Digital Transformation: why you can’t risk getting left behind
Historically, it was innovative for casinos to have a digital transformation strategy; in today’s world it’s crucial for survival, writes Ashley-Christian Hardy – Director of Product & Design at Gaming Innovation Group (GiG).
Not to get into a history lesson, but the online gaming industry has been going through digital transformation for a while. Ever since the first online casino went live in 1994 due to the Free Trade & Processing Zone Act passing in Antigua, and the first online provider becoming established.
At a high level, I would say there are 3 key elements to digital transformation in online gaming:
- Operators going online to expand their customer base and make gaming more accessible
- Providers innovating to bring products, platforms, services and new innovations to the industry
- Regulation coming into effect to govern the industry at a market level.
Digital transformation is not limited to gaming, in fact it is a global transformation that is affecting every industry. And there are many different levels to it. Many of the pioneers of the digital revolution (many of which can be referred to as digital natives, where their business model has been born in the digital world), have been delivering more convenient, responsive and engaging experiences for customers and often disrupting entire industries whilst doing so.
The use of digital technologies such as cloud, mobile and analytics means that organisations now have the means to continuously evolve and scale at speeds that were previously unthinkable in traditional brick and mortar business models. It’s not just about innovation anymore. Digital transformation is crucial for survival in any company.
The Ultimate Example of Technology Disrupting a Marketplace
There are many occurrences in history of companies not embracing digital transformation and either losing customer base or worse having to close down. The ultimate example of technology disrupting a market place is the battle for customer entertainment.
There was a time when Blockbuster ruled supreme for delivering entertainment to people’s homes. For video and DVD rentals, they were the kings of their domain and no one came close to them. When Netflix was founded, offering its video rental-by-mail service, the classic case of David vs. The Goliath story was born.
In 2000 Netflix co-founder and CEO Reed Hastings approached Blockbuster’s then CEO, John Antioco, with a merger proposal realising that it’s easier to fight alongside Blockbuster than against them. At this time, Hastings wanted $50 million for Netflix. And as part of the deal, the Netflix team would run Blockbuster’s online brand.The deal never materialised, as Blockbuster famously laughed in the face of Hastings and his team when they met to discuss the deal. Antioco considered Netflix to be a small fish and did not believe that online was the future of the industry.
In 1999, Netflix received backing from Groupe Arnault, giving them a $30 million cash injection that helped launch its subscription-based service. In 2004, Blockbuster did launch an online DVD rental service eventually, and even abandoned their unpopular (but lucrative) late fees for overdue rentals. By 2006, subscribers for Blockbuster’s online services had grown to more than 2 million. In that same year, the number of Netflix subscribers reached 6.3 million.
In 2007, Antioco left Blockbuster, late fees were reinstated, and Blockbuster’s online efforts were deprioritised. In 2008, Netflix signed a deal with Starz, to stream around 1,000 movies and shows on its service.
Following on from this, In 2010, Netflix signed deals with names like Sony, Paramount, Lionsgate, and Disney to help them grab a 20% market share of North American viewing traffic. On July 1st of the same year, Blockbuster was delisted from the New York Stock Exchange and filed for bankruptcy having incurred nearly $1 billion in losses.Netflix’s valuation at the time? $24 million.
Ultimately, Netflix can be described as a leader in digital transformation. Not only did they recognise the power of data and the need to create something new for the future, but they understood the importance of becoming a data-driven business and how that would allow them to migrate from a traditional business model to a successful digital transformation where user experience and personalisation was placed at the heart of their business.
Some other takeaways from this cautionary tale:
- Never forget what you are selling and to whom, Blockbuster dominated the home entertainment industry for many years, but lost sight of what business they were actually competing in. Instead of focusing on the best way to deliver entertainment to people’s homes they were comfortable with their business model and assumed that would always be the case.
- You need to be willing to adapt, and half measures will not succeed in the long term. Eventually Blockbuster did try to compete with Netflix but it was too little too late. Blockbuster did not take advantage of the latest technology advancements, to adapt to users’ ever-increasing needs.
- The customer driven approach always wins. By putting the customer at the center of your processes, organisation and culture, and optimizing for their happiness, you can safeguard against having a Blockbuster-like meltdown.
What does a Digital Transformation Strategy Look Like?
There are 4 key areas to a digital transformation strategy, which all must be built around intelligent systems and products.
- Empowering employees
- Engaging your customers
- Optimising your operations
- Transforming your products
Engaging with customers
You may have noticed that today’s customers are a lot different than the older generations of customers. Customers are now much more aware, technologically advanced, and have the resources to do market comparison. It is a bad idea to try to sell products with old tactics. These tactics include bombarding the customer with piles of information or making a fool out of them by promising much more than you actually intend to deliver.
In today’s world, you must build trust with customer satisfaction by offering them help and tailoring solutions that are a better fit for their needs instead of forcing the same product on everyone. It also means customising products and incorporating support and services unique to the needs of each customer.
What would be the point of having a solution if the cost is much more than the value of the result? To have an efficient business solution, it is necessary to optimise all business processes. The optimisation means that each business process gives out the maximum benefit with minimum cost and minimum employees. Kick-starting the process of optimisation requires having detailed data in place.
Transforming your products
It is important to understand that this transformation is not limited to just using the latest technologies and tools. It involves building a business model based on a better understanding of employees, your customer, your organisation, your legacy, and the overall market.
There are many ways to tackle digital transformation, but by covering off these 4 main bases you increase your chances of success. It’s important to understand that there are many elements to digital transformation, and tackling only one or two will hinder you from taking full advantage of a digital strategy.
At GiG, we fully understand digital transformation; what it means, the benefits of it, the mechanics, the struggles and also the myths. We have knowledge and experience about our industry, many of us have worked in different capacities, learned the lessons of the past and understand the key events in our industry that have shaped the market today.
GiG has gone through great lengths to understand both online gaming from a digital and brick and mortar perspective, and built a product and strategy to bridge that gap. We have a passion for understanding our customers and users, and have always made it our mission to place a strong focus on identifying and solving their problems through our products and services. We believe in building meaningful relationships. We see the customers that use our products as partners, and we learn from them as much as they learn from us and we work together to shape their business.