Forrester. Understand The Digital Business Landscape

For EBusiness & Channel Strategy Professionals
Understand The Digital Business Landscape

Landscape: The Digital Business Transformation Playbook
by Martin Gill
November 5, 2015
Why Read This Report Key Takeaways

To survive and thrive in the age of the customer, Digitize Your Business Strategy One Step At A
businesses must become digital. While many Time
firms believe they have a digital strategy, few Digital disruption affects every industry. Some,
are thinking about truly digitizing their business like media, are in the grip of disruption, while
strategy. Yet the pioneers of the digital revolution, others, like retail and healthcare, are poised
be they B2B or B2C firms, are driving increased on the brink. In response, eBusiness leaders
revenues through a superior digital customer must champion the creation of an iterative
experience and are increasing efficiency and agility transformation strategy that embeds digital into
through digital operational excellence. This report the heart of their firms.
outlines the driving forces behind digital business.
Digital Businesses Unlock New Sources Of
This is an update of a previously published report; Competitive Advantage
Forrester reviews and updates it periodically for Digital businesses drive enhanced customer
continued relevance and accuracy. We revised value through digital customer experiences, and
this edition to factor in new ideas and data. they deliver efficiency and agility through digital
operational excellence. In doing so, they out-
compete traditional firms by winning, serving, and
retaining customers while remaining responsive to
changes in market conditions.
eBusiness Professionals Must Become Digital

Leaders
eBusiness professionals have the breadth and
depth of knowledge to play a lead role in digital
business transformation. But this isn’t a solo act.
Be the catalyst to drive collaboration between
your CMO and CIO by engaging them both in
your vision for digital business.
forrester.com
For eBusiness & Channel Strategy Professionals

by Martin Gill
with Aurélie L’Hostis, Patti Freeman Evans, Alexander Causey, and Nicole Lesperance
November 5, 2015
Table Of Contents Notes & Resources

2 In The Age Of The Customer, Business Is Forrester interviewed a range of vendor and end
Digital user firms, as well as leveraging its Consumer
Technographics® data, to create this report.
Digital Customers Are The Norm
Digital Competitors Thrive

Related Research Documents
Digital Transforms Business Models
The Customer Experience Ecosystem
10 Welcome To The Post-Digital Future
The Digital Business Imperative
eBusiness Leaders Must Become Digital Co-
Introducing The Global Retail Segmentation
Creators
Digital Businesses Are Designed Differently
Digital Businesses Have The Advantage Over

Traditional Competitors
15 Digital Business Demands Transformative

Action
eBusiness Leaders: Your Company Needs

You!
Recommendations
17 Don’t Build A Digital Strategy; Digitize Your

Business Strategy
19 Supplemental Material
Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA

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© 2015 Forrester Research, Inc. Opinions reflect judgment at the time and are subject to change. Forrester®,
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For EBusiness & Channel Strategy Professionals November 5, 2015
In The Age Of The Customer, Business Is Digital

Your customers are turning to digital touchpoints in advance of traditional ones. Even those
interactions that take place on traditional touchpoints, like in retail stores, airports, or bank branches,
are often digitally enhanced. Digital is no longer just about your website — or even your mobile apps.
Connected cars, ubiquitous mobile access, digitally enhanced and instrumented products, RFID-
enabled product tracking, wearable computing, and more are all building toward a digital revolution
that will affect every industry, every stage of the customer life cycle, and every aspect of your business
(see Figure 1). Forty-seven percent of firms believe that digital has already disrupted their industry, and
just over half believe that they will see more disruption this year (see Figure 2).
To keep up with their digital-first customers, firms must become digital businesses. But this means
more than building a few bolt-on mobile apps. It’s a fundamental rethink of your business model.
Digital businesses exist inside of complex and shifting ecosystems of value.1 To succeed in the digital
age, eBusiness professionals must position their firms as ecosystem players by establishing how
they add value to their customers and how they leverage other ecosystem partners to increase their
operational effectiveness.
© 2015 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law. 2
Citations@forrester.com or +1 866-367-7378
FIGURE 1 Digital Touchpoints Affect Every Stage Of The Customer Life Cycle
Re
ac
h
ENGAGE DISCOVER
Relat io n s hip
ASK EXPLORE
USE BUY
th
ep
D
Digital content (video, editorial,

etc.)
External Web (search, comparison
shopping, etc.) Company website
digital
touchpoints Social (social network, reviews,
community, etc.) Branded Mobile (apps, mobile Web)
digital
touchpoints Tablet (apps, Web)
Call center
Traditional
touchpoints In-store device (kiosk, associate
Branch/store device, etc.)
Wearable device (smartwatch,
fitness tracker, etc.)
FIGURE 2 Digital Disruption Is A Significant Threat For Most Firms
“Do you think your business will be disrupted by digital/technologies in the next 12 months?”
“To what extent do you feel your business has already been disrupted by digital technology to date?”
(Responses on a scale of 1 [not disrupted] to 5 [massively disrupted])
Not disrupted 6% In the next 12 months

6%
Today
Minimally disrupted 9%
14%
Somewhat disrupted 29%

30%
Moderately disrupted 30%

32%
Massively disrupted 23%

15%
Don’t know 3%
3%
Base: 797 executives in companies with 250 or more employees
Source: Forrester/Odgers Berndtson Q3 2015 Global Digital Business Online Survey
Digital Customers Are The Norm
Globally, customers are now connected. And just as digital is growing, customers’ use of traditional
touchpoints is waning (see Figure 3). Forrester’s Customer Experience Index (CX Index™) defines
three increasingly demanding levels of interaction.2 As customers become more accustomed to
digital touchpoints, their expectations increase. As an eBusiness professional, the more you enable
increasingly sophisticated digital experiences, the further you push your customer experience up the
pyramid. This delivers more value to your customers and delivers results for your firm.3 In order to
drive continued growth, eBusiness professionals must understand the complex dynamics of digital
touchpoints as:
›› eCommerce has broken out of the browser. Globally, online shopping is a mainstream activity.
Sixty-four percent of US and 49% of European online adults now regularly buy or order products/
services online at least monthly or more.4 And their activities are no longer limited to using
traditional browsers. In the US, 36% of online adults use multiple devices like smartphones and
tablets to shop.5 eCommerce thrives by offering customers convenience, choice, and value
above and beyond the traditional store experience.6 New devices like tablets are adding to the
convenience factor. Faster, flexible delivery options like Amazon Prime further erode the barriers to
purchase, and emerging technologies like 3D printing potentially transform fulfillment completely.7
›› Mobile moments steer offline decisions. Digital touchpoints are more than transactional
channels — they influence customers’ offline behavior with your brand. The Web will impact
over half of all retail sales in Europe by 2020.8 With 49% of EU-7 smartphone owners regularly
using their devices in retail stores, much of that influence is mobile and in the moment of need.9
Sophisticated shopping tools like Carrefour’s C-Où mobile app create optimized personalized
shopping routes based on the customer’s shopping list, placing this information in the hands of
shoppers at their exact moment of need to influence offline purchases (see Figure 4).
›› Digital accentuates traditional touchpoints. Consumers want rich digital experiences to enhance
their offline journeys, and they want more than many eBusiness professionals can deliver. Some
39% of US online consumers are interested in using an in-store kiosk to place online orders,
although only 4% have used them before.10 Forty-two percent of US and 36% of European online
adults are interested in wearing a wrist-mounted digital device, opening up opportunities for
applications like ticketing, location tracking, and more. eBusiness professionals must extend their
digital strategies into the physical world through technologies like beacons, kiosks, associate
devices, and interactive displays.11
›› Social makes product and service design truly customer-centric. Social media connects
customers directly to back-office teams like product development. Barclays Bank’s “You Said, We
Did” campaign has generated more than 4,000 ideas covering the banks products, its customer
experience, and the role it plays in the community. Customer suggestions are inspiring the bank
to offer new services to its customers, like Barclays Cloud, a “digital safety deposit box” where
customers can securely store electronic copies of documents like their driving license.
›› Mobile banking displaces online banking for everyday tasks. Across the globe, mobile banking
use has exploded, overtaking online interactions in many cases.12 Simple, secure, immediate, and
personalized mobile banking experiences are displacing traditional touchpoints for routine banking
tasks like checking account balances or paying bills.13 In both the US and Canada, more than one
in four online adults are now active mobile banking users.14 Many banks report that mobile banking
customers check their account on their mobile immediately before making a purchase in a store.
›› Digital influence extends to the B2B customer life cycle. B2B buyer behavior has changed
significantly in the past few years. B2B customers who are accustomed to buying on Amazon now
expect that same kind of customer experience in the world of B2B buying.15 Almost three-quarters
of B2B buyers say that buying from a website is more convenient, and 93% say they prefer to
buy online once they’ve decided what they want.16 B2B firms are responding — slowly. Grainger’s
mobile app supplements its traditional paper catalog, while John Deere’s FarmSight suite takes
data feeds from John Deere vehicles to help farmers optimize their operations.17
FIGURE 3 As Digital Engagement Increases, The Influence Of Traditional Touchpoints Declines
Consumers
decrease time
US online adults now report that they spend more time online
with traditional
than watching offline TV (20 and 11 hours, respectively).
touchpoints . . .
• 67% of US online adults read print magazines every week,

down from 74% in 2010.
• The percentage of US online adults reading print newspapers
has fallen from 71% in 2010 to 62% today.
• 86% of all US online adults are broadband users.

• 64% of US online adults have researched a product or
service online in the past three months.
• 42% of US online adults read detailed reviews other people
have posted online about a product or service at least weekly.
• 70% of all US online adults use a smartphone.

• 94% of US online adults who use smartphones use the
Internet via their phones at least once per month.
. . . and increase
engagement
with newer 53% of US online adults with mobile phones access social
and emerging networking sites through a mobile device at least weekly.
ones.
Source: Forrester’s North American Consumer Technographics® Online Benchmark Survey (Part 1), 2015,
and Forrester’s North American Technographics Online Benchmark Survey, Q2 2010 (US)
FIGURE 4 Carrefour Smart Shopper Guides Shoppers From Digital Research To Offline Purchase
Source: Carrefour mobile app and website
Digital Competitors Thrive
No industry is immune to digital disruption. eBusiness professionals at manufacturers like L’Oréal

and Nestlé are bypassing retailers and selling direct to consumers on the Web. Shoppers on Amazon
and eBay source low-cost products directly from suppliers in China. Streaming services like Netflix
and Spotify remove the need for physical distribution of entertainment products altogether. Services
like Bitcoin and PayPal threaten to upend the payments landscape.18 Innovation and distribution
ecosystems like Elemica and the Open Automotive Alliance are transforming product design and
manufacturing.19 Your competitors are innovating with fast, cost-effective, efficient ways of delivering
products and services to their customers. They are spawning entire businesses built from the ground
up on digital efficiency. Digital disruptors are rewriting the rules in every market. For instance:
›› Airbnb fuels a growing ecosystem of innovators. Airbnb is one of a new breed of digital startups
that has established its own digital ecosystem. It now boasts 1.5 million listings in more than
34,000 cities. It has achieved massive scale with a minimum of capital cost, and now it’s creating a
platform on which other businesses can thrive. Property management services like Beyond Stays
help owners generate more revenue from their rooms. Vayable helps guests plan their experience,
and once they’ve arrived, Feastly helps them organize fine-dining experiences.
›› Amazon bets on social co-creation to take on Netflix. With more than 65 million subscribers,
Netflix has scale to rival the likes of the BBC and Comcast and has played a pivotal role in
disrupting the entertainment industry. Yet Amazon is hot on its heels with Amazon Instant Video. In
a bid to create new content that viewers value, Amazon founded Amazon Studios. It encourages
customers to co-create content by uploading scripts, storyboards, and videos.
›› Google underpins a rapidly growing connected car ecosystem. The Open Automotive Alliance,
founded in 2014 by Audi, General Motors, Google, Honda, Hyundai, and NVIDIA, is rapidly
attracting new partners to its ecosystem. It places Android technology at the heart of an ecosystem
of app providers like Skype and Spotify, extending their reach into the in-car environment. It rivals
similar alliances formed around Apple, Microsoft, and the open source GENIVI Alliance platform.
Applications like Volvo Car’s eCommerce delivery service begin to show the potential of these
wider ecosystems.
›› Fidor Bank disrupts banking by engaging customers through social touchpoints. German
bank Fidor engages customers in social co-creation of products and services. It boasts 250,000
community members who offer peer-to-peer advice on saving, investment, and everyday financial
problems. It facilitates peer-to-peer lending, co-designs products with its community members,
and even offers overdrafts with an interest rate that is directly connected to the amount of “likes”
on Fidor Bank’s Facebook profile (see Figure 5). Fidor Bank believes that it engenders consumer
trust by operating as part of a socially connected ecosystem.
FIGURE 5 Fidor Bank Engenders Trust Through Social Engagement
Source: Fidor Bank website
Digital Transforms Business Models
Digital products are creating new business models or revenue streams for firms. eBusiness
professionals in firms like Michelin, Nike, and Rolls-Royce are unlocking the value in data — like location
or consumption data gathered from sensors, mobile devices, and wearable technology. This allows
them to digitally enhance the services they provide to their customers and to offer new payment or
consumption models that appeal to new customer segments, driving incremental revenue. For instance:
›› DriveNow transforms car ownership. BMW partners with rental company Sixt to transform
the experience of owning a BMW (see Figure 6). Together they have created a digitally enabled
ecosystem called DriveNow. It connects half a million customers in nine cities in Europe and the US
to a network of 3,800 vehicles.20 A mobile app guides users to their nearest car, and digital sensors
in the car track the car’s mileage. Just like with Zipcar, customers pay by the mile. Unlike with
Zipcar, BMW builds a direct digital relationship with its new drivers. It is reaching new customers
who either can’t afford or don’t want to own a BMW yet still want to drive one.
›› Metromile transforms auto insurance. US auto insurer Metromile helps customers save money
on their auto insurance. It provides customers with an Internet-connected device that plugs into
their car’s diagnostic system. Customers pay for insurance by the mile, saving low-mileage drivers
an average of $500 a year and giving Metromile a unique low-cost differentiator. The Metromile app
also provides value-added information, giving users statistics about routes and car usage as well
as engine diagnostic data. It can even automatically call for assistance in the event of an accident.
›› Argos transforms store-centric retail. With over 750 stores nationwide and some 90% of UK
shoppers living within 10 miles of one of its stores, UK multicategory retailer Argos believes that
its stores provide a key competitive advantage. Argos’ digital store strategy includes in-store
tablets, interactive digital signage, 60-second pickup of online orders, and a “buy anywhere, fulfill
anywhere” ethos. Courier partner Shutl capitalizes on Argos’ store network to provide sub-90-
minute delivery to shoppers’ homes. Argos’ multichannel sales represent over half of its business,
and click-and-collect sales now represent 34% of overall sales.21
FIGURE 6 DriveNow Creates A Digitally Powered Revenue Stream For BMW
Source: DriveNow UK website
Welcome To The Post-Digital Future

The pace of digital change is accelerating. To succeed in the coming years, businesses must
accelerate the pace of transformative change. Every business must become a digital business. Digital
business must be embedded as a core competency, not as a bolt-on. This means reinventing your
firm from your customers’ perspective and operating as part of a wider value ecosystem to offer more
to your customers than you can on your own. This is a new way of thinking that transcends functional
boundaries to create an outside-in organization.22 Forrester defines digital businesses as follows:
Digital businesses win, serve, and retain customers by continuously creating and exploiting
digital assets to simultaneously deliver new sources of customer value and increase their
operational agility.
eBusiness Leaders Must Become Digital Co-Creators
eBusiness professionals are ideally placed to play a lead role in defining their firms’ approach to digital
business, and in 40% of the firms we surveyed, eBusiness leaders are already directly responsible
for creating their firm’s multitouchpoint digital strategy (see Figure 7). Few other executives are
so well equipped. eBusiness leaders typically bridge the strategic and the operational, as well as
understanding their firm’s marketing, sales, service, and technical context. But customer experience
is only half the battle. eBusiness leaders must extend their thinking to embrace digital operational
excellence, and that means partnering with their technology management teams to champion the
business technology (BT) agenda. This isn’t a solo act. Your challenge as an eBusiness professional is
to raise the profile of digital within your organization so that everyone can understand the opportunity
that digital business brings.
FIGURE 7 eBusiness Professionals Play A Pivotal Role In Co-Creating Digital Strategy
“What role does the eBusiness team play in creating or executing your multichannel strategy?”
The eBusiness leader provides vision and strategy

24%
that are executed by the eBusiness team
The eBusiness leader provides vision and strategy
that are executed by other departments/ 16%
business units
The eBusiness leader is part of a larger
41%
steering committee that is companywide
The eBusiness leader and team simply execute

4%
plans created by other departments
The eBusiness team is barely involved

14%
in the cross-channel strategy
Other 2%
Base: 51 eBusiness and channel strategy professionals
Source: Forrester’s Q3 2014 Global eBusiness And Channel Strategy Professional Online Survey
Digital Businesses Are Designed Differently
Digital businesses inherently leverage the competitive advantage that Internet-connected technologies
bring. They excel at delivering value-add digital customer experiences, and they embrace digital
ecosystems to achieve unprecedented levels of operational agility and efficiency.23 The firms of the
future won’t talk about digital and traditional touchpoints — digital will be blended into every aspect of
their operating model because:
›› Digital businesses enhance revenues and increase efficiency. The businesses that survive
and thrive in the post-digital age will master two critical aspects of digital — digital customer
experience and digital operational excellence (see Figure 8). Firms that can’t deliver a superior
digital customer experience will see their revenues eroded by their digitally savvy competitors.
Firms that can’t unlock the operational agility and efficiency that digital technologies bring will
struggle to keep pace with the market and will become decreasingly cost-effective. Digitally savvy
firms will deliver disruptive customer experiences and will do so more cost-effectively than their
traditional competitors.
›› Digital businesses achieve speed and scale through ecosystems. Digital enables both
customers and businesses to rapidly switch service providers. For customers, this means enhanced
choice. For firms, it means those that master ecosystems will become more agile and adaptable
than their competitors. Digital businesses will think and act like network players, not standalone
entities. Firms that aren’t ecosystem players — such as those that promote closed, proprietary
ecosystems — will lose customers to their more open competitors. To customers, it’s the digital
equivalent of buying a pan from Walmart and being told you can only cook Walmart food in it.
FIGURE 8 Digital Businesses Master Customer Experience And Operational Excellence
Customer
Digital customer
experience Data and insights
New digitally
enhanced products
and services Digital operational
excellence
Enterprise
Digital Businesses Have The Advantage Over Traditional Competitors
Digital businesses — both those that are “born digital” and those traditional firms that are transforming —
have the advantage over their competitors on four key dimensions (see Figure 9). To understand how to
transform your current operation into a digital business, look to those that have started the journey. Digital
businesses are:
›› Agile and dynamic, not fixed and static. Turkish bank Garanti launched its mobile wallet service
by leveraging an ecosystem of partners.24 Garanti’s eBusiness team realized that in order to
capitalize on the growing consumer demand for mobile banking, it needed to rapidly deliver new
mobile functionality. Rather than design and build this from scratch, Garanti integrated a number
of innovations such as mobile payments, mobile money management, merchant-based offers, and
voice control into its new mobile banking app, iGaranti (see Figure 10). By positioning itself as an
ecosystem player, Garanti achieved flexibility and speed to market that it could not achieve internally.
›› Customer-centric, not channel-siloed. CVS places digital at the heart of its business strategy.
Its “product owners” report to the chief digital officer and own the customer experience for critical
journeys across all touchpoints. They leverage data from CVS’s ExtraCare loyalty scheme to map
out end-to-end customer engagements and have the necessary cross-functional capabilities
and responsibilities to continually develop and iterate each journey. Customer satisfaction —
not channel measures — is the key gauge of success. By focusing on cross-touchpoint digital
engagement, CVS has driven a 250% increase in mobile traffic, and ExtraCare shoppers typically
buy almost twice the number of items that non-members buy.25
›› Technologically enabled, not legacy-constrained. The BBC is an active digital ecosystem player.
It publishes an extensive range of services via APIs, allowing developers to consume BBC content
like news feeds, traffic updates, or program schedules or to embed widgets like the BBC iPlayer on
their websites. It also sources data from sites like MusicBrainz and Wikipedia to enhance its own
content. The BBC’s combined digital coverage of the 2012 Summer Olympics reached a record 55
million global viewers across TV, the Web, and mobile, with over 9 million daily website visits from
non-UK viewers.26 Digital extends the BBC’s reach to engage new global audiences.
›› Data-driven, not ad hoc. British Airways uses a range of data sources to continually optimize
its operations.27 CRM apps on onboard iPads help cabin crews personalize the experience for
high-value frequent flyers. The same iPads also digitize many critical safety processes, alerting
maintenance ground crews to potential faults with planes. This minimizes the turnaround time
between flights, keeping costly planes flying. Digital baggage labels help optimize the flow of
luggage while also allowing travelers to check the location and status of their bags via the British
Airways smartphone app.
FIGURE 9 Digital Leaders Must Rethink Their Competitive Advantage
Agile and dynamic Not . . . Fixed and static
Customer-centric Not . . . Functionally siloed
Technologically Not . . . Legacy-constrained

enhanced
Data-driven Not . . . Ad hoc
FIGURE 10 iGaranti Builds A Digital Ecosystem To Bring New Products To Market
Mobile contactless
payments Mobile digital
wallet
Turkcell
Card.io
Visa
Garanti
Voice navigation Merchant-funded offers
Foursquare
Nuance
Markafoni
Biletix
Bonubon
Digital Business Demands Transformative Action

Few firms are born digital. Most firms pre-date the digital age and must face the future with a legacy
of their previous operations. Some older firms, like Burberry and USAA, are making bold steps toward
achieving their digital vision. In many cases, these leading firms have a head start now because
they are lucky enough to have a digitally savvy CEO who has driven top-down transformation. Many
comparatively young firms like Capital One, Microsoft, and Virgin Atlantic Airways also acknowledge
the need for digital transformation. Even Internet pure plays like Asos, Fidor Bank, and PayPal aren’t
immune to digital disruption because unless they keep pace with their ever-evolving consumers, they
risk becoming tomorrow’s dinosaurs. As an eBusiness leader, it’s your job to highlight the need for
change. You must work with the C-suite to build the business case, and you must help your senior
leaders shape your digital business strategy.
eBusiness Leaders: Your Company Needs You!
Digital is a boardroom topic (see Figure 11). But appointing strategic ownership does not always mean
that your strategy is right or that appropriate action is in place to deliver the necessary transformation.
Complacency isn’t an option. eBusiness leaders must act now to help their firms transform because:
›› Digital gives businesses a global scope. The Internet opens up a wealth of cross-border
opportunities, giving consumers an international reach. Many eBusiness leaders see international
expansion as their next big growth opportunity, but few firms can do this on their own. For instance,
to further drive its global growth into the complex Russian market, UK apparel retailer Asos
partnered with logistics specialist wnDirect and Russian courier SPSR-Express.28 Asos’ international
sales continue to grow, increasing by 22% in 2014, and now account for 61% of its revenues.29
›› Digital opens up new business models. Not only are new touchpoints emerging — so are new
ways of buying and selling. Business models such as Ocado’s subscription-based deliveries,
Rolls-Royce’s pay-by-the-hour aero engine leasing, Tesco’s marketplace, and Walgreens’ photo
application programming interface (API) present rich opportunities. But bolt-on strategies will only
take you so far. If eBusiness professionals are to create new digital revenue streams, they need
to champion an enterprise approach to digital, engaging with technology management teams to
unlock the value in their data.
›› Technology can deliver as it never has done before. Serving a consumer seamlessly across
multiple touchpoints has been possible for years, but it’s been hard. But now it’s possible to move
technical building blocks, like commerce or CRM, completely to the cloud.30 Major vendors such as
Adobe, IBM, Oracle, and SAP are positioning themselves to provide complete digital ecosystems.
Integration technologies like APIs and master data management can insulate legacy systems,
making it faster and easier to access data and to enhance your customer-facing touchpoints.
eBusiness leaders can’t go it alone anymore. Closer collaboration with technology management
teams is a must.
FIGURE 11 Digital Is A Boardroom Topic
“Who is accountable for the digital vision and strategy at your company?”
CEO 12% Vision

6% Strategy
CMO/SVP of marketing 8%
9%
CIO/SVP of IT 4%
7%
CTO/SVP of technology 5%
6%
Chief digital officer/SVP of digital 3%

4%
Chief customer officer/SVP of customer 3%

3%
SVP of eCommerce/online sales 2%

3%
COO 3%
4%
CFO 2%
3%
A combination of the above, 7%
led by the person selected 7%
Base: 1,624 executives in companies with 250 or more employees
Source: Forrester/Odgers Berndtson Q3 2015 Global Digital Business Online Survey
Recommendations
Don’t Build A Digital Strategy; Digitize Your Business Strategy

The time to transform is now. Some industries, like media, are in the midst of digital disruption. Others,
like financial services, are on the cusp of disruption. Even outliers like construction or heavy industry
aren’t immune. Digital may be on your boardroom agenda, but eBusiness leaders must be a key voice
in that discussion. Few other executives mix the technical savviness, business acumen, and end-
to-end understanding of their firm’s business model. And many eBusiness leaders already earned
their transformational stripes when they first established their online division. eBusiness leaders must
become strategic digital leaders and:
›› Be the catalyst for collaboration. The C-suite may know that digital is important, but there is
a fair chance that they don’t yet know what to do about it. As an eBusiness professional, your
key allies are your CMO and your CIO. Strengthen those relationships. If they are already digitally
savvy, help them make the case for transformation by highlighting the risks and opportunities of
digital disruption. If they lack a digital background, then your first task is to educate them in why
digital is critical. Highlight the disruptors in your market. Show them digital success stories. But
don’t just focus on the C-suite — engage their direct reports, as well, to sow the seeds of digital
transformation and influence them from every angle.
›› Define a compelling digital business vision for their firm. It’s vital that you be able to describe
how digital will affect your business. Don’t just focus on digital customer experience. Look at where
digital technology like RFID, social networks, or employee mobility can drive operational agility
and efficiency. Think about how you can leverage the data you already hold to unlock new sources
of customer value or build new digital revenue streams. Lead the discussion with your existing
partners to begin to drive new levels of agility into your existing ecosystems. Engage with mature
digital ecosystem players like Adobe, eBay, or Google to inspire innovation. Your digital vision must
encompass every aspect of how your firm does business.
›› Assess their firm’s digital readiness to establish the size of the gap. Understanding the size of
the gap is a vital step in planning your digital business transformation. Forrester’s digital business
maturity model can help you establish your starting point by assessing your digital capabilities
across your culture, organization, technology, and insight.31 It helps you identify critical gaps and
can also benchmark your position relative to your competitors. Proving that you are behind your
competition can be a compelling driver for action and investment.
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Supplemental Material
Survey Methodology
Forrester conducted the North American Consumer Technographics Online Benchmark Survey (Part
1), 2015, fielded in March 2015 to 61,222 US individuals and 6,642 Canadian individuals ages 18 to
88. For results based on a randomly chosen sample of this size (N = 61,222 in the US and N = 6,642
in Canada), there is 95% confidence that the results have a statistical precision of plus or minus 0.4%
of what they would be if the entire population of US online adults (defined as those online weekly or
more often) had been surveyed and plus or minus 1.2% of what they would be if the entire population
of Canadian online adults had been surveyed. Forrester weighted the data by age, gender, income,
broadband adoption, and region to demographically represent the adult US and Canadian online
populations. The survey sample size, when weighted, was 61,222 in the US and 6,638 in Canada.
(Note: Weighted sample sizes can be different from the actual number of respondents to account for
individuals generally underrepresented in online panels.) Please note that respondents who participate
in online surveys generally have more experience with the Internet and feel more comfortable
transacting online.
Forrester conducted the North American Technographics Online Benchmark Survey, Q2 2010 (US),
fielded in April 2010 to 26,913 US online users ages 18 to 88. For results based on a randomly chosen
sample of this size (N = 26,913), there is 95% confidence that the results have a statistical precision of
plus or minus 1.4% of what they would be if the entire population of US online individuals ages 18 and
older had been surveyed. Forrester weighted the data by age, gender, income, broadband adoption,
and region to demographically represent the adult US online population. The survey sample size,
when weighted, was 26,749. (Note: Weighted sample sizes can be different from the actual number
of respondents to account for individuals generally underrepresented in online panels.) Please note
that this was an online survey. Respondents who participate in online surveys have in general more
experience with the Internet and feel more comfortable transacting online. The data is weighted to
be representative for the total online population on the weighting targets mentioned, but this sample
bias may produce results that differ from Forrester’s offline benchmark survey. The sample was drawn
from members of MarketTools’ online panel, and respondents were motivated by receiving points that
could be redeemed for a reward. The sample provided by MarketTools is not a random sample. While
individuals have been randomly sampled from MarketTools’ panel for this particular survey, they have
previously chosen to take part in the MarketTools online panel.
The Forrester/Odgers Berndtson Q3 2015 Global Digital Business Online Survey was fielded to 947
Odgers Berndtson clients. However, only a portion of survey results are illustrated in this document;
for quality assurance, we screened respondents to ensure they met certain standards in terms of
job responsibilities and the size of their organizations. Forrester fielded the survey from July 2015 to
September 2015. Respondents were offered no incentive to complete the survey other than a summary
of the survey results. Exact sample sizes are provided in this report on a question-by-question
basis. This survey used a self-selected group of respondents (executives who have interacted with
Odgers Berndtson) and is therefore not random. The survey was fielded only in English. Among the
respondents, 72% work in North America, 20% work in Asia, and 7% work in Europe. Fourteen percent
are CEOs, 26% C-level executives, 42% other executive roles, and 16% general management. This
data is not guaranteed to be representative of the business population, and, unless otherwise noted,
statistical data is intended to be used for descriptive and not inferential purposes. While nonrandom,
the survey is still a valuable tool for understanding where business executives are today and where the
market is headed.
Forrester fielded its Q3 2014 Global eBusiness And Channel Strategy Professional Online Survey to
eBusiness and channel strategy professionals. The panel consists of volunteers who join on the basis
of interest and familiarity with specific marketing and strategy topics. For quality assurance, panelists
are required to provide contact information and answer basic questions about their firms’ revenue
and budgets. Forrester fielded the survey in September 2014. Exact sample sizes are provided in
this report on a question-by-question basis. Panels are not guaranteed to be representative of the
population. Unless otherwise noted, statistical data is intended to be used for descriptive and not
inferential purposes.
Endnotes
Business leaders don’t think of digital as central to their business because in the past, it hasn’t been. But today’s
1
customers are digitally empowered; they continuously integrate new digital capabilities into their work and personal
life in order to achieve their needs, wants and desires. Customers increasingly shape perceptions of value based on
the ability of your firm’s products and services to integrate into this digital world — to become part of the customer’s
personal value ecosystem. Succeed in reshaping your business as fundamentally digital and you can become a digital
predator; fail and your business will become digital prey. This report sets out the vision of digital as a catalyst for your
business transformation to win, serve, and retain customers in the age of the customer. The future of business is
digital. See the “The Digital Business Imperative” Forrester report.
Three questions drive the Customer Experience Index: How enjoyable were they to do business with? How easy
2
were they to do business with? And how effective were they at meeting your needs? This report helps answer
these questions by providing benchmarks of the quality of customer experience for 175 large US brands across 14
industries including retailers, hotels, banks, credit card providers, insurance firms, airlines, wireless service providers,
and investment firms. We show the highest- and lowest-scoring companies and industries as well as the ones that
moved up or down since our 2013 study. Customer experience professionals should use this report to understand their
competitive environment and set goals for optimizing their customer experience management practices as they proceed
along the path to customer experience maturity. See the “The Customer Experience Index, 2014” Forrester report.
Years of Forrester data confirm the strong relationship between the quality of a firm’s customer experience (CX) and
3
customer loyalty. We built three simple models to estimate the impact that customer experience has on three loyalty
measures: willingness to consider the company for another purchase, likelihood to switch business, and likelihood
to recommend. This report shows the results that our models predict for 13 industries. CX professionals should use
the interactive versions of those models to explore a range of benefit scenarios tailored to their company’s unique
situation, which will help prove their business case and win the funding needed to move their organizations along the
path to customer experience maturity. See the “The Business Impact Of Customer Experience, 2014” Forrester report.
Source: Forrester’s North American Consumer Technographics Retail Survey, 2015 and Forrester’s European
4
Consumer Technographics Retail Survey 1, 2015.
It’s easy for eBusiness executives to assume that shoppers use different touchpoints the same everywhere. But
the reality is that there are some significant global differences in consumers’ attitudes and behaviors with regard to
the touchpoints they use to research and shop. eBusiness executives who plan on expanding internationally must
understand these nuances and provide localized shopping experiences that go beyond language and currency to tailor
touchpoint-specific customer journeys to local markets. Forrester’s global retail segmentation provides a framework
for understanding the touchpoints retail shoppers use around the globe. It enables eBusiness executives to identify
critical touchpoints and to understand the differences among shoppers in different countries in order to create more
tailored, relevant experiences. This document introduces the framework, which is embedded in Forrester’s global
Technographics benchmark surveys and is available in more detail on a country-by-country basis to Technographics
customers. See the “Introducing The Global Retail Segmentation” Forrester report.
5
Source: Forrester’s North American Consumer Technographics Retail Survey, 2015.
6
This report lays out the current state of eCommerce and the enormous trillion-dollar opportunity it will represent
around the world by 2018. We discuss the key drivers of web success; the evolution of shopping behavior online,
including the categories that introduce customers to the online channel; and the factors that will drive even more
innovation and, ultimately, sales in this channel for years to come. See the “The eCommerce Juggernaut Dominates
Retail” Forrester report.
7
Unlike the Web, mobile, cloud, and analytics, 3D printing innovation has entered from left field, completely
independent of the technology stack. Besides presenting a valuable lesson in adjacent innovation, 3D printing offers
a new opportunity for CIOs to expand their influence in business domains. In this report, we: 1) introduce and define
the 3D printing ecosystem; 2) assess and project the business value of 3D printing; and 3) outline the steps necessary
to prepare your organization for a 3D printing economy. See the “3D Printing Drives Digitization Further Into Products,
Processes, And Delivery Models” Forrester report.
8
Forrester forecasts that over half of all retail sales in Europe will be impacted by the Web by 2020. These web-impacted
sales include both online sales (including mobile and tablet sales) and cross-channel sales, where the sale is completed
in-store following online research. For eBusiness pros, these cross-channel retail sales emphasize the importance of
using digital assets to drive sales offline as well as online. This report helps eBusiness professionals understand the
impact that a cross-touchpoint customer journey and an organization’s digital presence have on driving overall sales.
See the “European Cross-Channel Retail Sales Forecast, 2015 To 2020” Forrester report.
In the US, we expect this point to be reached by 2017. See the “Forrester Research Web-Influenced Retail Sales
Forecast, 2015 To 2020 (US)” Forrester report.
9
Source: Forrester’s Global Consumer Technographics Online Benchmark Survey, 2015.
10
Source: Forrester’s North American Consumer Technographics Retail Survey, 2015.
11
The face of retail is changing. In-store digital experimentation is well underway, and eBusiness executives have the
technical know-how and an increasingly cross-functional view to lead these initiatives into full-scale rollouts. In this
report, we lay out the current state of digital store initiatives and the promising opportunities a digital store overhaul
represents for retail. See the “The State Of The Digital Store” Forrester report.
12
Several banks that we interviewed for this research told us that the number of mobile banking interactions had already
overtaken the number of online banking interactions. Although far fewer customers use mobile banking than online
banking, customers who use mobile banking interact with their accounts much more often, both because mobile banking
encourages interaction and because the most active customers have the most incentive to adopt mobile banking.
13
Mobile banking is the most important strategic change in retail banking this decade. Mobile banking is now
widespread: More than one-third of US online adults are now active mobile banking users — up from just one in 10 in
2009. See the “The Mobile Banking Imperative” Forrester report.
14
Source: Forrester’s North American Consumer Technographics Online Benchmark Survey (Part 1), 2015.
Forrester forecasts that 1 million US B2B salespeople will lose their jobs to self-service eCommerce by the year 2020.
15
While B2B buyers overwhelmingly prefer to research, and increasingly buy, products and services via a self-service
website, B2B sellers still force buyers to interact with their salespeople as part of the purchase process. This report
describes how and why B2B eBusiness and channel strategy professionals must radically transform their historical
sales models to accommodate a real-time and global buying environment where websites, not salespeople, are at the
heart of how B2B companies buy and sell. See the “Death Of A (B2B) Salesman” Forrester report.
Source: Forrester/Internet Retailer Q1 2015 US B2B Buyer Channel Preferences Online Survey.
16
Source: “Agriculture Technology Solutions,” John Deere (https://www.deere.co.uk/en_US/campaigns/ag_turf/

17
farmsight/farmsight.page).
Bitcoin has attracted significant attention in recent months from entrepreneurs, journalists, consumers, merchants,
18
and government entities. eBusiness executives, especially at banks and retailers, are puzzled by Bitcoin, the first
crypto-currency, a new method of value exchange via the Internet, and are struggling to understand its value to and
potential impact on their businesses. In this Q&A document, we provide clarity on the current facts around Bitcoin, our
prognosis for its future, and the impact that virtual currencies will have on the retail and payments landscape overall.
See the “Bitcoin: Some Parts Brilliant, Some Parts Sure To Bomb” Forrester report.
Business-to-business (B2B) digital ecosystems drive a fundamental shift in the way companies cooperate and
19
compete with one another. Through the continuous exchange of information and the collaboration around data
businesses, CIOs can drive faster innovation, more efficient production, and more agile go-to-market activities. In turn,
this has big strategic implications for CIOs and their business technology strategies. Digital ecosystems empower
the CIO to become a critical business enabler by providing a technology platform to redefine approaches toward
innovation, knowledge management, supply chain optimization, product development, and sales and marketing. CIOs
who define a clear strategy to exploit the possibilities that digital ecosystems offer for their organizations position
themselves as powerful change agents. This report, which focuses on B2B ecosystems, is the first in a three-part
series and helps CIOs develop a successful technology strategy for digital ecosystems. See the “Use The Power Of
B2B Digital Ecosystems” Forrester report.
Source: “Milestone — DriveNow with 500,000 customers,” DriveNow press release, September 14, 2015
20
(https://prod.drive-now-content.com/stage/fileadmin/user_upload_uk/12_Presse/Pressemitteilungen_PDF/
Englisch/2015/2015.09.14-DriveNow_500.000_customers.pdf).
Source: “Argos business review,” Home Retail Group (http://www.homeretailgroup.com/ar/2015/strategicreport/argos/

21
default.shtml?tab=4).
Even companies that make customer experience a strategic priority struggle to implement major long-lasting
22
improvements. That’s because they fail to connect behind-the-scenes activities to customer interactions. These
firms need a new approach to customer experience management: one that considers the influence of every single
employee and external partner on every single customer interaction. Forrester calls this complex set of relationships
the customer experience ecosystem. To fully understand how they deliver customer experiences today and create a
vision for meaningful improvements going forward, customer experience professionals must discover how to map their
company’s customer experience ecosystem and adopt best practices from the emerging field of service design. See
the “The Customer Experience Ecosystem” Forrester report.
Business leaders don’t think of digital as central to their business because in the past, it hasn’t been. But now your
23
customers, your products, your business operations, and your competitors are fundamentally digital. While 74% of
business executives say their company has a digital strategy, only 15% believe that their company has the skills and
capabilities to execute on that strategy. A piecemeal strategy of bolting on digital channels or methods is no longer
sufficient. As an eBusiness leader, you know change is needed. You must take the lead on driving digital business
transformation. You must think of your company as part of a dynamic ecosystem of value that connects digital
resources inside and outside the company as needed to compete. You must harness digital technologies, both to
deliver a superior customer experience and to drive the agility and operational efficiency you need to stay competitive.
This report was originally published for CMOs, but as many firms are turning to their eBusiness leaders to define
their digital strategy, this report is a must-read for eBusiness professionals. See the “The Digital Business Imperative”
Forrester report.
24
Mobile banking is the future. Yet many banks still haven’t embraced its full potential, adopting a new version of the
past instead. Turkey’s Garanti Bank has taken a different approach, integrating a number of innovations such as
mobile payments, mobile money management, merchant-based offers, and voice control into its new mobile banking
app, iGaranti. The new app was launched in May 2013, but the events preceding it were as important as the new
features themselves. The bank went through a rigorous process of rethinking its mobile banking offering, researching
its customer needs thoroughly, and aligning the mobile services to them. Read this report to learn more about the
process of revamping the mobile banking experience. See the “Case Study: iGaranti Reimagines The Mobile Banking
Experience” Forrester report.
25
Source: Nicole Giannopoulos, “CVS Mobile Strategy Delivers 250% Jump in Traffic,” Retail Info Systems News,
January 7, 2014 (http://risnews.edgl.com/retail-best-practices/CVS-Mobile-Strategy-Delivers-250--Jump-in-
Traffic90390).
26
Source: “BBC Sport breaks online records with first truly digital Olympics,” BBC, August 13, 2012 (http://www.bbc.
co.uk/mediacentre/latestnews/2012/olympic-online-figures).
27
Since big data exploded onto enterprises’ radar in 2011, enterprise architects have been busy asking questions,
such as: “What is it?” “Do I have it?” and “Is there something different I need to do?” Many of these questions can
now be answered by looking at the best practices that leaders are demonstrating. In 2015, big data buzz will settle
as technology management and businesses seriously invest in this technology and discover what works and what
doesn’t. But big changes are brewing underneath the smoothing surface that enterprise architects and vendor
strategists must understand and prepare to navigate. This report builds on a number of the big data predictions
reports published in late 2014 and provides a top-level view of what is going to happen in 2015 as firms seek to turn
big data into business insight. See the “Brief: Turning Big Data Into Business Insights, 2015” Forrester report.
28
Source: “Asos,” wnDirect (http://wndirect.com/casestudy-asos-russia.php).
29
Source: “Annual Report And Accounts 2014,” Asos, February 8, 2015 (http://www.asosplc.com/~/media/Files/A/
ASOS/results-archive/ASOS_Report_2014%20FINAL.pdf).
30
Application programming interfaces (APIs) are perhaps the most critical technology in digital business design. They
have the power to unlock new revenue streams, transform how you design and deliver change, and extend your value
proposition via dynamic ecosystems of value. But digital business design is a highly technical domain awash with
jargon and misconceptions and one in which the underlying technology capabilities fundamentally drive and constrain
business model design. Neither eBusiness nor technology management teams can build a successful API strategy in
isolation — collaboration is key. In this document, we present a framework to help eBusiness executives cut through
the confusion, identify how APIs can add value to the business, and collaborate with their technology management
colleagues in building an API strategy that will power their digital business transformation. See the “Brief: Four Ways
APIs Are Changing Your Business” Forrester report.
Digital disruptors are tearing up the rule books, and no industry is immune. In response, firms must take a different
31
approach to digital strategy, embedding digital capabilities into the heart of their business, rather than treating digital
touchpoints as peripheral add-ons. They must become lean, agile, and digitally savvy. For many firms, this means a
fundamental transformation of their culture, their organizational structures, their technology platforms, and their approach
to measuring success. Many firms have taken the first step on this journey by consolidating digital functions such as
digital marketing and eBusiness under one leader. But as a digital business leader, where do you start? How do you
plan your digital business transformation, and how do you know where to focus your efforts? Forrester’s digital business
maturity model answers those questions. It plots your organizational maturity and helps guide your actions to elevate
your digital capabilities. See the “Enhance Your Digital Capabilities With The Digital Maturity Model” Forrester report.
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For EBusiness & Channel Strategy Professionals

Understand The Digital Business Landscape

Why Read This Report Key Takeaways

eBusiness Professionals Must Become Digital

Understand The Digital Business Landscape

Table Of Contents Notes & Resources

Digital Competitors Thrive

Digital Businesses Are Designed Differently

Digital Businesses Have The Advantage Over

15 Digital Business Demands Transformative

eBusiness Leaders: Your Company Needs

17 Don’t Build A Digital Strategy; Digitize Your

Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA

In The Age Of The Customer, Business Is Digital

Digital content (video, editorial,

FIGURE 2 Digital Disruption Is A Significant Threat For Most Firms

Not disrupted 6% In the next 12 months

Somewhat disrupted 29%

Moderately disrupted 30%

Massively disrupted 23%

Base: 797 executives in companies with 250 or more employees

Source: Forrester/Odgers Berndtson Q3 2015 Global Digital Business Online Survey

Digital Customers Are The Norm

FIGURE 3 As Digital Engagement Increases, The Influence Of Traditional Touchpoints Declines

• 67% of US online adults read print magazines every week,

• 86% of all US online adults are broadband users.

• 70% of all US online adults use a smartphone.

Source: Carrefour mobile app and website

Digital Competitors Thrive

No industry is immune to digital disruption. eBusiness professionals at manufacturers like L’Oréal

FIGURE 5 Fidor Bank Engenders Trust Through Social Engagement

Source: Fidor Bank website

Digital Transforms Business Models

FIGURE 6 DriveNow Creates A Digitally Powered Revenue Stream For BMW

Source: DriveNow UK website

Welcome To The Post-Digital Future

eBusiness Leaders Must Become Digital Co-Creators

FIGURE 7 eBusiness Professionals Play A Pivotal Role In Co-Creating Digital Strategy

The eBusiness leader provides vision and strategy

The eBusiness leader and team simply execute

The eBusiness team is barely involved

Base: 51 eBusiness and channel strategy professionals

Digital Businesses Are Designed Differently

FIGURE 8 Digital Businesses Master Customer Experience And Operational Excellence

Digital Businesses Have The Advantage Over Traditional Competitors

FIGURE 9 Digital Leaders Must Rethink Their Competitive Advantage

Agile and dynamic Not . . . Fixed and static

Customer-centric Not . . . Functionally siloed

Technologically Not . . . Legacy-constrained

Data-driven Not . . . Ad hoc

FIGURE 10 iGaranti Builds A Digital Ecosystem To Bring New Products To Market

Voice navigation Merchant-funded offers

Digital Business Demands Transformative Action

eBusiness Leaders: Your Company Needs You!

FIGURE 11 Digital Is A Boardroom Topic

CEO 12% Vision

Chief digital officer/SVP of digital 3%

Chief customer officer/SVP of customer 3%

SVP of eCommerce/online sales 2%

Base: 1,624 executives in companies with 250 or more employees

Source: Forrester/Odgers Berndtson Q3 2015 Global Digital Business Online Survey

Don’t Build A Digital Strategy; Digitize Your Business Strategy

Engage With An Analyst

Analyst Inquiry Analyst Advisory