Group 50: Summary of Digital Strategy Project

19

October

2017

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In our digital strategy project, we provide a complex analysis of Abercrombie & Fitch brand as a part of A&F company, the apparel and footwear industry it belongs to and we develop a new digital strategy that is aimed to transform this company within next 5 years.

The main reason for choosing A&F for our analysis is the recent shift in company’s financial performance. The cause behind its struggle is the customer – a millennial who values transparency, localness, originality and emotions more than the status of the brand or simple prestige. A&F has failed to retarget itself to this type of customer. Bad reputation, lack of digital innovation and understanding of the consumer led this company to a downward spiral. New digital strategy is certainly a way back to positive financial performance and future success.

Providing the analysis of the respective industry, we discuss the trends and apply Porter’s Five Forces framework to assess the overall intensity of competitiveness in the industry.  Using PESTEL framework, the influence of external factors on the clothing industry and its future is evaluated. A discussion about digitization level concludes the industry analysis.

Subsequently, we define the role of A&F in the industry and provide the recent state of affair. As mentioned previously, A&F has shown disappointing financial results. It is known for its oversexualized marketing campaigns and large logos on clothes. The company had been popular among teen customers but recently faces a loss of customers because it fails to match their values and lifestyle. As a part of company analysis, we describe its business model and also provide stakeholder analysis. Looking at current digital strategy of A&F, we have found that it is based largely based on omnichannel approach. A&F provides a basic mobile application, e-shop and is active on social media. In depth analysis of current state of affairs can be found in our report.

The main and most important part of our report develops a new digital strategy for A&F. We model this strategy around four dimensions – product, mobile application, in-store experience and digital marketing. In product dimension, we focus on digitally innovating the clothes offered by A&F with focus on transparency of supply chain. Dimension of mobile application takes the existing A&F app as a baseline and introduces new feature called FittingSpace. This feature deploys the technology of augmented reality in order to provide customer with added value on his or her customer journey. We realize that this journey is located mainly outside the A&F stores. The part of the new strategy concentrated on in-store experience suggests the innovation of A&F store and deployment of smart mirrors. Last but not least, digital marketing as an integral part of the new digital strategy focuses largely on new principles for online presence and the use of digital channels to collect and analyze data.

In order to complete the proposal of the new digital strategy, we also provide risk analysis, cost/benefit analysis and elaborate on compatibility of the strategy with the company culture, technical and financial feasibility and its novelty. Set of digital initiatives follows the definition of the strategy and it is again based on our four strategic dimensions and their respective content. We transform the proposed strategy into a set of executable initiatives and provide a timeline for their realization. As a part of these digital initiatives, success criteria are defined in order to set clear and measurable goals for the initiatives.

Our report concludes with a set of formal high-level recommendations for management. These are based on the proposed digital strategy and adherence to these recommendations ensures the successful transformation of A&F within next five years.

 

Reference:

Digital Strategy Project for Information Strategy course (2017), Group 50

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My job does not exist yet

15

October

2017

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Automation and robots are coming for your job. The World Economic Forum predicts that 5 million jobs will be lost due to technology advances by 2020. McKinsey and Company found out that 30% of tasks in 60% of jobs could be computerized. It is not the first time you have heard this. Advances in technology and their impact on job market is a very popular and up to date topic. Researchers discuss the timeline for jobs disappearing and define which jobs will be gone and why.

In order to quickly summarize on their debate, predictability, routine and simplicity of tasks are the main factors for identifying which jobs will be gone soon. Taxi and truck drivers will be replaced by self-driving cars. Tax consultants that process large amount of data in accordance with law can be replaced by sophisticated systems that will do their job automatically. You can find fewer cashiers in an average grocery store than 10 years ago because barcode scanners are so convenient. There are many examples of different occupancies that should fear automation and digital advances.

What are the key attributes of jobs that will be hard to replace by robots or automated systems? Genuine creativity, social interaction, emotions and unpredictability are some of them. Jobs that require many different skills from one person and their deployment is highly unpredictable seem to be hard to automate. Think of a generalist, a manager for instance, that has to react to many different occurrences and find a unique solution.

It is a given that many jobs will be either highly automated or completely replaced by advanced technologies and systems. On the other hand, it is highly unlikely that we will be able to pass all of our tasks on robots or automated systems and do nothing instead. First, as far as we can see, there will still be human intervention needed to supervise and control the machines. Second, technology is by far not at such an advanced stage that it could do anything. To use a simple example from agriculture, such an easy and repetitive task as picking apples for consumer direct consumption has not been automated yet. The reason for this is not only the cost of such a technology, but also technical feasibility. A robot, that could see the right color, right size and pick the apple without damaging it, at the same cost and pace as humans is still science fiction.

We all know this and I am not telling you something that can surprise you. Nevertheless, there are some questions to ask ourselves. If this is all true, how should I react? What should I study? How can I be sure that my job will not become obsolete? The truth is, you cannot. The world and job market are changing very fast. The main ability of successful people in the future will be adaptability. You need to be able to react, learn new things and continuously disrupt the safe patterns you follow. Nobody can predict the future. We can only analyze, guess, work with probabilities. Being able to adapt does not mean that you will refuse to delve deep into different fields of expertise and just wait. It means to constantly challenge what you do and be ready to accept the changes that are about to come.

 

Sources:

Kottasova, I., 2016. Technology could kill 5 million jobs by 2020. [Online]
Available at: http://money.cnn.com/2016/01/18/news/economy/job-losses-technology-five-million/index.html
[Accessed 15 October 2017].

Mahdawi, A., 2017. What jobs will still be around in 20 years? Read this to prepare your future. [Online]
Available at: https://www.theguardian.com/us-news/2017/jun/26/jobs-future-automation-robots-skills-creative-health
[Accessed 15 October 2017].

McKinsey Global Institute, 2017. Harnessing automation for a future that works. [Online]
Available at: https://www.mckinsey.com/global-themes/digital-disruption/harnessing-automation-for-a-future-that-works
[Accessed 15 October 2017].

 

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Digital transformation of fruit growing

23

September

2017

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Agriculture is one of those less popular industries that do not make it to the headlines of news very often. Growing food is labor-intensive, dependent on weather and nature, substantially complex and encompasses too many unpredictable variables. Despite these obstacles, we need to feed the population of the earth and thus agriculture remains important. In recent years, development of agriculture has been facilitated by digitalization and Internet of Things. Considering the broad scope of agriculture industry, let us look specifically into fruit growing as a segment of agriculture and its digital transformation.
The apple, pear or any other fruit you ate yesterday started its journey to your hands in a fruit plantation. Although fruit growers have years of experience with taking care of that plantation, digital innovation increased the efficiency of their job tremendously. Smart irrigation systems equipped with sensors screening weather conditions optimize the watering of trees based on both local on-site and online data. Using the same system and knowledge of fruit plantation life-cycle, even all the necessary nutrients are delivered right to the stem of every tree by water.
The harvest represents the next challenge for fruit growers. How can they track every single apple, ensure the perfect transparency of information, if there are thousands of tons to watch over? An information system comes in handy, based on a single chip on every box. Storing all the information for a box, every single apple is carrying an information about who, where and when picked it, what sort it is, which chemical treatments were used, what needs to be done next and much more.
Another important innovation based on digital technology and smart sensors took place in storage systems. ULO-cells equipped with technology screening the environment provide optimal space for storing the fruit until it can be sent on its way to customer. Without this innovation, there would be a time frame of couple of days, weeks at most, between picking the apple from a tree and eating it, before it gets spoiled. Deployment of this technology, impossible without the internet, stretched that window of time to months. Just another application of IoT and digitalization that changed the fruit growing drastically.
Internet has even changed the way fruit growers sell their products. Think of Porter’s Five Forces for a moment. For many years, fruit growers were able to sell only a small amount of their overall production directly to customer. The usual and the most profitable way was always the wholesale market, trading vast amounts of fruit with merchants around the globe. The internet changed the communication with customers and cut the middleman in many cases. Fruit growers are now able to find their customers directly, benefiting both buyer and seller parties. Furthermore, the combination of Internet and increasing demand for local products suggests a positive future for local fruit growing.
What kind of future can we predict for agriculture, especially fruit growing? Agricultural drones, the hot topic in this industry, will certainly be the next big thing, as Anderson (2014) presents in his recent article. In my opinion, there is one even more important issue to solve in the future – the element of labor-intensity. There is no doubt that we will need more food in the future. Considering the development of job markets in western countries, for how long do you think the fruit growers will still be able to find workers to pick the fruit? The future lies in automation, robotics, faster and more precise decision making based on data processing and digitalization of all processes that can be digitalized. Yes, even in such an “old-school” subindustry as fruit growing.
Agriculture is not cool, but it is more than necessary. Seeing amazing technologies such as self-driving cars, AI and blockchain, we might forget that Internet of Things and Digitalization have a tremendous impact even on the simplest things in our lives, such as the single apple you ate yesterday.

References:
Based on cooperation with a fruit growing company in Central Europe.
Anderson, C. (2014). MIT Technology Review. Accessed online on September 23, 2017: https://www.technologyreview.com/s/526491/agricultural-drones/

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