There’s a lot to learn from industries that have already transitioned from analog to digital
In the last decade, the way consumers interact with various industries has been completely overhauled. Many legacy businesses have moved away from analog processes to keep up with digital native companies. Those that haven’t yet made the switch are concerned about losing market share to competitors. In other words, the digital transformation is already here, and it's well past time to join the movement.
For those just beginning the digitalization journey, there’s good news. You can avoid common pitfalls by studying the industries that have already transformed. This will give you an advantage as you shift your analog processes to the digital sphere.
Digitalization isn’t just a buzzword — it’s the present for industries around the world. Read our comprehensive guide to make sure your business is on track.
Digitalization examples: 5 industries leading the transformation
Retail
Two decades after the dot-com bubble burst, one of its biggest drivers — Amazon — remains the undisputed leader in online shopping. Once primarily a bookstore, Amazon now sells millions of products across a number of industries. While Amazon and other online retailers remain a convenient option, younger generations are starting to turn away from the “jack of all trades” approach to online shopping in favor of specialized direct-to-consumer (DTC) companies.
The resulting rise of digital native retailers reverses the “big box store” trend. Instead of offering everything, they offer one thing — and they do it well. For example, Warby Parker disrupted the eyewear market when it launched in 2010 by offering stylish frames at reasonable prices. Purple started out as a crowd-funded online mattress company with clever marketing that called out a stagnant industry. Groceries, pet supplies, and even cars can be bought and sold entirely online. Amazon may still be the leader in ecommerce sales, but more and more specialized retailers are finding success by carving out their own niches in the marketplace.
Transportation
On a snowy Paris night in 2008, Travis Kalanick and Garrett Camp couldn’t find a taxi. The duo found themselves wishing they could just order a ride from their phones. That inconvenience led to the birth of Uber and the upheaval of the transportation industry. By 2014, Uber was available in over 100 cities around the world. Meanwhile, competitors like Lyft ensured that the future of car service was digital.
This digital transformation had a ripple effect on the rest of the industry. Uber and Lyft quickly overtook rental cars and taxis in popularity, and legacy companies were forced to adapt. Many cab companies adopted policies like upfront pricing to stay competitive. Companies like U-Haul now offer mobile pickup and return to make moving easier. The age of sticking out an arm to hail a cab is over; modern consumers expect to make these transactions on their phones.
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Restaurants
Just over a decade ago, those hoping to eat restaurant-quality food at home had two options. They could call their favorite spot, order dinner, and go pick it up. Alternatively, they could order delivery from the few places in their area that provided the service, typically pizza parlors. That all changed with the rise of delivery app DoorDash and its competitors, which employ contractors to pick up orders from eateries and deliver them to the designated location.
The reinvention of food delivery has led to a second digital transformation: the ghost kitchen. In cities like Los Angeles, these “virtual restaurants” have no physical storefront. They exist solely for the purpose of food delivery, providing customers with varied and high-quality eats without the overhead and infrastructure costs of an in-person restaurant. Even existing restaurants are venturing into ghost kitchen territory to experiment with new menu items or different types of cuisine. These days, whether you’re in the mood for a burger, sushi, or tacos and margaritas, you can have it brought right to your door.
Fashion
Personal stylists used to be a luxury associated with celebrities and the ultra-wealthy. Then came Stitch Fix, a subscription service founded in 2011. Billing itself as a digital personal stylist, Stitch Fix collects consumer data about style and fashion preferences and uses it to put together bespoke looks for subscribers. Customers then receive a regular shipment of clothing and accessories picked especially for them, all for a small styling fee that can be applied to any purchases. Fashionistas buy what they want and return what they don’t, filling out their wardrobe without ever leaving the house.
That’s not the only way the digital transformation is making fashion more accessible. Rent the Runway started as a campus pop-up shop where college students could borrow high-end apparel — for a price. Nearly 15 years later, “shared designer closet platform.” In FY2022, Rent the Runway brought in $296.4 in revenue. At its core is a simple idea: What if you could rent an expensive dress for a one-time event instead of spending hundreds or thousands of dollars? These days, subscribers who pay the monthly fee can rent a certain amount of items from designers like Tory Burch, Zac Posen, and Diane von Furstenberg.
Travel
Of all the industries affected by the digital transformation, perhaps none have changed as drastically as travel. In just a few decades, the way we book and experience time away from home has been completely reinvented, turning a once-arduous process that required professional help into a digital DIY that can be completed in minutes.
The year is 1990, and you’re planning a trip. To find flights in your timeframe and price range, you go to a travel agent, who handles the booking for you. The agent also books hotels, transportation, tours, and anything else you might need to plan for your getaway. After an hour or two at the agency, your trip is booked, and you have the paperwork and receipts to prove it.
Time travel to 2001, and you’re planning a trip. You visit a website like Booking.com to compare flight and hotel prices before booking them yourself through the website. You can print out the confirmation at home and bring it to the airport with you.
Now, you’re in 2023, and you’re planning a trip. You open up your preferred airline’s app, where all of your travel and payment information is already saved, and look at flight options before tapping to confirm. Then you switch over to AirBnB to find the perfect vacation house that crosses off every item on your wishlist — plenty of bedrooms, a pool, a game room. You text the information to everyone in your travel group. No one’s worried about transportation; you’ll just order an Uber when you get there. The whole experience is digital.
Getting started with digitalization
The digital transformation doesn’t happen overnight. It typically starts with a few simple steps and grows from there. If your digitalization journey is just beginning, heed the hard-earned lessons learned from the industries that have already made the switch:
- Find a vertical ripe for disruption. What processes in your day-to-day life still feel archaic, clunky, or unnecessarily expensive? Many digital native brands started with a “What if” question inspired by real-life events, so draw inspiration from your own experiences.
- It’s all about connecting with customers. The reason many digitalization efforts succeed may be because their founders understand modern consumer expectations. Younger generations increasingly expect intuitive digital experiences, and digitalization experts have capitalized on that.
- Invest in the right tools. Reducing the need for analog processes can save companies money on overhead, infrastructure, and administrative staff. Reinvest that savings into your digital transformation. That might mean hiring a digitalization consultant to guide the process or upgrading your office technology, depending on your situation.
For more guidance on digital transformation, check out The Essential Digital Transformation Checklist: A Beginner’s Guide to Digitizing Your Business.
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