Digital transformation as a "state of mind"

Digitalization and technological innovations are today some of the most current topics, regardless of the industry in question. Global analysts predict that next year, digitally transformed organizations will make up more than half of the global GDP. While these terms encompass a wide range of activities and areas depending on the specific industry and the company itself, what is common to all those who have "played it smart" and achieved good results is the adoption of a "digital way of thinking."

Whether it's improving business processes, streamlining operations, completely changing a business model, or targeting new markets, the goal of every successful digital transformation is to bring increased value to both end-users or clients and owners or shareholders. Timely and wise digitalization has made a difference for many companies, determining whether they become market leaders or become obsolete. There are many examples in any industry, both successful and unsuccessful.

Digital technologies have had a significant impact on the world, changing the way entire industries operate and allowing companies like Facebook and Amazon to grow exponentially. Companies that have advocated traditional business models for years have found themselves in a position where they now have to compete with new, agile players who operate differently. There is, of course, another side to the coin. As much as digitization poses a threat to the "old guard," it also offers numerous new opportunities.

Meteorology, for example, is a good example of how new sources of revenue can be found. In times when TV advertisements have fewer viewers because new generations of consumers have replaced watching TV with mobile phones, and it is increasingly difficult to attract and retain their attention, some meteorological companies have offered sellers a new service. These are weather forecasting applications that help companies predict how weather conditions affect or will affect consumer behaviour when shopping.

Successful examples can be found in other traditional industries as well, starting with banking, where digital transformation has meant much more than the classic development of e-banking and mobile applications. Similarly, many companies in, for example, the manufacturing industry are undergoing digital transformation for greater efficiency. They use predictive analytics to reduce supply chain and maintenance costs, as well as reduce energy and water consumption, etc. As a B2B industry, their main attraction to clients is the ability to reduce costs in every way, including increasing yields.

For instance, The New York Times, faced with declining print subscriptions and loss of advertising revenue, has made a very successful business with digital subscriptions. At the end of last year, it had over 7.6 million subscribers to digital content, with the goal of nearly doubling that number by 2027. Automakers like Cadillac are experimenting with subscription services; Sephora and other cosmetic companies use mobile apps to enhance their customers' in-store experiences.

Collaboration for Mutual Benefit

Numerous experiences from different industries have shown that success in the new age requires changing one's perspective on the world, redesigning a business model, re-evaluating the value chain, and connecting with customers in a new way, which requires changes in an organization. Can the experiences and best practices of large companies worldwide be useful to small businesses in our market, such as jewellers, for example?

At first glance, their capacities and conditions of doing business are so different that they are incomparable. However, if we analyze in more detail the business models that have provided success to large players, we will see that these experiences can be applied to domestic companies, albeit on a smaller scale. Can a jewellery store in Serbia, for example, allocate funds for a digital platform and, for instance, transform its business model, opening up a completely new source of revenue? While jewellery is still seen as a "lasting good" here, where people invest and keep it for years, the world has been seeing the practice of renting certain pieces for special occasions for years. Developing a platform, insuring jewellery, organizing a courier service for the delivery and return of rented jewellery, integrating and using free online tools that can help optimize travel routes. Could partnerships with similar industries, such as fashion, optimize costs?

Tire dealers as the "voice of reason."

Technology has also changed the way consumers search for information and buy products or services. This change has enabled companies to use technology to collect data on how consumers make purchasing decisions and, therefore, to adapt their sales strategies more effectively to attract new customers.

All of this data can be collected directly or indirectly and further used to create new or improve existing services. On the other hand, collected data from a large number of customers after depersonalization can be further used for market assessments in other industries, targeted advertising, and other ways that would enable a carpet cleaning service to find new revenue streams by changing its business model.

Given that consumers are increasingly relying on online reviews and recommendations from friends, this corporate platform can, over time, grow into a place where clients seek advice when making their next purchase. This opens up opportunities for new partnerships with sellers or the creation of new services. A good example of such a business transformation is tire repair shops, which have begun to serve as the "voice of reason" when choosing new tires. So, in addition to their basic services, they have also started selling tires alongside other products and services in some cases.

Managing such a change is not an easy task for a small business, especially when trying to strengthen its core business and secure its place in the market in the future at the same time. It often resembles a situation where two different companies are run in parallel, which can reduce revenues and profits during the transition period until investments start to pay off and shake the determination of even the most entrepreneurial entrepreneurs.

Does a small jeweller have enough knowledge and strength for such a change in the business model? Can "the guy next door" build a suitable software solution for him in his "garage" or post an ad on Instagram, for example? Or does he need to partner with a startup from the technology park in a nearby town? These are questions that are not easy to answer, and there is no magic recipe that would guarantee success in innovating a business model for every small company in Serbia. But one thing is certain - if you don't do it, your competition will, and it's not hard to predict whose story will have a happy ending.