Why Digital Innovation is Essential for Maintaining Market Share
Brands that want to get ahead in a global recession should boost their digital innovation budget.
In times of escalating inflation and rising interest rates, cutting marketing spend seems like a no-brainer.
During a recent survey of 410 marketing leaders, Gartner found that marketing budgets have fallen from 9.5% last year to an average of 9.1% of a company’s total revenue in 2023, with 75% of CMOs reporting that they’re looking to trim their tech investments this year to deliver better ROI.
But here’s the twist: while it may seem tempting to follow the crowd, Gartner also found that marketers sacrificing tech spend are sabotaging their digital innovation, with tech utilisation capabilities falling by 25% among firms since 2020.
“Despite turbulent budgets in previous years and current economic headwinds, tech investments are a priority for CMOs and proving their ROI is more crucial than ever. The challenges associated with martech underutilisation, such as new business models and disrupted customer journeys, make it difficult for marketers to demonstrate technology’s value.” –Benjamin Bloom, VP Analyst in the Gartner Marketing practice.
So, cutting tech spending isn’t the answer. Instead, investing wisely in the right digital innovation strategies should be your secret weapon for boosting market share in an uncertain economy.
What is digital innovation?
Digital innovation is simply the process of bringing companies not only up to speed with the digital world but also using digital innovators to push the boundaries of what’s possible. All in the name of industry and business growth.
According to McKinsey, while companies around you may be tightening their belts, adopting a growth mindset and investing more in brand development and digital tools will make you 97% more likely to edge ahead of your competitors.
Staying top-of-mind with consumers through initiatives like cross-platform app development ensures you’re optimising resources while experimenting with exciting new value propositions.
The first step in identifying your digital innovation priorities is to look into business areas where embracing change can help you win market dominance. Define what the essence of digital innovation means to your brand. For instance, it might be:
Check out the benefits through digital innovation examples
While digital innovation is a broad field, in terms of business growth, there are a number of examples that prove its benefits:
Navigating market dynamics as digital innovators
Expanding market reach was cited as a top priority for 36% of CMOs polled by Deloitte this year. Adaptability is a crucial benefit of digital innovation, as it empowers organisations to stay relevant and evolve with customer expectations.
For example, in this previous blog post, we examined Gen Z’s apparent reluctance to sign up for loyalty programs, as many find these digital initiatives old hat. As the first generation of digital natives, consumers aged 18-24 are flooded with options, so expect brands to deliver monetary as well as emotional value. So, the more value your digital innovators bring to the table, the more likely you are to resonate with audiences and keep your brand on their radar.
Optimising costs is another key aspect of digital innovation. Simply put, improving digital outputs from the ground up eventually saves companies from wasting time and effort on the development of ageing processes. Investing in digital innovation in this area not only helps to cut development costs, but it also provides a blueprint for planning and scaling digital transformation projects across the company.
Digital innovation can disrupt industries.
Take the Netflix team as an example of pioneering digital innovators that have disrupted an entire industry. Through digital innovation, Netflix changed how we engage with content by making films and TV shows more convenient and affordable. Its multi-platform app helps Netflix sustain its customer loyalty by collecting data and experimenting with video recommendations and new features to keep viewers engaged.
- 4 ways brands can break through digital sameness
- Did Gen Z kill the loyalty program?
- Netflix and binge: how the streaming giant got us hooked
The technical building blocks of digital innovation
Data analytics: Gaining valuable insights into market trends, competitor offerings, and emerging opportunities empowers brands to make informed decisions. Winterberry Group predicts a 30%+ increase in data and analytics spending by 2026 across the U.S. and Europe.
Automation and personalisation tools: Machine-learning and AI-driven tools are essential for companies looking to provide hyper-personalised services at scale. According to a survey by MIT Technology Review, investment in AI-driven enterprise technologies is expected to grow by 25% over the next two years.
Cloud computing: Cloud migration streamlines digital innovation practices by providing on-demand access to digital resources and fostering a culture of collaboration – essential for testing and refining ideas. Gartner predicts that, by 2025, more than half of enterprise IT budgets will shift to the cloud.
Incorporating examples of digital innovation into your business model
Prioritise experiences that add value to your customers’ lives and generate brand loyalty through its unique benefits. Understanding what makes your audience tick is essential for developing and evaluating innovative ideas.
AI budgeting app Cleo, for example, polled its Gen Z audience on their favourite ways to get roasted for their bad spending habits. The research into scathing one-liners informed their app’s tone-of-voice, with ‘Roast Mode’ becoming one of Cleo’s most well-loved app features.
Be iterative and data-driven
Becoming an innovative, market-leading company is about more than just having a clear vision and the technical skills to bring ideas to fruition. Digital innovators must deliver positive, quantifiable results throughout the development cycle to win stakeholder buy-in and keep everyone on the same page.
In one of our recently held panel discussions, Matt Harris, Director of Digital Product at Sky, highlighted the importance of starting small, iterating concepts often, testing, and learning from mistakes. This approach enables CSuite stakeholders to overcome inertia and get behind value propositions that deeply resonate with their customers.
Be all about outcome, not output
Remember, digital innovation and market share growth are journeys, not destinations. Partnering with digital innovators that can work as an extension of your team is critical to expanding your market share bit by bit.
At Future Platforms, we build, ideate and accelerate digital products designed to improve the customer experience, delight audiences and increase loyalty. To find out more about Future Platforms and how we help brands achieve their digital innovation goals, get in touch.