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Innovating the Digital Customer Experience

From dream to screen In association with Jahia

Innovating the Digital Customer Experience From dream to screen In association with Jahia

Econsultancy London 4th Floor, Wells Point 79 Wells Street London W1T 3QN United Kingdom Telephone: +44 207 269 1450 http://econsultancy.com [email protected]

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Published April 2016

Innovating the Digital Customer Experience In association with Jahia Page 3


Contents

1. Executive Summary ......................................................... 5

1.1. About Econsultancy ..................................................................... 7 1.2. About Jahia .................................................................................. 7

2. Methodology .................................................................... 8

3. Defining Digital Experience Innovation ......................... 9

3.1. Innovation is not an option ....................................................... 11

4. How to Innovate Digital Experience ............................. 16

4.1. Innovation methods .................................................................. 17 4.2. Innovation leader skills ............................................................. 19 4.3. How to ‘visionate’ for your company ....................................... 20

4.4. Grounding DX innovation in reality ......................................... 21 4.5. Future-proofing innovation ...................................................... 21

5. Practical Agility .............................................................. 23

5.1. Map it ......................................................................................... 24

5.2. Burst iterations .......................................................................... 25 5.3. Prototyping ................................................................................ 26 5.4. Limited releases ......................................................................... 27 5.5. Test and learn ........................................................................... 28

6. Marginalizing Competition ............................................ 30

6.1. The power of stories ................................................................. 30 6.2. Small is beautiful, particularly when it comes to innovation ... 31 6.3. Growth in a competitive market ............................................... 32 6.4. Competitors as inspiration ........................................................ 32

7. The Successful Innovator’s Toolkit ............................... 33

7.1. Data ............................................................................................ 33 7.1.1. Data trust ............................................................................... 34

7.2. Getting the company on board – leadership ............................ 34 7.3. Cross-silo innovation ................................................................. 35 7.4. Skills ........................................................................................... 36

7.4.1. Recruiting skills ..................................................................... 36



7.5. Technology ................................................................................. 37 7.5.1. Procurement .......................................................................... 37 7.5.2. Try, perhaps buy .................................................................... 38

7.6. Automating workflows ............................................................. 38

8. Conclusion and Future Guidance .................................. 40



1. Executive Summary Innovating the digital customer experience does not begin with technology. Embracing all that software has to offer is certainly a useful tool but successful innovators always begin in the same place – with the customer.

Defining innovation What is innovative? On occasion, it can be the new and the fresh, but it is equally important as an incremental improvement, finding a new unmet need and making only a small adjustment to serve it.

Companies that fail to innovate – digitally or otherwise – do not just stand still; instead, they slide backwards and ultimately fail. The rub is that those companies that do innovate also risk failure if they fail to integrate important brand cornerstones.

Digital experience innovation has a framework but avoids a rigorous plan. There is a need for direction and a goal in mind but too much forward-planning can be restrictive and suffocate potential.

Speed and measurability are hallmarks of the digital universe. They are both a blessing and a curse when innovating customer experience. Ideas come fast and can be implemented even faster, but the temptation to attempt innovation just because it can be done can lead to half thought-out projects and innovation journeys with no destination in mind.

Digital customer experience innovation responds to the needs of the customer and the company.

How to innovate Identifying what trends will lead to market disruption and which are passing fads is vital to setting the company on the right track to innovation success. Some projects that respond to hard trends (market disruptors) set off a chain reaction where other areas of the business jump on the innovation bandwagon. It becomes a virtuous circle.

There are many methods open to the digital innovator – creating labs, holding events, inspiring the workforce or simply improving the way the company shares ideas. There is one overarching principle however: just get it done. Imperfect done is better than perfect undone.

To really embed the understanding that it does not have to be 100%, it just has to be out there, requires great leadership. The workforce and partners need to trust that their leader has a tangible goal in mind and will allow them the freedom from corporate restraint to work through the process.

Bringing great people on board, listening and giving them the freedom to explore are critical leadership skills and ones that need to be worked on if an organization is to deliver a truly innovative digital customer experience.

Practical agility There comes a time when the organization has to stop intellectualizing about innovation and get on with doing it. It needs to adopt a philosophy of practical agility.

This involves putting processes and tools in place that create a path to tangible innovation. Getting started by mapping the customer journey is vital – it identifies innovation opportunities while also delivering the goal the company should seek to achieve. It is both the beginning and the endgame of innovation.



In between these two points are the actions, the hard work steps to bring the idea to fruition. Building a prototype(s), sending it out to test audiences, adapting for learnings, adjusting and rinsing, repeating – these are important processes that can happen in a day or over a year.

However, during the entire time while practical agility is taking place, there is a constant vigilance where the company watches and waits for other opportunities to reveal themselves. Innovation cannot take place in isolation, nor is it an isolated activity following a single path.

Competitive landscape Throughout the period the company takes time out of doing ‘business as usual’ to innovate, its competitors are pressing onwards. It’s important to view their influence as both a challenge and an opportunity.

Competitors are a challenge because they may enjoy larger resources and/or they may be a constant threat to market share. However, competitors also have their weaknesses and it’s important to identify these so as to let them inform your organization on how to improve innovation.

Some of these competitive weaknesses include a lack of agility – many may enjoy large resources but suffer from legacy systems and entrenched strategies that are unwieldy and difficult to release.

Low cost does not mean low quality. Rather, it can force creative thinking and deliver solutions that are more interesting than those found in more traditional channels.

The ‘Innovator Toolkit’ Freedom to think may be important but the organization will achieve little without having the right tools in hand. Many of these are already found within most companies – it’s simply a case of finding a new way to access or use them. That being said, in order to ‘future-proof’ technology, it may become evident that new tools are needed – especially those that can work and play well with existing infrastructure.

Whether illuminating the whole path to innovation or providing route markers along the way, data is the innovator’s friend from beginning to end. It is so vital that its hygiene, its security and its skilled analysis are the innovator’s highest priority.

Leadership takes many forms in innovation but the central theme is being able to unite and inspire the workforce while making sure it is supported in every possible way. This can even include wholesale structural reorganisation to make sure the right people can and are talking to each other. Collaboration is the key to fueling creativity.

Finding skilled people, whether from agencies or internally, will be the biggest challenge for many digital innovators. It is a known fact that those able to translate data strategically into a vision for the future strategically are very few and far between. Upskilling or training internally is becoming imperative.

Finally, technology. Technology is not necessarily a driver of innovation (although it does create consumer behaviors that then create new needs which technology can then service). As a tool however, it can deliver innovation in ever more surprising ways. Technological innovators are some of the bluest sky thinkers and are quick to enable the organisation to enact innovation.

One of technology’s most important roles is as facilitator. Many executives who express a desire to be more innovative note they do not lack the will but, instead, simply lack the time. By organizing institutions to work more intelligently through either collaboration or automated workflows, leaders are able to punch enough clear space between the day-to-day tasks to allow innovation to thrive in their organizations.



1.1. About Econsultancy Econsultancy’s mission is to help its customers achieve excellence in digital business, marketing and ecommerce through research, training and events.

Founded in 1999, Econsultancy has offices in New York, London and Singapore.

Econsultancy is used by over 600,000 professionals every month. Subscribers get access to research, market data, best practice guides, case studies and elearning – all focused on helping individuals and enterprises get better at digital.

The subscription is supported by digital transformation services including digital capability programmes, training courses, skills assessments and audits. We train and develop thousands of professionals each year as well as running events and networking that bring the Econsultancy community together around the world.

Subscribe to Econsultancy today to accelerate your journey to digital excellence.

Call us to find out more:

l New York: +1 212 971 0630

l London: +44 207 269 1450

l Singapore: +65 6653 1911

1.2. About Jahia Jahia Solutions Group (Jahia) is a leading provider of a customizable open source Digital Experience Management platform that aggregates apps, data and content and breaks down organizational silos to innovate the digital customer experience to gain digital agility now and sustainable competitive advantage with one-to-one customer relationships.

The Jahia digital experience management platform translates our customers’ entire business ecosystem, from back-end operations to front-facing marketing content, into streamlined functionality. Transforming digital enterprise from the outside in, Jahia’s technology platform unifies the customer journey and empowers users, including non-technical personnel, to work effectively.

Our technology breaks down silos, facilitates authentic customer relationships powered by agile innovation, trust and a customer-centric digital workforce. This focus ensures digital enterprise transformation for success in today’s competitive business landscape.

Founded in 2002 and headquartered in Geneva, Switzerland, Jahia has offices throughout North America and Europe. Jahia counts hundreds of global brands and governmental organizations, in more than 20 countries, among its esteemed customers.

For more details, visit www.jahia.com.



2. Methodology This Econsultancy report on Innovating the Digital Customer Experience, produced in partnership with Jahia, is based on interviews with senior executives working for international brands.

We would like to thank the following people for their contributions to this report:

l Joe Guith, President , Cinnabon

l Edwin Bos, VP Innovation, Reevoo

l Cameron Edge, CEO , SharpEnd

l Markus Wulff, Digital Innovation, Absolut

l Fredrik Thorsén, Head of Digital Marketing, Absolut

l Andre Eikmeier, Co-Founder and Joint CEO, Vinomofo

l Mariano Dima, Global CMO, HomeAway

l Dominique Ansel, Chef Patron, Dominique Ansel Bakery

l Amber Gadsby, Director of Digital Experience, Domino’s

l Debbie Hulme, Senior Customer Experience Manager, Virgin Atlantic

l Omaid Hiwaizi, President of Global Marketing, Blippar



3. Defining Digital Experience Innovation Customer experience is key to success

“When we were first creating Vinomofo, Justin [Dry, Co-Founder and Joint CEO] and I simply asked ourselves ‘how would we like to buy wine?’ We still ask ourselves that every week, and then we try to focus on the things that will bring the most joy to our ‘mofos’. Keeping things fresh and surprising is a big part of what we do, so that takes constant energy and creativity from our team.”

Andre Eikmeier, Co-Founder and Joint CEO, Vinomofo

Innovation is a much misunderstood concept. For many, its premise is one of creation – creating something new. Its essence, however, is one of response.

Starting with the customer and working backwards has always been at the core of every successful innovation. Certainly there are times the customer will ask; other times their behavior or market forces will show the way.

What is innovation?

“Innovation can be any new idea or better way of meeting customers’ needs, needs they didn’t know they had. It can be big or small, as long as it makes a difference to them.”

Debbie Hulme, Senior Customer Experience Manager, Virgin Atlantic

Innovation can be any new idea or better way of meeting needs of customers or needs customers did not know they had. It can be big or small – the key is that it is something that will make a difference for them.

Understanding customers intimately is the core of all successful digital experience innovation.

The hallmarks of digital innovation Amber Gadsby, Director of Digital Retail Experience at Domino’s, said:

“Innovative experiences can come in many forms. From using information in a unique way that adds value (such as Pizza Tracker) to breaking into new channels in a different way (emoji ordering), there’s no magic solution.”

Digital experience innovation sounds very specific but it presents the same challenges as any innovation. We could be talking about Elon Musk’s reusable rocket, Space X; we could be talking about a piece of plastic that keeps beer gassy for longer. Innovation delivers a benefit to the customer. Some elements may be new but successful innovation is never at the expense of the already great. We are changing the bathwater, not the baby.

What defines an innovative digital experience?

Makes good, great A small improvement in a single element can dramatically improve the customer’s mindset.

Solves a problem Even if the problem can’t be wholly removed, it can be made less onerous with regulation.

Recycles, reuses, repurposes

Time waiting for assets to load? Making the most of customer data? Fill in the spaces.



Is emotional Innovation comes from observing and testing, it’s rarely the result of plans and equations.

Creating something ‘new’

“It’s not just about the ‘new’. It’s about connecting new things and new creations with deep connections and stories that bring about emotions for people. So much of what I most love about pastry is that it can remind us of memories and emotions that are relatable to so many people. A warm chocolate chip cookie just out of the oven brings back memories from childhood, of baking at home with your mother or grandmother, something that is so specific but also relatable to so many people.”

Dominique Ansel, Chef Patron, Dominique Ansel Bakery

Virgin’s Connected Skies Virgin Atlantic wants to connect digital customers to the Virgin experience. This means innovating the digital-only customer experience is important but making it link seamlessly with offline customer experience is vital.

Source: Company data



Enhanced experience with Virgin Atlantic

“It’s not just about being connected. How do we enhance the experience on board the aircraft and also the wider experience on the ground? We’re exploring how people at Virgin can make a difference. How do we create the multi-touchpoint experience where people can add most value? Not just digital but blending the right time and the right way for crew to engage with customers. This gives us a lot of insight into how people move from the physical to the digital. The heartbeat is understanding the customer and innovation is there to meet their wants and needs.”


3.1. Innovation is not an option The brand pantheon is full of cautionary tales of what happens if companies fail to innovate. With all product interaction in 2016 requiring some form of digital experience, their learnings are salutary.

Failure to innovate

Source: Econsultancy desk research, 2016

l Kodak (b: 1888; d: 2012) – Probably one of the biggest corporate head-in-the-sand moments, failing to recognize that consumer behavior was changing and instead of following it, railing against change.

l Polaroid (b: 1937; d: 2008) – Understood the consumer need for immediacy long before other technology could provide it; once others such as Kodak and One Hour Photo caught up its USP was eroded. Its vintage effect is still highly desired on platforms such as Instagram.

l TWA (b: 1930; d: 2001) – Increased competition and failure to invest in new aircraft when customers began to have higher expectations of the airline experience.

l PanAm (b: 1927; d: 1991) – The brand is still a definition for the bygone age of the elegance of flight, other brands appropriate the logo to signify premium travel.



l Woolworths USA (b: 1879; d: 1997; res: 20011) – The dime store’s answer to competition was to buy up other retailers rather than look to opportunities in its own offering.

l Sony Betamax (b: 1975; d: 2016) – Stuck to its stubborn insistence that the quality was better than VHS (it was) when everyone else developed for the cheaper, inferior version. The customer may not always be right but they are powerful.

Look before leaping A recurring theme in this report is the need to push innovation forward – that ‘done is better than perfect’2. Mistakes are not to be feared. Ideate, test, try and go back to the drawing board if necessary.

According to Amber Gadsby, Director of Digital Retail Experience at Domino’s:

“To ensure the culture is pushing in this space, it’s critical to celebrate failures as much as successes. That doesn’t mean there are no consequences if you haven’t done your homework.”

Successful innovation – even one that has followed a path strewn with mistakes – can only happen when there is an understanding of two things: brands need to innovate to stay relevant and brands need to innovate with the customer in mind.

The biggest failures happen when the leadership panics about the former and forgets the latter.

Failed innovators

Source: Econsultancy desk research, 2016

l DeLorean Motor Company (b: 1975; d: 1982) – Lack of demand for gull wing sports car, even with the support of an iconic film series. Practicality still triumphs with consumers.

l Commodore Computers (b: 1954; d: 1994) – Original model enjoyed great loyalty and while increased speed and power were no doubt desired, the much higher price tag and fundamental incompatibility ruled out sales.

l Pets.com (b: 1998; d: 2000) – Too much, too young, the advertising created a well-known brand but the company had not identified what customers really needed. Spent wildly on infrastructure but customers did not come.

1 Res = resurrected. Woolworths renamed its remaining business as Foot Locker. 2 Jeff Bullas



l Ford Edsel (b: 1957; d: 1960) – A big car in an era where customers wanted economy.

l New Coke (b: 1985; d: 1985) – Tried something new by essentially copying its biggest rival; misunderstood that taste was not, in fact, everything when it came to Coke vs. Pepsi.

l Apple Newton (b:1993; d:1998) – With the benefit of hindsight, Apple was right to identify that customers would like some kind of personal organizer they did not have to type on, but at the time its bulky and incapable Newton PDA knew there was a need, it just wasn’t up to the task of matching it.

(Sources: Daily Finance3, Business Insider4, Business Insurance5, SlideShare6)

Few of these examples center on digital experience itself but there are common themes.

Those who failed to innovate at all were rapidly overtaken by market disruptors or new customer trends. Failure to innovate was frequently due to stultified corporate structure, lack of resources, complacency or protectionism.

The failed innovators routinely fell at familiar hurdles: lacking the right consumer insight, prioritizing company desires over customer needs, spending too much on untested ideas and mistaking innovation for aping others’ success or over-confidence.

This report outlines the culture, structures and behaviors companies should think about adopting to enhance their innovation capabilities. But it is also true that digital experience innovation can be hard to pin down or plan for in advance. It might help to think of it as something that happens at the periphery of vision: try to look directly at it – and it disappears.

There is no more perfect example of this than Facebook’s besting of MySpace.

3 http://www.dailyfinance.com/photos/companies-that-have-vanished/#!fullscreen&slide=984634 4 http://uk.businessinsider.com/biggest-product-failures-in-business-history-2014-7?op=1 5 http://www.businessinsurance.org/5-of-the-biggest-business-mistakes-and-failures-in-history/ 6 http://www.slideshare.net/tkmahon/polaroid-failure-case



A tale of two networks

MySpace Facebook

Launched: 2003 Peak users: 75.9m unique visitors a month (2008) Turning point: 2005 NewsCorp buyout $580m

Launched: 2004 Peak users: 1.04bn daily active users (31 December 2015) Turning point: Still turning

With a similar premise and audience to Facebook, first-mover advantage should have given the network an unassailable lead over its upstart rival.

A NewsCorp buyout should have guaranteed the resources and security to allow it to flourish.

Instead, it fell victim to the culture of corporate planning – the antithesis of innovative thinking. Revenue projections based on the business’ appetite for investment and growth plan ignored user needs or developmental flexibility.

The more plans were made for MySpace to generate revenues, the more the network failed to meet projections. Users and advertisers fled to the more flexible and open-thinking Facebook.

Twist in the tale: MySpace’s parent company bought by Time Inc in February 2016.

Launched on-campus as a student network, with a basic interface and stringently limited audience, Facebook had no initial ambitions to spread beyond campus.

The site grew as users exchanged different functionalities via the platform, namely social games such as Farmville whose quasi-chain letter method of attracting friends of friends to join soon boosted subscriber numbers exponentially.

Routinely expanding before funding, only at point of IPO was prospective ROI questioned, the subsequent questioning of Facebook’s business model by ‘traditional’ analysts causing it its only business PR wobble to date.

Acknowledging the power of its reach, advertisers have clamored to find ways to feature on its pages and the company has responded by creating a number of category-disrupting B2B products.

Twist in the tale: Now challenging Google as a data, insight and advertising giant.

Source: Forbes7, Econsultancy desk research

Takeaway: Facebook succeeded because it gave space to innovation and was willing to see where the market led it. Successful innovation responds to the needs of consumers, not a five-year finance plan. Use measurement to stay on track, not build it.

Innovation is not the renegade department, outside the normal demands of planning, measurement, budgeting and ROI. It should be an integral part of the business day-to-day. The key is to understand the role of metrics and planning so innovation has space to grow instead of being throttled at birth.

This is exemplified in the case of Blippar, as President of Global Marketing Omaid Hiwaizi, explains:

“Blippar wasn’t just a technological innovation, it was a business model innovation. It wasn’t just doing visually amazing things, it was thinking carefully about the context of its brand partners and adding value to the moment for shoppers.”

7 http://www.forbes.com/sites/adamhartung/2011/01/14/why-facebook-beat-myspace/2/#56f422cf5df5



The right perspective on innovating digital experience

Focusing on consumer need

“If a company becomes too fixated on new features without really asking if it’s solving a true consumer need, they can get into trouble. A change might feel like a big step for the company but be way behind where the customer needs them to be.”

Amber Gadsby, Director of Digital Retail Experience, Domino’s

The digital arena enjoys many benefits previous generations of innovators could not access. Changing digital experience is relatively inexpensive, quick to implement and quick to change. The test and learn cycle is much simpler than in the physical domain as a result. However, this brings with it its own set of challenges.

There can be a strong temptation to innovate for the sake of it. New technologies emerge all the time, some even free at the point of access, but if their use adds little to the sum of customer happiness, they serve no purpose and are, at best, a distraction. At worst, it can turn the customer off by solving a problem they did not have and ignoring one they did.

70% of mobile customers use click to call and feel it is an important channel.8

And then there’s speed. In theory, someone can have a bright idea in the morning and have it live by lunchtime. But it’s vital that the brand brings the customer with them on the innovation journey. Is the customer ready for a wholesale change? Is the company? Responding to the research noted above, for example, the addition of a ‘click to call’ button is the work of a moment. Is the company set up to handle a dramatic rise in calls? Digital customer experience innovation responds to the needs of the customer and the company.

Innovating the digital customer experience is like any other innovation – the focus should be on the goal (customer happiness), while the action is the thought process and the technology becomes simply the tools to deliver it.

Andre Eikmeier, Co-Founder and Joint CEO at Vinomofo, said:

“We brainstorm a lot. There’s a lot of collaboration. We create ‘task forces’ to focus on a particular problem or opportunity, and give them the freedom to solve it. Innovation comes from looking around you at what’s going on, asking people, particularly your customers, what they like and don’t like, and looking within, free of ego, and being honest about what you’re doing well and what you could improve.”

8 https://www.thinkwithgoogle.com/intl/en-gb/research-study/click-to-call/



4. How to Innovate Digital Experience Knowing where to start with innovation can seem like a mystic art. Just thinking about what to innovate can induce a state of paralysis. There’s so much choice, where to begin?

As the examples in Section 3 demonstrate, market conditions can certainly create an imperative to innovate, but all too often companies cannot see those conditions until it is too late. There are predictable results when companies fail to realise what’s going on.

However, developing a mindset based on observation and an understanding of what those market conditions grow out of is eminently doable.

Daniel Burrus, technology futurist and innovation expert states in a post for LinkedIn that there are two sets of trends that accelerate innovation: hard trends and soft trends.9

l Hard trends: measurable, tangible, predictable. They WILL happen.

l Soft trends: statistical projections, predicting possible futures. They MAY happen.

Burrus’s hard vs soft trends

Hard trends Soft trends*

l Cloud computing

l Service virtualization

l High speed analytics

l Aging baby boomers

l Cyber security / government regulation

l Continued Chinese demand for raw materials

l Continually rising house prices

l Financially stable Eurozone

l Saudi oil

l Financial institution permanence

*All trends people assumed would be predictable and permanent but clearly turned out not to be the case. Importantly, Burrus states that:

“Understanding the difference between hard and soft trends allows us to know which parts of the future we can be right about.”

Moving with the trends

“I would love to tell you that there was a strategic roadmap and we have always known where we were headed, but the reality is, we don’t. We see trends and move in their direction. We had the foresight to quickly increase our Twitter presence, but what’s going to happen with it in the future, we just don’t know.”

Joe Guith, President, Cinnabon

Cinnabon’s partnership with Apple Pay is a result of this philosophy. Initially, the company wanted to engage with digital points of sale in its stores. Engaging with the Revel platform got them to this stage, with Apple being part of the system. So, organically, Cinnabon has become an Apple Pay-enabled retailer. It is a digital experience innovation that no-one expected but that conditions were ripe for. “We didn’t know what was coming. We just put things in place that seemed smart,” recalled Guith.

9 https://www.linkedin.com/pulse/transformational-innovation-daniel-burrus



Today it is possible to argue that the elements of hard trends that innovators can count on will include mobile and the Internet of Things (IoT). It is important to note that within both of these will be soft trends – which is where the test-and-learn aspect comes into play.

Knowing that mobile technology will form an important bedrock of future innovation is a vital, overarching theme under which to innovate but it is not the starting point for innovating a specific digital customer experience. The clue is in the name. The customer is the starting point.

Better serving customers through innovation

“At Absolut we have two main focuses for innovation. The first is obviously the product itself and flavor variants. The digital side is constantly looking at ways we can better serve our customers using digital platforms, tools and techniques. It can be anything from mobile optimisation of content to the Internet of Things.”

Markus Wulff, Digital Innovation, Absolut

Absolut is one of a number of brands using the IoT to enhance customer experience. SharpEnd is the agency acting for the drinks brand, among others, in the IoT space, looking for technological opportunities to blend the online and offline worlds to improve customers’ experience.

Blending approaches

“Any successful brand needs to blend the two approaches. Digital media offers us a wealth of analytics and metrics which enable us to respond in real time if there are optimizations that need to be made around a particular consumer experience. At the same time, however, new technologies are hitting the market faster than ever and to ensure we stay relevant in the future, we need to understand how these technologies will fit into our wider digital and consumer experience strategy.”

Fredrik Thorsén, Head of Digital Marketing, Absolut

4.1. Innovation methods Innovating digital customer experience is rather like building a Lego set. The bricks are the different tools and technology you could play with to build the *thing*. The customer and insight around them is the pamphlet of instructions. As is becoming common these days, Lego sets often come with three different ways of building the set, depending on your level of skill and interest. And there are always, always some bricks and bits left over.

Source: TheBrickLife.com10

10 http://thebricklife.com/how-to-make-a-lego-set-instructions/



Just as there is more than one way to build a Lego set, there is more than one practical method to innovate digitally.

Hackathons and hideaways Vacation rental site HomeAway.com holds digital experience innovation weekends in association with 3DS, a three-day start-up innovation engine aimed at promoting entrepreneurship and based in Austin, Texas. Holding sessions across HomeAway’s global network, the company invites interested parties to come to one of the company’s locations and participate in the weekend-long innovation events.

Participants come from all walks of life and are not linked to the company in any way. Lawyers, students, financiers and tech specialists all join together to create the best solution to any one of HomeAway’s customer needs.

Collaborating and discussing using Socratic Circles Socratic Circles are one way of encouraging conversation, removing bias and fostering creative thinking. They are a way to break out of corporate restriction in brainstorming sessions.

Source: AJ Ogaard11

3DS works both independently and with brands such as HomeAway but by linking up with the latter, it provides what innovative entrepreneurs so often lack – focus. The world is the participants’ oyster – as long as it would fit within the HomeAway business and brand.

“A raft of tech talent was tasked to come up with innovative ideas and explore new digital opportunities for the brand, which yielded great results,” explained Mariano Dima, Global CMO at HomeAway.

Labs Several forward-thinking companies are setting up innovation labs to focus on either design product, digital experience or both. Dedicated creative spaces, these labs aim to bounce ideas around until a few stick.

In February 2016, Domino’s Australia created an interactive DLAB space with collaboration areas and meeting rooms as well as four breakout areas including a backyard tool shed, gaming, garden terrace and library, all designed to encourage creativity. 11 https://www.linkedin.com/in/ajogaard



Don Meij, Domino’s Group CEO and Managing Director, said:

“It’s all about being disruptive, agile adaptive, fast-thinking and responsive to the changing environment around us and having a space dedicated to proving that things will and won’t work on a macro level.”

One project to come from this company-wide (and therefore global) mindset is a delivery robot guided by GPS and object sensors – DRU12. The company notes that it is not yet a reality on the streets but, like everything that comes from similar labs, it’s an experiment worth trying at least once.

It is perhaps amusing to think of digital experience being innovated in a lab like another polymer or pill but as the lines between online and offline channels blur, this is an increasingly vital space to explore what integrating digital experience in the multichannel might really mean.

Markus Wulff, Digital Innovation at Absolut, explained more about their lab:

“Our testing lab allows everyone across our business to actually experience the consumer experience related to connected bottles and our ability to quickly iterate means that the space is constantly being improved. The best outcome from the ‘real world’ testing environment is that our local market teams can visit our global headquarters, see the types of things they can do with connected bottles and then work with us on delivering programs on a more localized level.”

Create a culture A great culture that supports innovation can be easy or difficult to create. It depends very much on the mindset of the company. It requires no special tools, it can be the simplest thing to set up logistically and it has the potential to last the longest. But it requires commitment because it only works when it’s ‘always on’. To reach this way of innovating, companies often have to have spent time using the first two methods above first.

A space for innovative thinking

“Create an environment where innovative thinking can thrive. A large business can create a different unit with a separate P&L and payback timeline. It needs a slightly longer payback and different criteria around how time and money are invested. That has a greater chance of succeeding.”

Omaid Hiwaizi, President of Global Marketing, Blippar

Innovative culture that fosters awareness can find the devil in the detail. One tourism executive recently related13 how the company innovated its live chat experience simply by having a team of staff that was ‘switched on’ to finding interesting patterns in customer behavior. During the chat experience it was noticed that customers would ask some of the same questions over and over again. Content on the site was altered to reflect the general need for this information and customers’ speed to product decision increased. Customers were happier; the company was happier.

4.2. Innovation leader skills One of the biggest challenges for innovation leaders is taking the time to be inspired. There can be few people in business, particularly those in leadership roles, who have enough time to take care of their day-to-day responsibilities, let alone carve out space for some blue-sky thinking. But time

12 http://www.financialexpress.com/article/companies/dominos-pizza-unveils-worlds-first-delivery-robot-dru/227304/ 13 During a 2016 UK-based event under Chatham House Rule.



and time again we hear from successful visionaries how important it is to step outside for inspiration.

Dominique Ansel, Chef Patron at Dominique Ansel Bakery, believes in the importance of making time:

“There’s never enough time unless you make time for it. We believe that innovation takes discipline and actively training your mind to find inspiration from anywhere and everywhere – from art to fashion, film, music, architecture, even just walking about the city. Innovation exists in so many places and every creative person has their own ways that they can spark their imagination.”

Many business leaders look enviously at Sir Richard Branson as he sits, barefoot and in shorts on the verandah of his Necker mansion with two personal assistants by his side. At the helm of the Virgin Empire for more than three decades, today he no longer has a hands-on role in the majority of his former enterprises.

Instead, having delegated the running of his group to talented businesspeople, he fully embraces his role as visionary and figurehead. For his established brands, his occasional appearances serve as a reminder as to what energy, enthusiasm and curiosity can do to push a brand forward. His presence at the helm of his more extreme projects such as Virgin Galaxy show that it is Virgin’s ongoing role to be both literally and figuratively pushing at the boundaries.

4.3. How to ‘visionate’ for your company Domino’s Gadsby understands the challenge of getting everyone – consumers and executives – on board with the innovation mindset:

“Pre-2010 it was getting customers and ourselves to think about a 50 year-old brand in a mature category as innovative. How do you take something that has been around for so long and make it new again – in a way that no-one has? That comes from many sides – will consumers believe you? Will franchisees or management support that approach?”

There is an inherent danger in ‘the decision to innovate’. Along with such questions as ‘how do we make it go viral’, getting or doing innovation is no more than lip service. At best it’s ineffective. At worst, it’s a sticking plaster that hides a growing wound.

Ticking the innovation box

“One of Blippar’s bugbears is that it’s a technology considered by some brand marketers as a candidate for ticking their innovation box. They ask themselves: what can I spend less than 5% of my budget on that I can use as my ‘sizzle’? Being seen in that way is toxic because they usually aren’t strategic about execution and the activity doesn’t get the right support, investment or metrics. In this instance the KPIs aren’t hard and there’s no imperative to succeed – it’s there as a vanity exercise. If we see this happening, we tend to walk away.”

Omaid Hiwaizi, President of Global Marketing, Blippar

To visionate means to be able to think creatively, look around corners and try to see things that are not there, but this must all be grounded in the realities of the business and the needs of the stakeholders, including company staff. Visionaries do not embark on fads and flights of fancy; rather they drive the company to seek new paths and provide most of the map to help it find its way.

Joe Guith, CMO of Cinnabon, said that “innovation falls into three tiers: incremental tweaking, applying competitors’ learnings and the outer edge that is truly new. There is so little that is truly new, it’s a 70-20-10 percent rule. The vast majority of activity is in the 70% bracket.”



4.4. Grounding DX innovation in reality Being given a framework within which to innovate is a bonus rather than a challenge. It’s all too easy to point to innovation for the sake of it. Truly successful innovations solve a problem and answer a need.

Omaid Hiwaizi, President of Global Marketing at Blippar, had some advice:

“Make sure you’re executing with a minimum viable product (MVP) mindset. If it works, it needs to be done to enough scale to tell you if you should be pumping more money into it. You need to be testing your way to a new method of doing something, not just doing a gimmicky thing. That’s the mindset of a visionary.”

HomeAway’s three-day startup is set up with realistic goals in mind. Innovation and creative thinking is wholly encouraged – but within the parameters of creating a service that would benefit vacation rental owners and vacationers. It is a policy that is deliberately restrictive... and liberating.

4.5. Future-proofing innovation Future-proofing innovation comes back to the hard and soft trends mentioned at the start of this section. The company needs to ask if it is finding a new way to navigate a disrupted industry or “[being] the dog that barks at every passing car”14 (RBS CMO, David Wheldon).

Today’s innovation will be tomorrow’s run of the mill. As such, it is impossible to futureproof any single iteration of it because it rapidly becomes obsolete.

However, building an innovation mindset into the company means futureproofing it for innovation. When innovating the digital customer experience becomes a constant listening exercise, a constant iteration of service with both micro and macro improvements, the innovation habit becomes ingrained.

Continuing to push forward

“It’s about finding inspiration and continuing to create and push onward so you’re not being pigeonholed. For us, the key is to keep innovating and moving forward and to understand that it’s not about trying to make hits. In the end, you hope your guests appreciate that. There are always going to be people who love you for one product but it’s even more important to continuously develop new creations so that there are many things for people to enjoy.”

Dominique Ansel, Chef Patron, Dominique Ansel Bakery, New York and creator of The Cronut (™)

14 http://www.marketingweek.com/2016/03/10/rbs-david-wheldon-marketers-dont-be-the-dog-that-barks-at-every-passing-car/



Mariano Dima, Global CMO at HomeAway, has four key tips:

“In a very complex world, with constantly evolving channels, data fragmentation and an unpredictable future:

– Keep it simple.

– Listen to your customers.

– Create an inspiring vision.

– Hire the best people.”



5. Practical Agility Digital experience innovation needs three things to get off the ground – and get off the ground it must. One of the biggest problems executives cite for innovation issues is failure to launch – the process, not even the project. Therefore, the first of those things is just get on with it.

Once moving, the motions innovators need to go through all center around practical agility:

1. Understand and map the customer experience journey [then start innovating!]

2. Burst iterations

3. Prototyping

4. Limited releases

5. Test and learn

Customer experience journey A vital element to incorporate into innovating the digital customer experience is to acknowledge that no channel exists in isolation. If consumers expect an immersive digital experience, there is an understanding that this will somehow link to the retail environment, as well as social and even the product itself.

Using the Internet of Things

“The Internet of Things allows us to explore the digital customer experience in two main ways – smart packaging, which allows us to create digital media touchpoints through our 100m+ bottles a year and integrating with third-party services such as on-demand delivery. The connected customer is of course something we are aware of and we are taking steps to embed our brands in the connected ecosystem.”

Fredrik Thorsén, Head of Digital Marketing, Absolut

Understanding where and how your customer interacts does not just let companies communicate with them at the right time, in the right place. It also helps them predict where their next journey will be.

Edwin Bos, VP Innovation at Reevoo, said:

“To figure out those needs I’ve done 100+ hours one-on-one in usability studies. In all these hours you get lots of patterns of behavior that informs you about needs. It has to be led by real consumer behavior.”

For Andre Eikmeier, Co-Founder and Joint CEO at Vinomofo:

“It means constantly reviewing the user experience and making sure it’s the best experience you can imagine. Wherever you find something in the experience you could imagine being better, you make it better. And it’s never ‘set and forget’, as behavior, technology and the environment are constantly changing. And hopefully, so is your imagination.”



5.1. Map it Providing added value

“The driving philosophy behind our IoT explorations is that if we can provide more than just ‘physical’ value to our consumers and, in return, learn a little more about them, then we can start an ongoing personalised dialogue with them. Most importantly, we are able to achieve this at an impactful scale.”

Frederick Thorsen, Head of Digital Marketing, Absolut

Mapping unmet customer needs leads innovators to specific solutions. Innovation is not there for the sake of the new; it is there because somewhere in that journey is a blip, a gap or an opportunity.

HomeAway’s customer journey innovation spectrum Scene-setting statistics:

l Browsing: 85% of holiday shoppers are influenced by reviews and half will not book a hotel without them. (Source: Feefo15)

l Choices: 72% of travelers’ online activity when planning a holiday is researching the destination (Source: Deloitte16)

l Mobile: 71% of mobile users who land on non-mobile-optimized websites go back to their search results and keep looking until they do (Source: Econsultancy17)

l Trust: A third of consumers have abandoned an online shopping cart due to the absence of quality images and product reviews. Poor product descriptions is the third biggest reason behind cost and delivery time for online shopping abandonment in general (Source: Shotfarm18)

Customer journey need Innovation solution Browsing: A better experience December 2015: Apple TV app launched concierge-like

services via TVs in the US. Browse 1.2m holiday rentals; includes extra vacation insight from Gogobot, including recommendations for things to see and do. Links and recommendations sent from Apple TV app to iPhones via SMS.

Trust: Booking confidence Book with confidence guarantee (™) improves the service booked directly on HomeAway’s site, providing comprehensive protection for the full rental payment amount against listing fraud, phishing, misrepresented properties and more.

Choices: Needle in a haystack Best Match guarantee: a sorting algorithm presenting listings of most interest to the specific traveler i.e. its location and amenities. Find properties based on attractions or keywords, not just destinations.

Mobile: Frustration Acquired start-up Dwellable in October 2015: mobile-first travel start-up app and website, inspired by OTAs transforming from booking platforms to travel partners across the whole trip.

15 http://news.wtmlondon.com./reports/how-tripadvisor-took-over-the-travel-information-market/ 16 https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/consumer-business/deloitte-uk-travel-consumer-2015.pdf 17 https://econsultancy.com/blog/66241-mobile-will-be-a-driving-force-in-the-travel-industry-for-2015/ 18 http://www.bizreport.com/2015/11/study-reveals-important-role-of-accurate-detailed-product-in.html



According to Mariano Dima, Global CMO at HomeAway:

“We need to ensure that we drive innovation and leadership thinking in the travel industry as one of our key priorities. We are always investing in innovating our products on multiple platforms, on mobile, online as well as offline.”

Takeaway Research where the customer is experiencing roadblocks or where there is no impediment to ‘doing better’ at various stages in the customer journey. This provides clear innovation signposts where it could deliver competitive advantage, grow ROI or brand share or increase loyalty.

5.2. Burst iterations Digital is the natural home of the burst iteration. Execution is fast, analysis doubly so.

Ask Zappos Created in a period of only 12 weeks, the ‘Ask Zappos’ free personal shopping service allows customers to take a photo of an item of clothing that they have seen out and about and like the look of, and send it to Zappos who will try to track it down for them.

The concept is a ‘scrum’ approach19 where executives meet for minutes at a time to share status updates on their innovation development, get ideas and find solutions.

These take place during a project managed in bursts where a week-long task is set. Everyone commits to getting to the end of their task by the end of that week and then the group can move on to the next stage both quickly and as a team.

The pressure is on to get the to-do list checked by the end of the week, come hell or high water, which does mean that problems get picked up straightaway. What happens in the week may not change but at the end, if something needs to be changed in the following week, little is lost in terms of time, effort or resource.

When a project is in the Labs space, it is not expected to break even. Talking to CNET in 2014, Labs’ director, Will Young, said:

“Obviously if it generates sales, great – but most importantly, we learn about the way people behave. We’re not trying to build a billion dollars off this, we’re just trying to build a great service that our customers will talk about.”20

For every ‘Ask Zappos’ – part of the company’s product offering for two years now – there are several that ultimately do not make the cut. Importantly, these projects are left in the open for everyone to see, often providing inspiration for future labs.

19 http://www.fastcompany.com/3032947/agendas/how-zappos-uses-one-week-work-sprints-to-launch-big-projects-fast 20 http://www.cnet.com/news/zappos-launches-digital-shopping-assistant-service-ask-zappos/



Source: Zappos Labs21

Debbie Hulme, Senior Customer Experience Manager at Virgin Atlantic, said:

“It’s important to say we’re going to do this thing by this data and it’s immovable. We all share that responsibility. It’s also about the bravery to say it’s not perfect but let’s get it out there.”

5.3. Prototyping Rapid prototyping is vital to bring any project to life. Not only does it help a wider team understand what the scope of the project is, what is at stake and how it looks and feels to interact with it, it gives the innovator an instant feel for whether or not it could succeed.

Rapid prototyping

“We wanted to move into rapid prototyping for two reasons. Firstly, because it actually gave our leadership teams a ‘thing’ to interact with versus just sitting through a slide presentation. Secondly, it allowed us to maintain project momentum as we were able to turn around the ‘okay, this is what it could look like’ very quickly so people didn’t lose focus.”

Markus Wulff, Digital Innovation, Absolut

Prototyping gets ideas out into the wild where customers can see and touch, get a feel for new ideas. Explaining is no substitute for experiencing. This is particularly vital if companies are attempting to break totally new ground.

Edwin Bos, VP Innovation at Reevoo, reminds us:

“Any company can change consumer behavior, if you unlock something that creates value unexpectedly. Review systems weren’t common ten years ago. Today it’s a given that companies need some mechanic that allows customers to broadcast what they think. It looks untrustworthy if you don’t.”

21 http://labs.apps.zappos.com/#welcome



A useful blip Two men sat together in an insurance company. Daily, they would bounce ideas off each other about this or that technology or new business ideas. One day they went to a pub and one got out money to pay for drinks. They looked at the £20 note and wondered ‘What if the Queen spoke up and offered to pay for the round?’ A couple of weeks later, one of them pointed their phone at the note again and the Queen came to life. The first version of Blippar was born.

“It was the creativity in that moment which got them going. That was the genesis point – a prototype with image recognition and tracking plus an AR overlay,” explained Omaid Hiwaizi, President of Global Marketing at Blippar.

Experimentation, observation – particularly around stretching the capabilities of something they already had was what led the founders of Blippar to ‘chance’ upon their big idea. Naturally, it wasn’t chance, it was a constant spirit of exploration and experimentation combined with an understanding that there must be something that could improve consumers’ experiences in the digital world and innate behaviors that digital could unlock. These factors did not make it chance, they made it almost a statistical certainty.

Blippar is an augmented reality scanning solution used by brands to add a digital layer of experience to their products. Customers with the Blippar app installed can get added content from magazines, recipes and guidance from food labels or product ideas from store shelving.

It is what Blippar is mistakenly used for that has led to its latest innovation, as told by its President of Global Marketing, Omaid Hiwaizi:

“The team noticed that every time someone was interacting with a brand there would be seven or eight mis-scans [the app would be clicked somewhere other than the scannable item]. This was a stimulus for a new use case – visual search.”

Takeaway Blippar is an example of what happens in a ‘what if’ culture. Observing how the product is used – not just in the ‘right’ way but every way – and wondering what else it might be used for allowed the company to spring forward into a new area. Letting the innovation simply pick up customers the way a sweater gathers lint allowed the company to observe how the new product functioned in a test environment without the pressure of customer expectation.

5.4. Limited releases Blippar’s visual search product has been live since December 201522 but the company has simply been allowing customers to stumble upon it. “The visual discovery will be properly launched soon in 2016 but user interaction has been steadily growing. Users haven’t been prompted, they just discover and use it,” Hiwazi says. Effectively, the product has been researching itself.

Releasing a test experience to the Blippar audience makes sense on a number of levels:

l Selection: Depending on success criteria, it is easier to segment down a smaller group.

l Limited scope, not scale: Limited releases of physical products make sense from a cost and distribution angle but these are less relevant on a digital platform. Limited in this sense can also mean testing one element of a complete package to maintain control over several moving parts and make identifying any potential issue easier.

l Interaction: If detailed, qualitative feedback is required, the level of data is manageable at speed in smaller groups.

22 https://blippar.com/en/blog/2015/12/11/blippar-news-real-time-visual-search/



l PR containment: In the hope that pre-testing has not been a complete red herring, any negative feedback from a failed innovation should be minimal but in the rare event of a large misstep, exposure is limited.

A rapid cycle of imagination, innovation, creation, testing and iteration is not always possible. In that scenario, it is the workarounds that matter, says Debbie Hulme, Senior Customer Experience Manager at Virgin Atlantic:

“The airline industry is very regulated. Anything you want to put on an aircraft has a long lead time because safety must be maintained. These things are what they are. It’s about thinking differently to create within those parameters.”

5.5. Test and learn The act of walking is a beautiful contradiction. The action is not that of a step taken, but a fall averted. Babies who learn to walk have essentially mastered the art of failing to fall over. Of course, before they reach this magical, contradictory state, they succeed in falling over many, many times.

Uncertainty, testing and failure are vital parts of any innovation process. What digital adds to the equation is speed. Both a blessing and a curse, the speed of digital allows businesses to make rapid changes, watch their impacts in real time and tweak, titivate or even remove quickly again after. One finance executive stated that digital allowed him to create customer propositions online in five weeks which would have taken five years ‘in the real world’.

Mariano Dima, Global CMO at HomeAway, said:

“An important thing is to use your product as often as you can. We get a lot of inspirational feedback from our own employees who use our website and suggest ideas for improvement.”

However, speed also means that executives need to be on the ball, with threats coming from all angles:

l Internally: Departmental cynicism, budget pressure, managerial reputation all contribute to pressure on the innovator.

l Customers: Change a well-liked feature and customers will be vocal. First they will comment, then they may move.

l Competitors: The competition is testing your experience, just as you should always be testing theirs. They will be primed and keen to take advantage of any misstep.

‘Fail fast’ has become a favorite innovator’s mantra. Often accompanied by ‘Fail often’ or ‘Fail better’ or even ‘Fail forward’. In many respects this is true but with a few important caveats:

l Fail – quite – fast: Do not jettison an idea because it fails at the first hurdle. Why and where did it fail and with whom? Can it be adjusted to fly better next time?

l Don’t set up to fail: Create a premise, research the premise and test the premise. Many, many well-thought-out ideas go west but many, many more implode when there is zero rationale.

l Bite-size failure: Innovation – particularly digital experience innovation – is all about the small bets. That’s not to say they are not big ideas. But releasing a big idea to a small audience or vice versa is a better option than throwing open the doors, rolling out Colossus and hoping for the best.



l Fail to learn: Fingers burnt, it is tempting to file the idea away in a drawer marked ‘bad things’ and never speak of it again. But learning why innovations died is a vital part of learning.

Amber Gadsby, Director, Digital Retail Experience at Domino’s, believes that “some of the best learning comes out of what went wrong versus what went right. I wish we had more discussion on the critical takeaways from innovation failures as much as the successes.”

Mariano Dima, Global CMO at HomeAway, agreed:

“Testing, testing and testing. In order to generate new ideas and innovations it is crucial to test your product with the people who use it. We do test our products a lot, internally and externally.”



6. Marginalizing Competition The competitive marketplace is an ongoing challenge for innovating digital customer experience. Do companies seek to copy others’ successes? By going far to the left-field, do they risk moving too fast for the customer?

How do disruptors combat big players’ financial might and use innovation not to simply keep up, but gain market share?

These are indeed challenges but, with the right mindset, they can also be approached through the lens of opportunity.

6.1. The power of stories One way to triumph against competitors with resources stacked higher than yours is in the power of the story. Myth creation is a powerful tool in bringing consumers along with you.

Take for example the story of a simple baked good. Dominique Ansel, creator of the now infamous Cronut (™) came up with a hybrid between a donut and a croissant. Somehow, this mongrel pastry caught the imagination of notoriously hard-nosed New Yorkers and, three years since launch, there is still a queue round the block at 8am in the morning for locals to pick up their freshly-baked allocation of two per person (six if you book at least two weeks in advance). If you arrive at 11am then no dice because when they’re gone that day, they’re gone.

Although there is no great alchemy in the making of the Cronut, Ansell has thus far refused to syndicate the recipe to any large restaurant chain or fast food outlet.

Doing so could make him millions if the Cronut were to reach across the US alone. The donut market is worth an estimated $14bn23 annually. Yet Ansell prefers to rise early to be hands-on in his kitchen producing this and many other delights for his local customers only.

Still the lore of the Cronut(™), now joined to an extent by the 3pm Cookies and Cream cup(™), reaches far beyond his Manhattan neighborhood. It keeps customers coming to his door and interest in his brand high.

New York is a mecca for foodies and its gastronomes are notoriously fickle. The latest hot joint burns brightly but can sometimes be a Zagat memory within the year. Ansell enjoys longevity and as much capacity as he can serve.

How does he achieve this? Because his innovation feeds the myth and the myth sustains the reality. Against the famous tourist destinations or well-heeled NYC stalwarts, this independent can hold his own.

Pushing forward

“A lot of people have influence beyond just those people who can taste their product. For us, many of our biggest fans might not even have tasted our products before but they believe in what we do and how we’re pushing forward to create every day.”


23 http://www.ibisworld.com/industry/doughnut-stores.html



6.2. Small is beautiful, particularly when it comes to innovation Trying to find a way to innovate when faced with the resources of the market leader can cause paralysis. Why bother when they have more agencies than you, more customers than you, more money than you? Quite simply, there are many things these competitors, who are now so entrenched, so corpulent, so burdened with history, just can’t do as well as smaller challengers.

It is often said that long-established companies look enviously on smaller, digitally-native brands with their lack of legacy systems, flat management structures and CEOs that ‘just get it’. Indeed, there are many advantages to not being the leader – it’s just a case of finding them and building on it.

Andre Eikmeier, Co-Founder and Joint CEO of Vinomofo, said:

“Vinomofo has been a disruptive innovator, both in the wine and retail industries since day one. We don't really look to our competition to benchmark, instead we think about the customer experience, and look at other categories and spaces for inspiration. Innovation is really a cultural thing, rather than a process thing. Keeping our teams empowered and agile helps the flow of ideas into action.”

Bootstrapping the budget Embracing low-cost digital channels should not mean low-impact digital experience.

Big brand, small team

“I come from the world of Coca-Cola who have done an amazing job in new media but are sensitive about the brand. [At Cinnabon] we’re a big brand with a small young team. We have to roll with the punches and embrace whatever is out there.”

Joe Guith, CMO, Cinnabon

Cinnabon’s social presence is very strong. Last year, they were named one of the top 25 funniest Twitter accounts, which Joe Guith attributes to a great ongoing effort to engage with their social community.

In fact, AdWeek reported24 on the company’s Snapchat launch, noting that the company did not engage in sponsored or paid ads at all on the channel. Instead, the company combined the power of its 100,000-strong Twitter audience and 1m Facebook fans to spread the word.

Without paying any advertising or integration fees, the company has achieved a growing presence in popular culture (appearing in the hit show Better Call Saul and blockbuster movie Daddy’s Home), which enables the brand to reach new audiences. Cinnabon has also gradually become part of customers’ online vernacular, often labelling any cinnamon roll as a ‘Cinnabon’.

“We get product out there, we make things happen and get more mentions. They’re all organic25. We have zero paid media right now,” said Joe Guith, CMO at Cinnabon.

24 http://www.adweek.com/news/technology/cinnabon-hopes-its-twitter-success-will-help-yield-equally-sweet-results-snapchat-167194 25 Mentions, not cinnamon rolls.



6.3. Growth in a competitive market Gaining greater share in a competitive market means identifying what compels customers in the sector to spend more and then find out how the individual brand can respond.

According to Coca-Cola’s chief economist, the amount of discretionary income that people spend remains stable at 5% of their income over time. Eating out has been shown to be a little more volatile but in general, it is the brand of takeaway that changes rather than the number consumed as the value of that 5% rises. They swap KFC for Nando’s. To access a portion of that increasing 5%, food brands need to innovate according to this trend.

However, Cinnabon will never introduce a diet product. Wherever innovation takes a brand, they have to remain true to themselves. Even in a market that seems heavily biased towards trends including ‘clean eating’ and sugar reduction, the reality is people want to indulge. They will just want to know it is the best indulgence they can have in that moment.

According to Joe Guith, President at Cinnabon:

“We haven’t changed the cinnamon roll – we’re changing the forms and the toppings. You can’t just offer people the same thing and charge more for it.”

6.4. Competitors as inspiration Often, looking to competitors or outside the sector can have an inspirational effect. Many executives in the insurance industry, for example, are seeing the impact had on customer expectations by Apple, Amazon, Uber and Airbnb. They realise that these companies hold the digital experiences customers have come to expect. This is where they need to draw their inspiration from for their own companies.

Digital transformation

“It’s effective to show some digital laggards what is happening with the more forward-thinking. Sometimes companies only look at their direct competitors but it’s very effective for us to show to retailers what we manage to achieve in the automotive sector. There is digital transformation happening across all industries.”

Edwin Bos, VP Innovation, Reevoo



7. The Successful Innovator’s Toolkit Mindset and culture are clearly the two critical pillars that support overarching innovation. To build innovation one needs the right toolkit and in many cases these are tools the organisation already possesses.

7.1. Data There is the sense that data today is a binary exercise – literally. All figures, all fact; all right or wrong, ones or zeros and nothing in between. But data, or rather insight, must also be found in the anecdotal, the qualitative, the conversations.

As Amber Gadsby, Director of Digital Retail Experience at Domino’s, pointed out:

“Listening to customer concerns doesn’t tell you how to fix problems but it does expose the need. For example, if we hear ‘I’m hungry, I wish I knew when my pizza would be here,’ that shows us a tension in the experience.”

Data, both structured and non-structured, is flowing into the organization from every channel. Some, such as Cinnabon’s Snapchat, Facebook and Twitter, allows the company valuable insights into how customers want to interact with them. It helps them understand their brand’s personality, particularly with new and non-core customer sets. Cinnabon was particularly keen to understand how a younger generation that had not grown up with a widespread experience of home baking (a previous selling point for the brand) saw the product. The insights have driven a social media-friendly, irreverent tone to the digital customer experience.

“It is important to make sure data is feeding back into the business, otherwise what is the point?”, said Cameron Edge, CEO of SharpEnd.

If data is not just a number, then nor is its flow a one-way street. Customers see themselves as co-creators. They seek value from their data exchange. Surveys suggest that the average consumer would price the annual value of their data to companies at roughly $75026, but any monetary value is spurious.

Where customers see the real value is in relationships and dialogue. In terms of digital experience innovation, customers expect their comments to have impact. As an element of the best digital customer experience, the ability to have one’s voice heard is invaluable, as is explained by Edwin Bos, VP Innovation at Reevoo:

“A lot of industries have been doing surveys but the feedback loop has been non-existent. It’s out of sync with customers’ need for instant gratification. Companies need to show that they’re listening to customers and that the customers are valued. There is a lot of room for people who want to make a connection with brands.”

Reevoo is a customer reviews engine that works with brand partners to provide published customer feedback. Both a detailed review and a star system, customer reviews are a proven way of adding trust and credibility to brands.

26 https://econsultancy.com/reports/value-exchange-from-data/



7.1.1. Data trust 52% of US consumers identify personal data theft as a top financial concern.27

Mintel noted in its 2015 consumer data trust survey that cyber-attacks and vulnerabilities are making consumers uneasy but technology failures such as the one experienced by United Airlines negatively impact customer perception of companies’ abilities to keep data secure.

Consumers have varying degrees of comfort with data security and privacy. According to Verint28, the UK and Germany are most concerned (63% and 61% respectively); Poland the least (28%). The most successful brands are those who benchmark their data security against the least confident consumer.

Innovating the digital customer experience is inevitably going to involve ecosystems involving integrations with apps and services. Understanding the stewardship of data within that ecosystem and ensuring enough visibility so the project can nurture itself and move forwards is going to be vital.

Rewarding customers for sharing their data is one way of acknowledging the contract of trust between innovator and end user. Overt acknowledgement of the role the customer’s data plays in enabling development is another. Reassurance that the company is making data security its top priority, even for products and services in prototype or beta mode, is vital.

Verint also revealed that banks, though poorly thought of overall as a sector, tend to perform highest in surveys regarding honesty and transparency around data (26%) and trust in data security (43%). This may be down to the brand’s inherent security as an institution.

Takeaway: Consumers’ perceptions of data security and transparency are closely linked to overall brand trust.

7.2. Getting the company on board – leadership There is a tendency, particularly with very busy executives in any sector, to be so focused that they are not able to look outside their remit for inspiration. This is a mistake.

Creative focus

“My focus is on inspiration. That is part of my job so for me, it’s not extra work or something I need to actively make time for because it’s what I do every day. I guess that’s the difference between food and other industries. Ours is very creatively focused, finding inspirations and developing new ideas constantly. Innovation is a priority.”


27 http://www.mintel.com/blog/consumer-market-news/alert-maintaining-customer-trust-in-an-era-of-data-breaches 28 http://www.verint.com/assets/verint/resources/white-paper/customer-centricity-rules-of-engagement-emea.pdf



Reinforcing innovation

“To really be successful, you need high-level leadership to reinforce innovation as a valued trait. Not just to say it, but be willing to take the good and the bad with it. Innovation has risk but you don’t win if you don’t try. Do the research and mitigate as much risk as you can. Once you’ve done that you just need to swing for the fences.”

Amber Gadsby, Director, Digital Retail Experience, Domino’s

Joe Guith, CMO at Cinnabon, believes that “leadership is a willingness to take a risk and earn while you learn. It’s incumbent on the brand leaders to say it’s okay to take risks and be confident in that decision.”

If digital culture is not adopted across the whole organization, there is the danger of a two-speed company. A blue-sky thinking, speed-oriented digital and innovation department keen to push forward up against a rational, process-driven corporate body anxious to maintain the status quo.

To help with this, Mariano Dima, Global CMO at HomeAway, explains that “we have regular social gatherings for our employees to network with each other and to benefit from each other’s knowledge.”

7.3. Cross-silo innovation Markus Wulff of Absolut said:

“The first thing to consider is the number of stakeholders involved – production, packaging design, market activation, innovation, marketing. Having such a broad project team means that unless everyone is moving in the same direction, it won’t go anywhere.”

As such, the team focused on their vision for connected bottles - what it means for Absolut, the consumers, the markets – and made sure everyone was aligned around why the company was doing this new action. Once everybody is aligned on the vision for a project, it is then necessary to get them excited and inspired by the creative potential.

Emotional connection

“Collaboration is the key to fueling creativity. That’s why we organize a lot of internal events and brainstorms but also invite external people to our office. Events such as 3DS in London and the US brings external talents such as designers, entrepreneurs, students, developers, journalists and experts from the tech industry together to share creative ideas. Inspiration can come from many different sources.”

Mariano Dima, Global CMO at HomeAway

“We’re so lucky to live in an interconnected world where we can connect with people in so many different ways.”

Dominique Ansel, Chef Patron at Dominique Ansel Bakery

“There needs to be an emotional connection with each other and the desire to deliver something. It does not matter if you are a computer programmer, an analyst or someone in operations. If you have a shared vision and share it as a collective, that’s when it becomes most powerful.”


For some companies, getting people together for that emotional and intellectual conversation involves setting up different innovation departments, making decisions to break it out of the day-to-day. Smaller companies have R&D built in across every department. But small can also mean



busy. Executives noted the need to entrench the right to make dedicated time to step out for innovation.

“In the past we’ve taken 20-25 people on hack weeks. To come up with new stuff, you have to do something,” said Edwin Bos, VP Innovation at Reevoo.

7.4. Skills “The best way for a company to stay innovative is to work with the most talented and creative people – and provide them with an excellent and supportive working environment. As an international company we are in the lucky position to work with a variety of cultures and nationalities and benefit from different cultural backgrounds and expertise in-house.”

(Mariano Dima, Global CMO, HomeAway)

7.4.1. Recruiting skills “You need to have the right people. If you can hire people who question, relentlessly, and have the ability to think outside the box, then you just need to make it clear that you welcome the ideas, and then you need to have the resources to bring them to life,” said Andre Eikmeier, Co-Founder and Joint CEO at Vinomofo.

There can be no doubt that upskilling internally to build an innovation mindset across as much of the workforce as possible is always desirable.

However, there may be times where innovation is not possible without specific skillsets, not all of which will prove to be a constant requirement for the company. Equally, being able to access people with different experiences and inspirations brings fresh perspective to projects.

Cameron Edge, Founder of SharpEnd, is “a big believer of brands building internal capabilities, but I’m also realistic that some things make more sense to be outsourced or externally leveraged”.

There is no such thing as a non-innovative person. It is up to the organization to foster creativity and fresh thinking from every corner.

Dominique Ansel, Chef Patron at Dominique Ansel Bakery, highlighted:

“I think everyone can be creative and I believe that people can improve on becoming more creative as well. That’s something we believe in our culture. A cook just starting out might not begin with the ability to draw up new ideas and creations but eventually they become better and better about generating ideas as they continue to learn and grow with us.”

At HomeAway, Global CMO Mariano Dima says that “we invest a lot in training our employees constantly, which helps us build creative ideas and get further inspiration from sources outside of the business”.

The challenge is to stand out in a competitive marketplace where wages could be doubling and costs impacted. Starbucks is putting down big bets on not having staff work Sundays. Companies may be upskilling and perhaps reflecting these new capabilities in enhanced remuneration packages. However, employee experience beyond the financial is a vital component of growing and retaining an innovative and agile workforce.

“What carries the day is the guest experience and that comes from the team experience – online and offline. Companies have to also start being innovative around the employee value



proposition. If you’re not competitive at that level, you will be left behind,” warns Joe Guith, CMO at Cinnabon.

7.5. Technology “We’re a thought leader in technology and always looking to find new and exciting digital solutions,” says Mariano Dima, Global CMO at HomeAway.

This report has been careful to point out that innovation in digital experience does not come from a technology or gadget. This is to break the overreliance on the ‘ooh, shiny!’ attitude, understanding the customer must come first.

That said, technological development and the people working in that space are a great source of inspiration and insight and may well kick off the process. Equally, knowledge from the tech side of the business can help sense-check innovation. Put simply, they understand the realm of the possible.

Reported in TechTarget29, Dow Jones’ Chief Innovation Officer, Edward Roussel, outlined how IT was involved in the DJ innovation process. “Many of the smartest ideas, not surprisingly, come from people who are imbued in the world of software,” he states.

He goes on to talk about involving tech teams in project workshops, using people with specific expertise to gain deep understanding of what is involved and of course in the final build because of their technical capabilities. Naturally, involving IT in the innovation process gives colleagues a sense of ownership in both the project and the forward direction of Dow Jones as a whole.

7.5.1. Procurement Even with an extensive in-house team of experts, it sometimes pays to outsource. Dow Jones’ Roussel told TechTarget:

“Our technology team is busy and if we come up with a left-field idea they won’t necessarily have the capacity to pivot at a moment’s notice. We want them to stay focused on the job they’ve got. There’s no obligation for them to do the hardcore software development work.”

Knowing what you want

“I think the first job to do is to make sure we know what we want as brands. There’s no point speaking to tech companies or platforms or integrators until we know what we want. It’s a waste of time for everyone and I think it’s particularly selfish to waste young startups’ time when they’re trying to establish a solid business.”

Cameron Edge, CEO, SharpEnd

Being able to succeed or fail in private is also a matter inside the organization. Companies who pay lip service to the idea of innovation will say they are happy for employees to blue-sky ideas, because ideas are free. When it comes down to it, the company is still counting the dollars and the dimes.

Omaid Hiwaizi, President of Global Marketing at Blippar, pointed out:

“It’s very difficult to have proper innovation in a corporate environment. Brand or agency, they are driven by growth, in a context of risk management culture. With Blippar – yes, there is an absolute imperative to grow, but there is also the cultural

29 http://searchcio.techtarget.com/feature/Dow-Jones-innovation-projects-Idea-generation-execution



tenet that 80% right is good enough to test. Corporate environments always striving for 100% right miss this opportunity to innovate.”

7.5.2. Try, perhaps buy If it’s going to get into an innovation mindset, the organization has to let go of the idea of buying and ownership. Businesses are driven by a desire to avoid risk and a great deal of that risk comes from making expensive procurement decisions. No expensive procurement equals no risk.

A financial services executive who wished to remain anonymous explains: “The investment isn’t really in technology. It’s coming from open source which is a different cost. It can be a tenth or even a hundredth of what you used to pay. Using the cloud involves much less heavyweight infrastructure.”

Software as a service (SaaS) allows companies to iterate their technology needs as they go along. Managing data capture and modeling in the cloud removes the need to manage hardware. Managed services exist for everything, from brainstorm facilitation to A/B and multivariate testing campaigns.

Companies will no doubt wish to own certain key elements of their technology stack, particularly when it comes to issues including data management and security. However, for the purposes of testing and swift iteration, making the most use of subscription and cloud-based services will reap rewards.

7.6. Automating workflows There are often tensions in companies trying to embark on digital experience innovation, not the least of which come from the hundreds of other tasks required of the people involved in the innovation process.

Zappos Labs (see Section 5) recognized that executives involved in the innovation process are tied into the tight weekly scrum schedule to prevent other demands on their time limiting their effectiveness, but not everyone can afford to step back from the day-to-day.

Whatever the function of staff in the organization, there is a range of tools available to help them automate their workflows thus freeing up time for individuals to engage in the innovation process.

Automated workflows supporting innovation

Secure document storage and sharing

Information is the lifeblood of innovation and getting it to flow across organizations with multiple departments is difficult to achieve with the speed needed for responsive digital experience innovation.

Reporting dashboards

At-a-glance results from tests and project implementations to allow immediate reaction or sharing across colleagues.

Testing parameters Pre-set testing / optimization tagging and testing policies allow ideas to be put in place, examined and changed without ‘going to committee’ or designing new processes afresh each time.

Messaging and forums

Creating bespoke intranets or using readily available and free to use technologies such as WhatsApp groups or even Facebook Messenger allow teams to chat or share ideas and updates with colleagues in different locations.

Data management Being able to identify trends and anomalies in data is one of the first steps to discovering innovation potential. Accurately managing the inflow of data as well as its reporting allows accurate modeling.



Improved function performance

Executives involved in digital innovation are rarely responsible solely for innovation. Sales, marketing, merchandising all play a role. Automating their day-to-day tasks frees up time for innovation.

Collaboration

“When tech companies are only ten-strong, there’s no question that those people have to collaborate all the time. But now we’re nearly 300 people in 14 offices worldwide, there is a constant exchange of information and data through a whole series of different platforms. The management team is always on WhatsApp while the engineers have lots of forums and email instant messaging. At any one time there might be five or six different channels going on.”

Omaid Hiwaizi , President of Global Marketing, Blippar



8. Conclusion and Future Guidance “Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R & D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.”

(Steve Jobs, former Chairman and CEO of Apple)

Innovating the digital customer experience is, in essence, no different from any other form of innovation. It requires the same understanding of the customer need, the same space to form and share ideas and the same ability to set goals while allowing for the free evolution of the project.

However, digital customer experience differs in two ways: it is unquestionably one of the most make-or-break areas for competitive advantage between brands. Customers’ lives are intensely digitally focused. Even inanimate objects such as bottles of ketchup or vodka have digital connections with customers. No company can afford not to innovate the digital customer experience.

The second critical factor is speed and associated cost. One is far higher than traditional innovation and the other is frequently far lower. This brings with it opportunities and challenges. The speed with which ideas can be brought to fruition is mind-boggling. In some cases it can boil down to a matter of minutes. The ideas can be tested at scale, changed and recreated almost instantly.

However, this means organizations need to be more effective at self-policing. Great ideas can be killed by virtual committee, or at least tested to oblivion. It is important to understand the maxim: just because we can, doesn’t mean we should.

This report has explored how a culture of digital customer experience innovation can be embedded into an organization and suggested a number of practical steps and tools to make ideas a reality. These are summarised below.



Future guidance

Bring the organization with you

Create an environment where innovation becomes possible; remove barriers such as the fear of failure or perfection-itis. Give the workforce the sense that ‘done is better than perfect’. Share the vision. Make it physically simple to collaborate.

Explore the toolkit available

Pursuing new avenues need not mean wholesale and expensive changes. Ideas are free if the teams can find the time to explore them. The influence of SaaS, open API tools and apps means access to new tools is much more open to those even on restrictive budgets.

Don’t plan for innovation Plan how the organization might be able to go about innovation but do not pre-schedule anticipated stages or results. The best innovation rarely goes to plan and by creating restrictive parameters, it shields innovators from important insights. Planning does not inspire a spirit of discovery.

Understand the status quo

Deep-dive into customer and market information. Know the difference between an indicator of market disruption and interesting but not critical fads. Plan how to respond to each. Develop a deep understanding of the customer as a whole person, not just in relation to their consumption of a product or service. Today’s customer has had their expectations of digital customer experience set by Amazon, impacting their expectations of financial services, restaurants and holidays, healthcare and even consumer goods. No sector is immune.

Set goals If planning is restrictive, goal setting is informative. Without tangible goals and KPIs, innovation will keep rolling down a path with no clear end in sight. It is tempting to keep adjusting, testing and ideating without ever making anything live. This is not innovating, this is daydreaming.