What is digital innovation?

Technology’s rapid advances give today’s businesses more tools than ever to succeed. Deloitte research shows that companies fully embracing digital innovation reported annual net profit margins and revenue growth at rates far higher than the industry average. This trend held across multiple industries, showing the widespread reach of digital innovation trends. So, what is digital innovation and how can you create a strategy that works for you? Here’s how to take the first steps.

What is digital innovation?

Digital innovations include any digital initiatives implemented to improve a business’s everyday activities and bottom line. Examples of these initiatives include things like new software, apps, platforms, cloud-based services, artificial intelligence, and automation.

By making the transition from analog to digital, businesses can solve their problems and change the way they perform with greater efficiency. At the same time, embracing digital innovation means you’ll be able to pivot according to industry trends. Improve customer experiences and products using the latest data-driven technology.

Digital innovation examples

You’re probably already familiar with some of today’s most prevalent digital innovation trends. Companies are increasingly using tools like wearable devices, virtual reality, chatbots, and data intelligence to provide a more customized customer experience. Here are a few specific digital innovation examples to consider:

1. Dominos

One of the most-used examples of a successful digital innovation strategy is Dominos Pizza. During the Covid-19 pandemic, Dominos used this opportunity to invest heavily in its mobile app and contactless delivery systems. Rather than phoning or placing orders in person, customers could place orders using a wide range of apps as well as Facebook Messenger, Alexa, and Twitter platforms. With its own delivery platform in place, Dominos fulfilled orders digitally without relying on third parties like Uber Eats or DoorDash.

2. IKEA

Swedish home furnishings giant IKEA has always been known for embracing the latest digital technology, using tools like virtual reality and detailed 3D online catalogs. More recently, it partnered with TaskRabbit to match customers with local freelancers willing to build their flatpack furniture.

3. Walmart

Known for its big-box stores, Walmart needed to find a way to harness the growing ecommerce market while maintaining its brick-and-mortar presence. To do this, it rolled out a new mobile app allowing customers to make a digital shopping list and then receive custom guidance once inside the store. This omnichannel shopping experience combines with automated inventory systems for greater efficiency.

Understanding digital innovation vs. digital transformation

Digital transformation and innovation are sometimes used synonymously, but there are a few key distinctions to make. Digital transformation describes a long-term strategy to change a business’s organization at four levels and offers its own benefits. By contrast, digital innovation could be a single change brought in to solve a specific problem. While digital innovations can be part of a wider transformative strategy, the two terms differ slightly – though both are important.

What are the benefits of digital innovation?

We’ve become accustomed to using digital services, both as consumers and businesses. Whether it’s booking your next vacation using Airbnb or calling an Uber to shuttle you home from a concert, digital apps and platforms are everywhere. If your business doesn’t offer the same convenience of these services, you run the risk of falling behind more efficient competition. Here are just a few advantages of digital transformation and innovation:

• Stand out from the competition with new product launches

• Keep up with high customer expectations by giving a personalized user experience

• Boost productivity using automation and analytics

• Create centralized systems for a more efficient workplace

How to create a digital innovation strategy

To make the most of today’s digital innovations, you’ll need to first identify areas where your business could benefit. Look for trouble spots, areas of inefficiency, or friction in the user experience. How could you make your customer experience better? A Salesforce survey found that three-quarters of customers wanted companies to use new technology to provide better service.

The next step is to look for the right software and technology that will solve these problems through digital innovation. Think not only about your customers, but also organization-wide including factors like cloud access and product development. Using digital innovation and transformation best practices will help differentiate your business from the competition and help you move forward.

Finally, as you compare various platforms and software options, make sure they work together. For example, GoCardless integrates with over 350 partners including Salesforce, Zuora, Xero, and more to ensure a joined-up workflow across multiple departments. As your business grows, you want a fully integrated platform to increase productivity and give you greater control over digital initiatives.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.