and recommend the right products. It also opened concept stores and improved its online and app experience.

(Video) 7 Pillars of a Successful Digital Transformation

The improved digital focus gives Nike a faster product development cycle, which allows it to get new products to market quickly, respond to and set trends and control how many items are produced. A large part of Nike’s brand is the scarcity of some of its shoes and the coolness factor that creates.

Nike’s digital transformation is ongoing as it pushes for innovative ways to connect with customers and get a leg up on the competition. At the beginning of 2017, its stock price was $52; it’s now up to nearly $88. In that same time, revenue increased from $33.5 billion to $39.1 billion.

3 Years At Honeywell

As it aims to help other companies with their own digital transformations, Honeywell also made major changes in itself. A few years ago, it streamlined many of its industrial end markets by cutting them down from eight to six. The goal was to focus on quality over quantity and leveraging digital solutions. Honeywell uses data to determine the best spinoffs and movements for its company.

Along with its own digital transformation, Honeywell uses data to help its customers. In 2016 Honeywell started its own internal digital transformation group. It introduced new technologies, including more IoT-connected and data-centric devices and offerings. As it reinvents industrial process control and offers more technology solutions for its customers, Honeywell also shows off its renewed focus on customer data and internal solutions. Streamlining internal processes and digitizing as much as possible allows the company to build quality relationships and products.

Since its renewed effort began about four years ago, Honeywell’s stock has increased from $95 per share to $174. Its revenue grew from $40.3 billion to a peak of nearly $43 billion in mid-2018, but it has since dropped back to $38.6 billion. Digital transformation is an ongoing process.

A commitment to digital transformation and the resources to back it up can turn lagging stocks into industry leaders. Although there are risks involved, these companies show that finding digital solutions and processes can lead to long-term financial gains.

Blake Morgan is a customer experience futurist, keynote speaker and the author of two books including The Customer Of The Future. Sign up for her newsletter here.

(Video) 7 Ways To Scale Your Business Through Digital Transformation | The Great IT Professional

A commitment to digital transformation and the resources to back it up can turn lagging stocks into industry leaders. Although there are risks involved, these companies show that finding digital solutions and processes can lead to long-term financial gains.

FAQs

What is the impact of digital transformation on each business? ›

Digital transformation creates a system for gathering the right data and incorporating it fully for business intelligence at a higher level. It creates a way that different functional units within an organization can translate raw data into insights across various touchpoints.

What are some real examples of digital transformation? ›

Examples of digital transformation are:
  • Transitioning into a remote-first workspace.
  • Using design thinking to analyze and optimize the customer journey.
  • Implementing automated customer service.
  • Using AI-driven insights to improve sales efficiency.
  • Automating employee performance management.
29 Apr 2022

What are the 3 benefits of digital transformation? ›

The Benefits of Digital Transformation
  • Increases Customer Satisfaction. ...
  • Drives Data-Based Insights. ...
  • Enables Software Monetization. ...
  • Enables High-Quality User Experience. ...
  • Encourages Collaboration & Improves Communication. ...
  • Increases Agility. ...
  • Limits Human Error. ...
  • Encourages an Environment of Employee Excellence.

How do you explain digitalization contribute to company performance? ›

Digitalization in business helps to improve the efficiency of its operations, making automation possible. There are fewer human errors and operational costs are reduced, due to the decreased need for human resources.

What are digital Solutions examples? ›

The 7 Digital Business Solutions Every Company Needs
  • Project Management. ...
  • Team Communication. ...
  • Email Marketing. ...
  • Social Media Management. ...
  • Human Resources Management Software. ...
  • Accounting Software. ...
  • Procurement Software.

What is digitalization explain with examples? ›

Digitization refers to creating a digital representation of physical objects or attributes. For instance, we scan a paper document and save it as a digital document (e.g., PDF). In other words, digitization is about converting something non-digital into a digital representation or artifact.

Which are the 5 core areas that are impacting marketing transformation? ›

Analysis of your current situation means identifying the existing status of the five key elements that are integral to any technology-driven marketing transformation project: process, people, data, technology and culture.

What are the opportunities and challenges in digital business? ›

What Are the Biggest Digital Transformation Challenges Organizations Face?
  • Lack of Change Management Strategy.
  • Complex Software & Technology.
  • Driving Adoption of New Tools & Processes.
  • Continuous Evolution of Customer Needs.
  • Lack of a Digital Transformation Strategy.
  • Lack of Proper IT Skills.
  • Security Concerns.
2 Dec 2021

What is the key to successful digital transformation? ›

Inspire a change in culture through leadership

The GetSmarter survey finds that the two most crucial ingredients for digital transformation success are strong leadership and effective change management.

What are the key points and success factors in digital transformation strategies? ›

4 Key Factors In Digital Transformation Success​
  • Technology. Have digital-savvy leaders. Invest in digital talents. Upgrade your technology.
  • Data.
  • Process.
  • Organizational change capability. Culture Change. Communication.
  • Summary.

What is the main benefit of digital business? ›

One of the great benefits of going digital is the ability to track metrics and analyze the data that is gained during digital marketing efforts. Using these insights allows businesses to optimize their strategies and processes for even better results. In businesses, only two things really matter - costs and revenue.

What is the impact of digital transformation? ›

Technology paired with an effective business transformation strategy and skilled employees can help: Improve business agility and your response to market changes. Increase team collaboration through effective communication technologies. Achieve higher productivity levels by introducing AI and automation.

How does digital transformation increase efficiency? ›

In the context of digital transformation, efficiency is measured in terms of digitization and automation, both of which can save significant amounts of time by allowing workers to focus on higher-value tasks.

Why is digital transformation essential for business growth? ›

Digital transformation is essential for business growth because it helps organizations keep up with the latest technology trends, reach new markets, and improve operational efficiency.

Why is digitization important for business growth? ›

Digitalization of business helps to improve the efficiency of its process, consistency, and quality. It can: Integrate conventional records or files into a digitalized form, eliminating redundancies and shortening of communications chain. Improve and facilitate a better informational exchange.

What does digital transformation mean for business? ›

Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.

What is digital transformation in the business environment? ›

Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.

What are the impacts of digitization on the international business strategic management process? ›

Changes brought in by digitalization

On the one hand, the key external digital trends includes the pervasive connectivity, the information abundance, the global supply chains, the improved price/performance of IT, the growth of cloud computing, and the emergence of big data.

How is digital transformation reshaping businesses? ›

Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It's also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.

What are the 4 types of digital transformation? ›

5 Types of Digital Transformation
  • Business Process Transformation. Business process innovation changes the way companies work internally. ...
  • Business Model Transformation. ...
  • Domain Transformation. ...
  • Cultural Transformation. ...
  • Cloud Transformation.
16 Jun 2022

Does digital transformation help us in business? ›

Digital transformation puts technology at the core of business strategy. This approach can reduce operating expenses and inefficiency. It could even change the course of your business. With a unified model across business and technology, it's easier to achieve future ambitions.

Why is digital transformation essential for business growth? ›

Digital transformation is essential for business growth because it helps organizations keep up with the latest technology trends, reach new markets, and improve operational efficiency.

What is the impact of digital transformation? ›

Technology paired with an effective business transformation strategy and skilled employees can help: Improve business agility and your response to market changes. Increase team collaboration through effective communication technologies. Achieve higher productivity levels by introducing AI and automation.

What are the positive effects of digitalization? ›

There are various advantages to digitalization including increased efficiency, increased productivity, lower operational costs, improved customer experience, higher agility, enhanced employee morale, improved communication, increased transparency, improved competitive advantage, and faster decision making.

What is the role of digital technologies and innovation in modern business? ›

At its core, digital innovation is the practice of implementing modern digital technology to solve business problems by optimizing processes, improving customer experiences, and delivering new business models. Wearable devices, chatbots, IoT, AI, big data, etc.

What is digital strategy example? ›

These include artificial intelligence (AI), machine learning (ML), robotics, data analytics, and the Internet of Things (IoT). As these technologies dramatically reshape industries, many companies are pursuing large-scale change efforts to capture the benefits of these trends or simply to keep up with competitors.

Why are digital options important with business models? ›

Most importantly, digital business models employ and rely on technologies that not only deliver better products and services but also provide personalized and meaningful customer experiences. A digital strategy is critical to your brand's success.

What are the three 3 main components of digital transformation? ›

The three major building blocks with which companies are digitally transforming customer experience are customer understanding, top-line growth and customer touch points.
  • Customer Understanding. ...
  • Top-Line Growth. ...
  • Customer Touch Points. ...
  • Process Digitization. ...
  • Worker Enablement. ...
  • Performance Management.

What is digital transformation in simple words? ›

Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.

What is digital innovation example? ›

Any new technology can be considered a digital innovation – from big data, wearable devices, AR/VR, conversational chatbots, mobile apps, and so forth.

Videos

1. Top Digital Transformation KPIs and Performance Measures [How to Measure Transformation Results]
(Eric Kimberling - Digital Transformation)
2. Digital Transformation After the Pandemic
(MITSMR)
3. How Digital Transformation Impacts Asset Management
(AMS Reliability)
4. Digital Transformation Strategy
(Ionology)
5. Digital transformation Improving supply chain performance with inventory optimisation
(EazyStock - Inventory Optimization Solution)
6. 7 Major CRM Trends to Accelerate Digital Transformation in the Insurance Industry | Creatio
(Creatio)
Top Articles
Latest Posts
Article information

Author: Kareem Mueller DO

Last Updated: 01/16/2023

Views: 5935

Rating: 4.6 / 5 (66 voted)

Reviews: 81% of readers found this page helpful

Author information

Name: Kareem Mueller DO

Birthday: 1997-01-04

Address: Apt. 156 12935 Runolfsdottir Mission, Greenfort, MN 74384-6749

Phone: +16704982844747

Job: Corporate Administration Planner

Hobby: Mountain biking, Jewelry making, Stone skipping, Lacemaking, Knife making, Scrapbooking, Letterboxing

Introduction: My name is Kareem Mueller DO, I am a vivacious, super, thoughtful, excited, handsome, beautiful, combative person who loves writing and wants to share my knowledge and understanding with you.