$2 Trillion: The Digital Prize

By 2016, the Internet is going to influence 50% of all retail transactions. Running the numbers, that adds up to about $2 trillion. This isn’t people just buying products online. It’s people checking prices on their smartphones, reading reviews online, pinging their friends on social media – all the actions customers take when deciding to buy something.

Given the relatively brief time the Internet has been mainstream – we’re just moving into its second generation – its impact is phenomenal. While few would debate that the digital revolution has radically reshaped how customers behave, the scale of the change is much more significant than companies realize. The age of experimentation is over. The age of becoming a truly digital is just beginning.

In an article I recently co-authored (Digitizing the consumer decision journey) with Edwin van Bommel and Kelly Ungerman, we introduced the idea of a company developing its DQ: Digital Quotient. Your DQ is a factor of how well defined your long-term strategy is, your effectiveness in implementing that strategy, and the strength of your organizational infrastructure and information technologies.

In practice, this comes down to a company’s ability to Discover, Design, and Deliver. You’ll want to read our piece on these Three Ds (Discover, Design, Deliver: 3D marketing & sales for above-market growth) to dig into what we mean in more detail, but here is an overview:

- Discover. The ability to sift through data to extract meaningful insights that help you make better decisions. This means have both a 360-degree view of your customers and a deep understanding of the opportunities in the marketplace.

- Design. The ability to use discovered insights to create compelling and relevant customer experiences.

- Deliver. The ability to engage effectively with customers at any contact point along their decision journey. Doing this well requires not only the systems to deliver the experiences to the customer but also people with the right skills working together to support those systems.

What’s really important to understand is that you need to be firing on all three Ds to be an effective digital organization. Just getting one or two of them right won’t be enough.

I’d love to hear from the community what you think is required to have a high DQ. What have you found is most meaningful set of DQ capabilities to win in the marketplace?

You can learn more about the customer decision journey and digital marketing on our McKinsey on Marketing & Sales site. Keep up with our latest by signing up for our newsletter and follow us on Twitter @McK_MktgSales. And please follow me on Twitter @davidedelman.

[Image: ansik, Flickr]