Most blogs in my history are very focused on Industry 4.0’s digital transformation of the manufacturing industry, which in itself is pretty remarkable. By 2025, Industry 4.0 is expected to generate greater than $11 trillion in economic value as connected manufacturing processes, operations and their supply chains become more streamlined, efficient, agile and realize improved productivity, improved uptime and product quality.
The last two years have seen remarkable acceleration of digital transformation in a whole host of segments. Consider that:
- There was a huge shift to on-line e-commerce and the infrastructure that supports it. Consider that Amazon’s US capital spending in 2019 was more than any other company pushing Amazon’s sales per employee to 50% more than Walmarts which predominantly are brick and mortar bound.
- Before 2020 roughly 5% of the work days were spent at home, while by November 2020 that figure climbed to 50%. Platforms that connected, aligned and streamlined workloads enabled and powered this shift.
- Streaming video services like Netflix added 15 million new subscribers
- Print sales in the United States enjoyed robust sales in the first six months of 2020. Hardcover and Paperbacks increased by 2.8% and sold 322.1 million copies. Considering most bookstores were only open for a limited time this year, the vast majority were placed via online ordering.
I too have enjoyed the benefits digital transformation experiences have brought, but unlike on-line shopping or streaming video services, I seek my entertainment usually outdoors – on the water, whether it be frozen or liquid. Wanting to shift the digital transformation story from work experiences to something more personal, I recently observed that the ski industry has undergone a remarkable digital transformation story that is relevant to both the Manufacturing and Retail markets. Though this market segment is relatively small when compared to others in the US (roughly 10 million skiers in the US and a segment employment population of roughly 60,000) it conveys a real example that is going on around us when data is applied to the fabric of a business and data guides the business growth and profits.
Separated by Eight Miles and 70 years
The story is about two ski areas in upper Vermont – three to four hours north on a good day from the population center of Boston. At first glance the two ski areas are pretty similar – both have vertical drops near 2,200 feet, both are graced with +250 inches of snow a year – but there is more to the eye that suggests that these two resorts are separated by more than 8 miles distance and a digital maturity experience gap that maybe similar to 1950’s than 2021.
The first ski area first cranked up its now famous Single Chair on Dec. 11, 1948. This area is a prized skiers possession prohibiting snowboarders with an outsized proportion of expert level trails and very limited artificial snowmaking. The area confidently sports the motto, “Ski it if you can”, and are proud of their cooperative-owner business structure and only ski area in the nation on the National Register of Historic Places. Services are home grown and the skiing experience foundation is built on the basics.
Eight miles down the road and a 20 minute car ride, transforms one from 1950 to 2021. Knowing this area for nearly 20 years, you used to buy lift tickets at a walk up ticket window and fix them to your jacket with a metal loop – the youths would keep adding new tickets to this loop as a badge of honor as the season wore on, seeing how many you could dangle compared to your rival friends. Showing up in jeans, bringing your own lunch, and when too cold and too wet – quitting for the day. You never knew what the ski conditions would be like, and if you lost your group on the hill, you lost them until the end of the day. Much like the resort up the road, but not any longer.
The Digital Experience Benefits
Today the accelerated digital transformation is creating profound positive cutting edge customer and operational experiences that could be a benchmark for both manufacturing operations and the retail business segment. By employing a total digital experience from season ticket pass holder registration, to an on-mountain reservation system, to the food service and restaurant, and a location-based app that allows you to find your skiing party on the mountain, this area skied the equivalent double black diamond headwall run right into the digital age. The data spun off its business is remarkable allowing advanced analytics use cases such as:
|Business Category||Use Case||Benefit|
|Marketing and Sales||Marketing and Sales Optimization –
Target marketing advertising spend by region and visiting persona
|Rationalization of marketing and advertising spend producing the highest ROI|
|New Profit Steams –
Co-marketing with like-minded sports
|New revenue stream through a persona-based database can be monetized through co-marketing efforts|
|Pricing Optimization –
Pricing and offer timing
|Dynamic pricing based on predictive analytics based on weather, calendar and mountain load|
|Customer Experience Optimization –
|Use of gamification to drive participation based on location, use and leaderboards. Side benefit is an on-mountain location finder|
|Facilities Operation||Facilities Cost Optimization –
Predictive optimization of restaurant/facility costs
|Predictive load based utilization and staffing based on mountain load, weather, seasonal calendar|
|Mountain Operations||Mountain Utilization Optimization –
Persona based trail usage
|Optimized operating costs in lift operations, snowmaking and snow grooming personnel costs|
Data Sources, Enabling Technologies and Infrastructure
Data input and acquisition enabling these advanced analytics uses cases appear to originate from the following sources:
|Data Sources||Use Case Benefited||Insight provided to
|Season Pass Holder Database||Mountain Utilization Optimization||
|Marketing and Sales Optimization||
|Website and Social Media sites||Marketing and Sales Optimization||
|RFID embedded in mountain pass||Mountain Utilization Optimization||
|Resort Specific App (with GPS location) located on smartphone||Mountain Utilization Optimization||
|Marketing and Sales Optimization||
|Facilities Cost Optimization||
|QR code app on smartphone||Marketing and Sales Optimization||
|Facilities Cost Optimization||
The Need for a Modern Data Architecture
The digital transformation and the resultant advanced analytics powering the use case examples is not that far removed from the typical Manufacturing or Retail situations encountered an a near daily basis – data flowing into this business from a multitude of sources, a blend of real time data-in-motion (in this case RFID mountain pass, App, and QR data) and static databases (day-of-skiing reservation system, RFID mountain pass system, and season ticket holder database).
Challenges that the business sees for complete deployment are:
- Silos created from incompatible data sources, types and formats that need to be organized, refined and aligned before the data can be used across targeted advanced analytics used cases
- The volume and speed of real-time data originating internally (on the mountain) and externally (apps and social media) to the operations
- Scalability of the customer experience offer. Customer experience solutions that seem to work fine for one operation, might not deliver the speed, customer responsiveness and tailored experience when scaled to multiple locations
Regardless if your business is a ski resort, industrial manufacturer or an international clothing retailer, today’s digital transformation journey leads to proven predictable outcomes that are enabled with a modern scalable data platform that allows businesses to build and define their businesses on data. The key to the solutions are:
- Operating on any platform your business demands – work on-prem, hybrid or cloud
- Ability to ingest, analyze or create insights with any type of data your business generates – structured, semi-structured and unstructured in real-time
- Providing the security and governance to protect intellectual property and customer data
- A scalable open platform built from the best technology of an open source community
This is a fun time, as our lives are being positively affected on a daily basis due to the rapid acceleration of digital transformation. Where will the digital transformation journey take us? I dare to say, but all I can say is that it has brought me a better (customer) experience than what can be delivered from a Zoom meeting or a digital streaming service. Now off to a few more runs before the winter light gets low and the day ends.
As digitalization is touching all aspects of our lives, I routinely write about Manufacturing’s Industry 4.0 and the digitization of the retail marketplace. If you would like to learn more about my perspective, check out my previous blogs.