Building Digital Resilience Around

the Customer

By Joerg Niessing , INSEAD; David Dubois , INSEAD; and Alain Bejjani , Majid Al Futtaim

Resilient businesses use digital technologies, data and analytics to

create long-term customer value.

The ongoing crisis has both brought digital resilience to the forefront and
broadened its meaning. This idea originally emerged in the area of
cybersecurity and reflected the need to upgrade and maintain IT capabilities
to resist cyber-attacks.

Since the Covid-19 crisis, digital resilience increasingly refers to the strategic
use of digital technologies in delivering customer value and business growth
despite adversities. Indeed, some industries – such as hospitality, higher
education or traditional retail – were hit more than others because they did
not embed digital technologies and analytics early or strongly enough.

In building resilience, the customer-centric perspective is critical. Only

companies that leverage digital technologies and data to engage with
customers more effectively, enrich customer experiences or offer innovative
customer-centric business models will create long-term growth.

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INSEAD’s upcoming case study on Majid Al Futtaim (MAF), the Middle East’s
leading shopping mall, retail and leisure pioneer, explores this issue further.
Despite Covid-19’s impact on many of MAF’s industries, like shopping malls,
entertainment and grocery retail, the conglomerate’s digital readiness, which
had been ramping up for years prior to the pandemic, significantly limited
the negative effects.

But how did a company whose business model is based on brick-and-mortar

activities tied to leisure and lifestyle plan its transformation? The secret
sauce includes three ingredients: a company-wide change in mindset, the
development and integration of analytical skillsets and the adoption of a use
case methodology across test-and-learn outsets.

Digital leadership

CxOs often report that their digital transformation efforts fail. Of the 1,350
senior executives Accenture interviewed for its digital transformation study
in 2019, 78 percent failed to exceed their return on digital investment goals.
The primary reason is that digital efforts tend to be embraced at either the
top or the bottom of the organisational hierarchy, without coordination and
often within silos.

In MAF’s case, one of the authors (Bejjani) actively became the top-down
champion of the initiative. He provided a clear upfront commitment with
defined objectives, while emerging tech talents were given crucial seats at
the table to help drive change. Together, they created a Centre of Excellence
(COE) for Advanced Analytics bridging all relevant silos and hierarchical
levels – a kind of open analytics practice that would act as a data broker
across the group. This centre quickly became the “nervous system” for the
company’s transformation.

Data & analytics foundation

To effectively collect data and turn them into insights, MAF recruited four
different types of tech talents that started working together and in
coordination with the business units.

The first type – data engineers – are responsible for collecting, processing
and cleaning data to make them available for downstream analytics, in real
time when possible. Next, business intelligence experts are focusing on
making sense of data from a business perspective (“What does this mean for

Copyright © INSEAD 2024. All rights reserved. This article first appeared on INSEAD Knowledge: https://knowledge.insead.edu
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our market?”). Business intelligence experts are seasoned data analysts who
also turn to asking “why” questions, testing assumptions and enabling data
visualisation. Further, data scientists take on more advanced investigation
and prediction responsibilities, design A/B testing and formulate
recommendations. The last critical role is that of the business partner. Acting
as a “translator” or connector, that person helps to transform business pain
points into technical solutions.

These four talents interact in an end-to-end process that translates raw data
into learning that are at first descriptive and, through further refinement and
iteration, become prescriptive. Together, tech talents leverage AI to trace
correlation (what variables – from search to sales – covary together) and
causation (what factors cause a change in attitude or behaviour). For
example, correlation-based algorithms can reveal patterns in customers’
digital shopping habits, which prescriptive models can use to measure the
profitability of various product combinations in physical or virtual retail
environments.

Digital use case approach

Effective transformation takes place through the successful spread and

adoption of data-driven use cases that generate actual customer value. From
the very beginning of MAF’s journey, the COE’s task was to work together
with business unit leaders to turn highly specific business challenges into a
concrete use case with crystal-clear KPIs. A typical collaboration between the
COE and the business units would entail data collection, field tests (A/B
testing), clear KPI setting and possibly organisational changes to ensure
what used to be siloed roles now work in “agile squads”. Use cases are
prioritised based on the relative value to the organisation of the associated
KPIs as well as their feasibility (data availability, technical capabilities and
implementation potential).

This approach produced a string of dramatic successes. For example, an

assortment optimisation pilot programme run through Carrefour stores in
Dubai (MAF operates the French retail brand in 17 countries) increased
revenue by US$10 million in the second half of 2019.

To further strengthen the data-driven momentum and collect customer data

on a wider scale, MAF launched loyalty programme SHARE in 2019. By
generating omnichannel customer profiles and de-siloing data across the
conglomerate, it enabled deft targeting of lapses in the customer journey.

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For example, the analytics centre noticed a soft conversion rate through the
Carrefour website for visitors responding to specific marketing campaigns.
After the problem was traced to customers having forgotten their login
information, the team was able to resolve the issue and raise the purchase
completion rate considerably.

The company’s cinema arm, VOX Cinemas, increased the spend per head for
F&B sales, a key customer profitability metric, by 3 percent in just three
weeks by rolling out new snack combos based on novel insights from
existing purchase data.

Overall, MAF’s use cases range from relatively simple and concrete (e.g.
optimising SKU mix) to more ambitious and long-term (e.g. data-powered
solutions like scan-and-go that facilitates in-store payment processing). The
road to a data-driven digital transformation starts with BI (business
intelligence), then proceeds to AI, to arrive at EI (extended intelligence, or
decision support systems). Majid Al Futtaim’s strategy is to have humans
leading and machines learning.

Continually enhancing customer value

Over time and thanks to its use case approach, MAF has become a data-
driven firm whose business units are equipped with a “digital memory” that
enables them to keep a log of past tests and keep on improving. Being data-
led not only improves effectiveness internally and delivers more customer
value, it also opens the possibility to pivot MAF’s business model beyond its
traditional verticals. Because the company knows its clients inside out, it can
create new data partnerships that will benefit the broader ecosystem.The
patterns revealed by the MAF case are no outliers. In fact, these best
practices and transformation guidelines are also present in other successful
organisations. Building digital resilience starts with an analytics
transformation, which entails building first a dataset, a mindset and a skillset
to build use cases. Along the way, each organisation will meet its own
challenges. Still, we believe that significant growth awaits any company that
successfully completes its digital journey – especially if it stays laser-focused
on how data and digital tech could empower company collaborators in the
service of the customer.

Find article at
https://knowledge.insead.edu/marketing/building-digital-resilience-around-customer

Copyright © INSEAD 2024. All rights reserved. This article first appeared on INSEAD Knowledge: https://knowledge.insead.edu
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About the author(s)
Joerg Niessing is a Senior Affiliate Professor of Marketing at INSEAD. He co-directs the Leading
Digital Marketing Strategy and B2B Marketing Strategies programmes at INSEAD.

David Dubois is an Associate Professor of Marketing at INSEAD and the Cornelius Grupp Fellow in
Digital Analytics for Consumer Behaviour. He is the Co-Director of the Leading Digital Marketing
Strategy and the Driving Digital Marketing Strategy programmes.

Alain Bejjani is the Chief Executive Officer of Majid Al Futtaim Holding, the leading shopping mall,
retail and leisure pioneer across the Middle East, Africa and Asia.

Copyright © INSEAD 2024. All rights reserved. This article first appeared on INSEAD Knowledge: https://knowledge.insead.edu
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